Why the need for Pension updation & Is there any provision for Updation in our scheme

The GIC Pension scheme 1995 was drafted with basic Principles of CCS Pension rules 1995 as amended up to 4^th central Pay commission. Consequently the formula of fixation of Pension is adopted from the CCS pension rule as amended on the implementation of 4^th CPC in 1995.

The Core values taken from the CCS Pension rules as amended up to 1995 are as follows

1) 50 % Pension for 33 years & Pro rata for lesser years.

2)  Minimum Pension & Minimum Family Pension as mentioned in 4^th CPC.

3) The rate of Commutation of Pension (30%)

The above three core values as amended in CCS Pension Rule 1972 up to 7^th CPC are as follows.

1) De linking of 33 years of service for full pension by  introduction of 50% Pension for 20 years( VRS) and above, 50 % Pension for 10 years and above in case of Superannuation Pension. The Pro rate Calculation is done away with.

2)  Minimum Basic Pension & minimum basic family Pension as per CCS Pension rule as on date is Rs 9000 & The rate Of family pension is 30% flat on last drawn basic pay where as in GIC Pension Scheme the minimum Pension varies from Rs 375 to 3010 only between wage revision carried out so far.

3) The rate of Commutation is 45% against our 33%  

Why the need for Pension updation & Is there any provision for Updation in our scheme 

The Non Updating of above three core values in GIC pension rules 1995 has made it redundant & static Scheme compared to our Mother Scheme CCS Pension rules 1995.

There is no mention of revision of pension in CCS Pension rules 1972 but still Central Govt Pension is getting updated along with every Wage revision. Consequently the CCS Pension rules 1972 get amended with every Pension revision due to implementation W.E.F. 5^th CPC to 7^th CPC.

Employees with a  a huge amount to their credit  as employers contribution to their Provident fund have surrendered & joined the GIC Pension Scheme 1995 relying on the mother CCS Pension Rules 1972  which is getting amended time to time as per  Pension revision  as envisaged   in Para 55 of GIC Pension rule Scheme1995.

The rationale behind every Pay/ pension revision is the erosion of money value due to unforeseen contingencies  like inflation & price rise which cannot be compensated by the Dearness allowance which is granted from time to time the purpose.

The family Pensioners are the most affected lot due to this non updating of changes in core value of CCS Pension rules in GIC Pension rule1995.

In order to allow 30% of last drawn pay as family pension Pro rata calculation is to be ceased forth with otherwise the spouse of Late employees retired on superannuation having less than 20 will draw family Pension more than her late retired employee.

In short employee may be preferred to die to allow her spouse to draw more pension than he is drawing presently.

This Problem can be explained as given below.

Last drawn Basic pay of employee= Rs 44000

Basic Pension for 33 years  = 22000

Pro rata Pension for employee retiring on

Superannuation having 18 years = 22000x18/33  

                                                          = 12000 (A)

Family Pension 30% flat on Basic Pay = 44000

         Family Pension as per this         = 13200 ( B)

Family Pension B is more than the retired employee Pension A.

The RBI Which is also under Department of Financial Services has removed Pro rata Pension Prior to sanction of 30% flat family Pension on last drawn basic Pay.