Sunday, 16 November 2014

Estimated 7th CPC Pay Scale with a Touch of Fiction

Estimated 7th CPC Pay Scale with a Touch of Fiction

Everybody has the justify to let their imagination run wild before an official announcement is made..! Its impact differs based on the number of people who eagerly await the announcement.

The 7th Central Pay Commission, constituted by the Central Government, is busy formulating its recommendations for the new pay scale. Constant stream of information has confirmed that the 7th Pay Commission, chaired by Justice Ashok Kumar Mathur, is working at an astonishing pace. After receiving memorandums from all the leading employee federations, the Commission is now touring the entire country in order to gather opinions. The tour began in June and continues till date. The Commission is involved in visiting pre-determined cities and talking to the various Central Government employee associations and individuals in order to hear their opinion.

The Centre has given the Commission 18 months time to present its recommendations. The Commission was constituted on February 4, 2014, the Terms and Reference for the committee given on February 28. This means that the 18-month duration ends in August 2015.

Since nearly half the duration has ended, we can now expect some rapid action from the Commission in preparing the recommendations. Meanwhile, in order to cater to the expectations of employees who are curious to know what the Commission has in store for them, many websites and blogs are competing with each other to give their own possible list of recommendations of revised pay scale and allowances. Reactions from Central Government employees like shock, surprise, jubilation and disappointment are unavoidable.

Yet, not all estimates go completely wrong.

Source: www.7thpaycommissionnews.in

NPS is far beneficial than Government Pension

NPS is far beneficial than Government Pension
GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’

GConnect has published an article titled, ‘NPS is far beneficial than Government Pension’ – Comparison of New Pension Scheme (National Pension Scheme) and Central Government Pension

A very popular website among Central Government employees, GConnect, which began functioning more than 8 years ago, continues to be a strong line of communication between the Central Government and its employees.

The article that was published yesterday seeks to answer critics who claim that the new pension scheme is outright bad. GConnect has made it very clear that the opinions expressed in the article belong to its writer, Mr. Dorai, Deputy Director, ESIC Model Hospital and that the website doesn’t necessarily subscribe to them.

The ‘study report,’ that compares the salient features of the old(Central Government Pension Scheme) and new pension schemes, is bound to create controversies.

While various Central Govt employees associations and federations are putting pressure on the Government to withdraw the new pension scheme and enforce the previous one, we believe that this article is going to make a huge impact.

The writer begins the article by stating that those who are opposing the new pension scheme, with more benefits than the old pension scheme, are doing so due to their ignorance. The article also explains how the new pension scheme could create huge wealth.

The report gives as an example, the case of an employee who joins the Central Government employment as a Upper Division Clerk(UDC) in 2014 and retires after 35 years service, in 2049. The report gives a comparative study of how the pension fund grow each of these 35 years. The study also assumes a regular dearness allowance of 6% every six months, and an annual increment of 3%.

The study also assumes that, at an interval of 10 years, the employee gets 3 promotions during his service tenure. Most importantly, it is assumed that matching the employee’s contribution, the Government’s contribution too would witness an 8.7% increase per annum.

At the time of retirement, the employee is likely to get Rs. 2,87,26,201, which is split into two shares – 40% and 60%, which amounts to Rs. 1,14,90,481, and Rs. 1,72,35,720, respectively. 60% of the lumpsum pension wealth is given at the time of retirement. The remaining 40% is invested in an annuity scheme.

It is stated that the monthly pension will be a minimum Rs. 83,306. In addition to this, at the age of 70, the employee gets the remaining 40% back. The article strongly claims that this money could be the gift that the person leaves behind for his future generation.

The article’s highlight feature is the claim that if the Pay Commission recommendations are taken into account, the amount could be much higher and that the UDC could get as much as Rs. 5 crores at the time of retirement.

According to the old Govt pension scheme, the employee’s monthly pension amount would be Rs. 1,00,934, and after his demise, his spouse would get Rs. 10,317 plus Dearness Allowance. After his/her death, there are no more benefits for the family.

The article is indirectly stating that the absence of gratuity and other such benefits is not a huge issue. According to the old Govt pension scheme, at the time of retirement, the employee would make only Rs. 38,32,550, which is Gratuity (16.5 months) + EL Encashment + Commutation.

While discussing the General Provident Fund (GPF), the article assumes that since nobody leaves anything much in this fund, its overall impact on the total pension fund would be minimal.

The writer concludes his article by declaring that those who oppose the new pension scheme lack intelligence.

Source: 7thpaycommissionnews.in

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