Saturday, February 21, 2009

Revision of provisions regulating gratuity

No.7/7/2008-P&PW (F)
Government of India
Ministry of Personnel Public Grievances and Pensions
Department of Pension and Pensioners Welfare

Lok Nayak Bhawan,
Khan Market, NewDelhi-110 003
dated 13th February, 2009


Subject : Implementation of Government’s decision on the recommendation ofthe Sixth CPC – Revision of provisions regulating gratuity .

The undersigned is directed to saythat in terms of para 7.1 of this Department’s O.M. No.38/37/2008-P&PW(A)dated the 2nd September, 2008 issued in implementation of thedecision taken on the recommendation of the Sixth Central Pay Commission, thebenefit of adding years of qualifying service for the purpose of computation ofpension shall stand withdrawn with effect from the date of issue of the O.M.

2. Sixth Central Pay Commission in Para5.1.33 of its Report made the following recommendation:

“Linkage of fullpension with 33 years of qualifying service should be dispensed with. Once an employee renders the minimumpensionable service of 20 years, pension should be paid at 50% of the averageemoluments received during the past 10 months or the pay last drawn, whicheveris more beneficial to the retiring employee. Simultaneously, the extant benefit of adding years of qualifying servicefor purposes of computing pension/related benefits should be withdrawn as itwould no longer be relevant.”

This recommendation was acceptedby Government of India vide Resolution No.38/37/2008-P&PW (A) dated 29thAugust, 2008.

3. It is clear from the above recommendations/decisions, thatthe benefit of adding years of qualifying service is withdrawn for the purposeof computing pension as well as other related benefits such as gratuity.

4. This issues with the concurrence of the Ministry of Finance,Department of Expenditure U.O. No.4.2/40/2009-ICdated 12.2.2009

5. Ministry of Agriculture etc. are requested to take intoconsideration the above position while computing pension and gratuity ofgovernment servants who have retired since 2.9.2008.