Govt to unveil Rs
5,000-Crore Pension plan, 5 mn Central Employees to benefit
The
Union cabinet is set to approve next week a new Rs 5,000-crore pension formula
that is expected to benefit more than five million central government
employees.
Official
sources said the new formula will calculate pension based on the latest drawn
salary for a particular post.
“If
a person retired as a director under the sixth pay commission, ten years later
his pension would be fixed (based on) the salary of a director in the seventh
pay commission,” explained a senior government official.
“The
new pension scheme will be put up to cabinet for approval next week.”
The
new method was fixed by an empowered committee of secretaries (Ecos) headed by
secretary (pensions).
The
seventh pay commission recommended that pension could be calculated by two
methods: One, pension would be 50% of the last salary and multiplied by 2.57.
The second was an incremental method where pension was fixed at the last salary
drawn with adjustments of increments drawn in that particular pay band.
The
incremental method was found to have lacunae as 20% of records were found to be
missing in various government departments, and officials felt this could lead
to litigation in future.
“To
avoid legal hurdles, the Ecos came up with the pay fixation method,” explained
the senior official