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REX88
28-01-2009, 12:11 AM
Dear Forum Members, kindly bear with me for being naive and also kindly bear with me if I have posted my query in a wrong spot.
I am a very junior govt. servant for whom the corpus for the pension is believed to be provided by the govt. I have to contribute 6% of my earnings every year towards GPF and the same is reimbursed to me at the end of my career, with interest. my employer, ie., Govt., contributes a similar/different amount which is then transferred to a pension operator. after my/spouse lifetime the pension stops coming. what happens to the corpus?
Alternatively, if I happen to be a private sector employee, my contribution towards provident fund will be matched by my employers and at the time of retirement I would get the total of these amounts which i can invest and get pension and after my/spouse lifetime the corpus is left for our progeny, ie., sons/daughters, etc.,.
It is not happening in the case of a Govt. servant.
I would like to know what happens to the corpus of all so far deceased govt. servants?
-REX88

vnatarajan
01-04-2009, 04:13 PM
Dear Mr Rex88

I thought some expert will answer- but I find till now none has answered!

The old Scheme of GPF is something like an annuity- and you get back ONLY YOUR balance of contribution with interest etc at the time of retirement (balance because employees do resort to periodic "permanent" withdrawals!)- and the Govt. component is supposed to be with the Govt. as a "corpus" - which is used by the Govt. for various developmental expenditures etc.(of course all on paper- printing bonds/ notes etc!). Pension is paid from this evergrowing "corpus" and its interest!. This corpus may well exceed a few THOUSANDS/LACKS OF CRORES of Rupees and the Govt. can NEVER EVER think of getting rid of the old pensioners unless the same amount of corpus is disbursed to the pensioners as one-time settlement! Therefore till the last old-scheme pensioner retires, Govt. has to continue the GPF.

In essence it is Pensioners' own money- counterpart component of the GPF from Govt./interest on it etc thru investments by Govt.-which comes back as pension. Since it is like a revolving corpus, individual accounting in the corpus may not exist (my understanding).

Longer the Pensioner lives- more he gets the return!

Another important thing is every EMPLOYEE has made equitous contribution ie pro-rata as per his scale of pay/ level/ grade and therfore after retirement all "PENSIONERS" must be treated as a homogenous class for the purpose of EQUITOUS treatment or BENEFIT. However, the UNPRINCIPLED/ ETHICless decision makers do act in a very selfish manner - inspite of the Courts/ Constitution insisting/ guranteeing parity in pensions among equals!.

That is why the principle/ philosophy of "Equal Pension for Equal Post (level/grade/ and even based onlast pay drawn) and Equal Length of Service" is insisted by those who are JUST and PRINCIPLED.

Frustrated with this juggerknot and not knowing how to handle the situation, Govt. thought of getting rid of the GPF corpus by "PAPER LOSS TECHNIQUE" - ie investing on paper in shares/ stocks and make it disappear!. Unfortunately, this was nipped in the bud by the Left parties- But for them by now all pensioners might have been chanting "GOVINDA" "GOVINDA" bhajan!

In case of CPF, the Govt. component is immediately added to Employees' contribution and one may get back the entire lot back at the time of retirement with interest (less what has been permanently withdrawn!). So no pension. I think nowadays, a Regulatory Authority takes care of the PF money. God only knows when the disaster will strike!

(I have made some EXAGGERATIONS_ so dont take them seriously- but basically everything is true!)

Regards

vnatarajan

Kanaujiaml
01-04-2009, 08:02 PM
My dear REX88.Ref. Post 1 and 2 above. Like Mr. VN , I am also not an expert on the subejct but I would try to answer your question from my own knowledge and experience. You have very rightly already given the details in respect of pensionable and nonpensionable retirees. Your question pertains to the situation when the Govt. servent is no more alive. When pensionable Govt. servent dies while in service, a family pension is available to the dependants, at full 100 % rate, upto a period of 7 years, from the date of superannuatiion, if the Govt. servent had lived. After the 7 years period, normal family pension rates would be applied. The pension payment order would contain all the details in this respect. In addition, his or her PF contribution and gratuaity , leave encashment, insurance etc are also payable. When a nonpensionable Govt. servent dies while in service, his or her pF contribution is paid as due at the time of event, as well as Govt.'s contribution, accumulated during the service period.Gratuity, leave encashment, and full amount of insurance due are also paid. Obiviously, no pension is payable. These are the general principles and there are many forms of pension(such as invalid pension) with varied privillages which are admissible under the special circumstances. I hope I have ansered your queation to your satisfaction.

