Monday 4 October 2021

PENSION and GRATUITY


 Chapter 10. PENSION and GRATUITY


All Railway servants who were in service on 15.11.1957 who elect to come on these

rules; persons entering Railway service on or after 16.11.1957 except those whose terms of

appointment provide to the contrary and all CPF beneficiaries in Service in 1.1.1986 should be deemed to have come to pension scheme unless they specifically opt out to continue under the CPF Scheme.

Classification of Pension :

(a) Superannuation Pension -

Superannuation pension is granted to a Railway servant entitled or compelled by rules to retirement i.e. at the age of 60 years from 13.5.98. 

[R.B's No.E(P&A)I-98/RT-6 of 14.5.98; ]

(b) Retiring Pension -

This pension is granted to a Railway servant who is found unfit for further any service on

account of physical or mental infirmity. If, however, the unfitness is directly due to irregular

or intemperate habits, no pension shall be granted.

 (C) Compensation Pension

This pension is granted to an employee discharged from service owing to abolition of a

permanent post unless he is appointed to an other wing to abolition of a permanent post

unless he is appointed to an other post the conditions of which are deemed to be atleast equal to that of his old post.  

Pension admissibility comprises of elements, viz.

(a) The service gratuity, &

(b) Pension.

The service gratuity for qualifying service less than ten years shall be calculated at uniform rate of half month's emoluments for every completed six monthly period of service 

instead of at the rates specified in the Table below the relevant provisions of MRPR, 1950.



Pension shall be calculated at 50% of average emoluments in all case (Whether

superannuation, Retiring, Invalid of Compensation pension), subject to a minimum of Rs. 9000/- (01.01.2016) and maximum upto 50% of the highest pay in the Railways. The above percentage is for 33 years qualifying 

service. Where the qualifying service is less than 33 years the same may be granted

proportionally, i.e. pension worked out divided by 33 and multiplied by the qualifying service rendered by the employee.


Commutation of Pension :

A Railway servant shall be entitled to commute for a lumpsum payment upto 40% of his

pension. An employee who on superannuation/retiring compensation or on voluntary

retirement(i.e. before next birth date) shall not be subjected to do medical examination for the purpose of payment of commuted value.

* A Railway servant retiring from Railway service on absorption in or under a corporation

or company or body, the period of one year for the purpose of commutation of a portion of

pension without medical examination, shall be reckoned from the date of issue of Government orders and not from the date of actual retirement. In case, where departmental or judicial proceedings have been instituted against a railway servant, the period of one year for commutation of pension shall reckon from the date orders issued on the conclusion of the proceedings provided that such employee on the conclusion of proceedings is granted pension in whole or part thereof. 

* In case the Railway servant is on deputation to Public Sector Undertaking and has permanently been absorbed there he will be granted Retiring Pension. Such employees are not entitled for commutation of full pension. 

[R.B's No.F(E)III 95/PN I/19 of 10.7.95]

* Pensioners who have commuted full pension in the past are also entitled the benefit so far it related to restoration of 1/3rd of the commuted pension. The procedure to be followed in 

such case is detailed in Boards letter No.F(E)III 96/PNI/9 of 25.10.96, RBE 103/96 and dated

18.8.98; RBE 185/98.

Those who on absorption in or under a Corporation or Company or Body elect the alternative of receiving the DCRG and lump sum in lieu of pension, will be subject to medical examination even though they apply within one year of date or retirement/ absorption.


Family Pension :

In case of Railway servants who entered in service on or after 1.1.64 or having entered in

service prior to 1.1.64 has opted for or is deemed to have opted for Family Pension Scheme, 1964, the family pension is sanctioned to the widow/widower and if there is no 

widow/widower, is payable to minor children of Railway servant. It can be granted only if the

Railway servant.

(a) dies while in service on or after 1.1.64,

(b) retired on or after 1.1.64 and at the time of death he was in receipt of ordinary pension, and 

(c) families of Railway servants governed by pension scheme who retired or died before

1.1.64 or otherwise not covered by the family pension scheme. In such cases payment of

pension shall be effective from 22.9.1977


Family Pension shall be calculated at a uniform rate of 30% of the basic pay in all cases.

* In case of Railway employee who dies after having put in not less than seven years'

continuous service, the amount of family pension will be at the rate of 50% of pay last drawn

or employees ordinary pension subject to a maximum of ----

(a) one and half times the pension admissible as per the limit laid down above in the case of

families entitled to compensation under the Workmen's Compensation Act, and

(b) twice the pension admissible as per limit laid down above in case of families not entitled

to the Workmen's Compensation Act.

* The family pension will be admissible only one person at a time to the following family

members :

(a) Wife in case of male Railway servant,

(b) husband in case of female Railway servant,

(c) minor sons,

(d) unmarried, widowed/divorce daughters, and

(e) Parents.

If wife/husband is alive, the family pension shall be granted in favor of wife/husband, as

the case may be and the children shall not be eligible. The eligible male/female children

(including male and female children suffering from disorder or disability of mind) of the

deceased Railway employee or pensioner will be entitled to the family pension in order of their birth irrespective of the sex of the child and the younger of them will not be eligible for

family pension unless the elder above him or her becomes ineligible for the grant of family pension. The children irrespective of sex will be eligible for family pension up to the age of 

25 years, excepting those suffering from disorder of disability of mind who would be eligible for life time.

