PRO-RATA PENSION  Vs  COMBINED SERVICE PENSION -FAQ

For absorbed Gr-B and Gr-A officers:-

PRO-RATA  PENSION

1) What is pro-rata pension ?

Pro-rata pension means the proportionate pension for the Government service. It is calculated as per the Government pension rules. The pro-rata pension is paid by the Government. 

2) Who is eligible for pro-rata pension benefits ?

In MTNL the absorbed Gr-B or Gr-A employees having 9 years and 9 months of continuous service (including the training period ) as on 30/09/2000 are eligible for pro-rata pension for the period of Government service. 

3) What are all the pro-rata pension benefits ?

a)       Pension from 01/10/2000: Arrears of pension will be paid from 01/10/2000.

b)      Gratuity : It will be paid with interest at GPF interest rates compounded annually from 01/10/2000 till date of payment..

c)       Leave  Encashment:- EL at credit on 01/10/2000 can be encashed. OR carried over for encashment on retirement.

d)       Family pension based on CDA pay on 01/10/2000 if specifically opted.

Commutation of pension is NOT admissible.

4) How the pension is calculated  as per Government rules ?

As per Government pension rules the pension depends upon length of qualifying service and average pay for the last 10 months.

Three months and above is one six monthly period. The training period prior to appointment is also considered as qualifying service. The maximum six monthly periods is limited to 66.

Pension=10 months average of basic pay from           Number of six monthly periods of

               01/12/1999 to 30/09/2000 / 2                X    Qualifying service / 66    

Pension is taxable.

Minimum amount of pension p.m. = Rs.1913

5) How the Gratuity is calculated ?

Gratuity = Pay plus DA for Sep’2000   X     No. of six monthly periods of service / 4.

·        No. of six monthly periods is limited to 66.

·        The maximum limit is Rs. 3.5 lakhs only.   

Gratuity is NOT taxable.

6) Any interest is payable for arrears of pension and gratuity ?

6.1 Interest is NOT payable for the arrears of pension.

6.2 The gratuity has become due on 01/10/2000. This gratuity amount will  carry interest till the date of payment at GPF interest rate, compounded yearly.

The interest on gratuity is taxable.   

7) Leave Encashment :-

7.1 EL at credit on 01/10/2000 can be encashed.

L. E.  = Pay + DA on CDA on 01/10/00 X No. of days of EL / 30

Leave Encashment amount beyond Rs.three lakhs is taxable.

Benefits for MTNL Service:-

8. Whether any pension is payable for MTNL service after 01/10/2000 ?

Yes. If you opt for pro-rata pension, you will get the following benefits for the MTNL service.

a)     Contributory Provident fund 

b)    Gratuity under Gratuity Act

c)     EPS (Employees Pension Scheme’95) Pension for MTNL service. 

9. What is Contributory Provident Fund ?

Contributory Provident fund:- Every month MTNL will pay CPF contribution to MTNL PF Trust  @12% of basic pay plus DA of that month.

Out of this contribution a sum of Rs.541/- will be remitted to Employees Provident Fund Organisation towards EPS pension contribution.

The balance (12% of basic pay + DA (-) Rs.541/-) money in the PF Trust will accumulate with interest compounded yearly and will be paid on retirement by the MTNL PF Trust.. 

10. How gratuity is calculated under gratuity Act ?

Gratuity is equal to 15 days of service for every completed year of service.

Gratuity payable for Government service and gratuity payable for MTNL service together is limited to 3.5 lakhs.

11. What is EPS Pension ?

It is governed by ‘The Employees’ Pension Scheme, 1995. The EPS Pension is paid by Employees Provident Fund Office of Central Government..

Out of the CPF contribution a sum of  Rs.541/- per month (@8.33% of Rs.6500) will be paid to EPF organisation as contribution towards EPS pension up to 58 years of age. However the EPS pension will start on retirement at 60 years.

EPS pension = RS.6500 X Period of contribution / 70

Two years weightage will be added to period of contribution on retirement.

12.Whether any DA is admissible on EPS pension ?

No. DA is not admissible on EPS pension.

13.  Who are eligible for EPS pension ?

a)     Gr-C and Gr-D employees recruited in MTNL on or after 01/11/98

Gr-B and Gr-A officers recruited on or after 01/10/2000.

b)    Pro–rata pension optees with 10 years of continuous service in MTNL up to his age of 58. In other words the pro-rata optees with date of birth on after 01/10/1952 are eligible.

Pension on combined service:-

1.       Who are eligible for pension on combined service ?

Absorbed employees who have not opted for pro-rata pension are eligible for pension on combined service.

2.     What are the benefits ?

a)     Pension on total service (Service from date of entry to date of retirement) as per government pension rules.

b)    Gratuity as per government pension rules

c)     Leave encashment of EL at credit on the date of retirement.

3.     Who will pay the pension on combined service ?

As an interim measure MTNL is paying. The ruling position is as under:-

a)     For Gr-C and Gr-D employees :-  MTNL pension trust should pay. This pension trust has not yet been constituted.

b)    For Gr-B and Gr-A employees:- Central Government pension trust should pay. This pension trust has not yet been constituted.

4.     What do we demand ?

All the Unions and Associations of MTNL demand that the pension should be paid by the Government. In BSNL pension is poid by the Government.

5.     Please tell me clearly whether I should opt for prorata pension or not? 

Illustrations of benefits under both the options will be on our site within a few days.

For any query please mail to tkjawahar@rediffmail.com