REX88
01-04-2009, 11:10 PM
Dear Senior Friends, Thanks for your response. I guess it may be like this. The Employer, viz., the Govt., contributes a regular amount towards my account and at the time of my retirement the so accumulated amount is vested with some Life Insurance Co., towards an annuity which will continue as long as myself or my spouse survives. after that eventuality the annuity ends and the corpus is forfeited by the Insurance co.
IMHO, till date only LIC [recently, private insurers] has been authorized to hold such annuities. My next topic of interest is what happened to this corpus retained by LIC? is it given to the GOI, who is the 100% owner of LIC? If so, where is it accounted by GOI? It has never appeared in any Budget in my memory.
is it not a mirage that by showing some sort psychological security of pension GOI is hoodwinking Govt. employees by simply rotating the above corpus from its account to LIC and then to its own kitty? Is it not peanuts that is passed as pension. Is it not a joke that the same Govt. which entrusts its entire finance and resources at the disposal of its employees treats them as incapable of managing their own retirement benefits. Will it not be better if the compensation can be factored more scientifically to share the above in a better manner, similar to that of the CPF. Hope someone knows the answers. - reg,REX88
[disclosure - I am a fourth generation govt. servant. My GGFather, G.Father, Father & Myself are all govt. servants. My Gfather lived till 94 yrs, my father is 66 & I am 36]

Kanaujiaml
02-04-2009, 08:29 AM
My dear REX88. In your above post, it appears that you are talking about the new pension scheme, which is still under consideration of the Govt., as far as I know. I have not seen the draft new pension scheme and as far as I know, it has not appeared even on internet so far.

jitendraacr
02-04-2009, 08:49 PM
Dear friends
With a little knowledge of mine on the subject, I am to say that New Pension Scheme was introduced to reduce govt burden i.e it will be shared by the employee itself. It has two Tier system. In tier I, Employee has to contribute 10% of Basic mandatorily with equal contibution from govt. Contribution will remain 10% and is not flexible. The total amount so collected during service will be used for granting pension either on superannuation or on death. (40% can be commute, since this option is available in this scheme). There is no ambiguity in it. As regards, Fund Manager for this corpus Govt has decided it and it will go to SBI,LIC and UTI for the purpose. There should not be any confusion on it. Money is safe. It is not like existing PF scheme. One more thing to add though not relevant that LIC is not under Govt. insted Govt has no control over it. (governed under IRDA guidelines) It is an independent Corporation.
Now Tier-II. Its fate is yet to be decided since it has not been formulated yet. However it will act as existing PF scheme where employee could contribute as per his wish. In this scheme withdrawal (like PF) are also allowed.
As regards early death cases under New Pension Scheme, there will be no pension like in CCS(Pension) Rules. Basic rules of CCS(Pension) rules is the basis of NPS and therefore will remain same.
with regards
Jitendra

Kanaujiaml
03-04-2009, 07:22 AM
My dear Jitendraacr. Ref. post 6. You have given good lot of information and I appreciate it. I assume you must be having some official circulars or letters on the subject. I would like to read them for knowledge sake. Can you suggest where I can find them ?

vnatarajan
03-04-2009, 08:27 AM
Dear friends

In addition to the above- I think you all must read (if you have not done so far)- one of the reports titled " A Study on the terminal benefits to the Central Govt. Employees" by the Consultant- Dr K Gayatri, Institute for Economic & Social Change, who prepared one of the appended Reports to the main SCPC Report- on the subject of Govt.Employees' Terminal Benefits./ including Pension/ Pensioners etc. where many of the above aspects are discussed and some statistics are given with tables/ charts. It also throws light on the Pension History- its growth in Govt. sector- GOVT's ONUS/COMMITMENT/DUTY TO HONOUR PENSION PAYMENTS on principles of parity/equality- Court judgments (read some other than Nakara also) etc..

There are very good illustriated analyses on the Pension expenditure of the Govt. vis-a-vis the GDP- and the projections to the future- till the last breath of the GPF subscriber!.

CPF is also discussed to some extent.

You can access thru the National Portal of India- Government- 6CPC- Report- appended reports.

vnatarajan

Kanaujiaml
04-04-2009, 12:08 PM
My dear VN. Ref. post 8. I have seen the report you are talking about. This is part of early studies undertaken for VI CPC.

jitendraacr
04-04-2009, 09:08 PM
Dear Sir
What I have posted here is based on the circulars issued on NPS. From the first circular reg introduction of NPS, then clarification etc. Circulars reg Fund Manager etc. have been issued recently. These are available in my office. I think NPS is clear except Tier-II and some queries on Tier-I as in case of resignation etc.
with regards
Jitendra

Kanaujiaml
05-04-2009, 10:04 AM
Dear Sir
What I have posted here is based on the circulars issued on NPS. From the first circular reg introduction of NPS, then clarification etc. Circulars reg Fund Manager etc. have been issued recently. These are available in my office. I think NPS is clear except Tier-II and some queries on Tier-I as in case of resignation etc.
with regards
Jitendra

Thanks very much.