Family pension payable to a son be stopped when he attains the age of 25 years and in the case of a daughter when she attains the age of 25 years or when she gets married whichever is earlier. 

 [R.B's No. F(E)III/85/PNI/19 of 14.5.93]

* For the purpose of Family Pension, the definition shall also include, the parents who were

wholly dependent on the Railway servant when he/she was alive provided the deceased

employee had left behind neither a widow nor a child. In case, where family pension is granted to widowed/divorced daughters, it may be stopped when she attains the age of 25 years. 

Parents shall be eligible for family pension with effect from 1.1.98. Widow/widower, son, daughter, or widowed /divorced daughter will have prior claim to family pension Wherever 

family pension admissible to parents, the mother will receive the pension first and after her death father will receive. 

[R.B's No.F(E)III/98/PNI/4 of 9.9.99]


Family Pension where more than one claimant :

It is payable as under -

(i) Where the deceased Railway servant or pension is survived by more than one

widow, the pension will be paid to them in equal shares. On the death of a widow here share of the pension will become payable to her eligible minor child. 

Provided that if the widow is not survived by any child, her share of the family pension shall not lapse but shall be payable to the other widows in equal shares, 

or if there is only one such other widow, full pension shall be payable to her.

(ii) Where the deceased Railway servant is survived by a widow but has left behind

eligible child or children from other wife who is not alive, the eligible child or children shall be entitled to the share of  

family pension which the mother would have received if she had been alive at the time of death of Railway servant or pensioner.  

Provided that on the share of family pension payable to such a child or children or to a widows ceasing to be payable, such share or shares shall not lapse but shall be payable to the other widow or widow or the other child or children otherwise eligible, in equal shares, or if there is only one widow or child, in full, to such widow or child. 

 [R.B's No.F(E)iii-89/PN_I/27 of 21.7.1992]

(iii) Where the deceased Railway servant or pensioner is survived by a widow but has left behind child or children from a divorced wife or wives such child or children if they satisfy other conditions of eligibility for the payment of family pension, shall be entitled to the share of family pension which the mother would have received at the time of death of the Railway servant or pensioner had she not been divorced.(w.e.f. 

7.10.89).

* Provided that on the share or shares of family pension payable to such a child or children or to a widow or widows easing to be payable, such share or shares shall not lapse but shall be payable to the other widow or widows and or to other child or children otherwise eligible, in equal shares, or if there is only one widow or child, in full, to such widow or child. 

(iv) Except as provided in clause (I), (ii) & (iii) of sub-para, pension awarded under the scheme will not be payable, to more than one member of family at the same time. It will be payable first to widow widower and thereafter to minor children. 

 [R.B's No.F(E)III/89/PN-I/27 of 18.9.1992]

The family pension entitlements of the absorbed Railway employees I the Public Sector Undertaking Autonomous Bodies, shall be regulated as under :- 

(i) The absorbed employees shall have an option to be governed either by the family pension scheme for Railways employees or by that of the P.S.Us./Autonomous Bodies but not for both. However, the benefit for family pension scheme for Railway employees will be 

available only to such of the absorbed employees who are permanent and have qualifying service of not less than ten years, and 

(ii) The liability of the Railways in this regard will be frozen as on the date of permanent

absorption of the individual employee; that is to say, the amount of family pension payable

will be calculated with reference to the pay drawn and the rules in force on the date of

permanent absorption.


GRATUITY PAYMENTS

There are types of gratuity such as Retirement Gratuity and Death Gratuity.

Retirement Gratuity : The Rly. Servant who had completed minimum 5 years of qualifying

service, the retirement gratuity should be paid equal to 1/4th of its emolument for every

completed Six-month period.

(e.g.) Rly. Servant who has completed 5 years of service .

1) Emoluments means = basic pay + DA (20% as on the 16.9.93) for staff.

2) Emoluments for running staff = basic Pay + 55% Running allowance + DA.

 Rly. Servant completed 5 years of service

 Emoluments (Basic Pay+DA) x 5 x 2

Retirement Gratuity = -------------------------------------

 4

 Emoluments

 = ------------------- x Every six monthly period completed

 4

The retirement gratuity will be of a maximum of 16 ½ times of the emolument. The

maximum ceiling limit of Retirement gratuity will not exceed 3.5 lakhs .

Death Gratuity:- All the Rly. Servant permanent or temporary who were expired while in

service, the Death gratuity is payable in the following rates.

1)Less than one year service = 2 times of emoluments.

2) Upto 5 years = 6 times of emoluments.

3) Upto 20 years = 12 times of emoluments.

4) More than 20 years = Half emoluments for every 6

 monthly period of qualifying

 service and to a max. of 16 ½

 times of emoluments.

Death / Retirement Gratuity should be paid all members of the family eligible in equal shares. 

a) Wife or wives in the case of male servant.

b) Husband in case of Female servant.

c) Sons

d) Unmarried / widow daughters. Including Step and

 Adopted Children. Children of pre-deceased son.

e) Father,

f) Mother,

g) Brother below the age of 18 years and unmarried or widow sisters (including stepbrother and sister ).

h) Married daughter.

i) Children.


VOLUNTARY RETIREMENT.

A Rly. Servant is permissible to take voluntary Retirement after a minimum qualifying service of 20 years. 

In the case of Railway Servant will be given weightage of Max. 5 years.

Rly. Servant, who seeks V/Retirement, he should give an application in writing before three-month .The weaightage given to Rly. Servant is not for calculation of pension.

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