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16/03/2010

How retirement benefits computed for salaried segment?

How retirement benefits computed for salaried segment?

Provident Fund (PF), Pension Fund and gratuity are components of retirement benefit schemes. The Employees' Provident Fund and Miscellaneous

Provisions Act provides for compulsory contributory fund for the future of an employee after his retirement or for his dependents in case of his untimely death.
Every factory engaged in any industry specified in Schedule I in which 20 or more persons are employed, every establishment employing 20 or more persons or class of such establishments which the Central Government may notify, any other establishment so notified by the Central Government even if employing less than 20 persons is covered.

Both the employee and the employer contribute to the fund at the rate of 12 percent of the basic wages, dearness allowance and retaining allowance, if any, payable to employees per month. The rate of contribution is 10 percent in the case of some establishments which are mentioned in the Act. The rate of interest is fixed by the Central Government in consultation with the Central Board of Trustees, Employees' Provident Fund every year in March, so it can vary from year to year.

The entire amount of the PF along with the accumulated interest can be withdrawn by an employee on retirement, after attaining the age of 58 years. However, in cases of termination, retirement on account of permanent disablement, on immigration from India for a permanent settlement abroad and in cases of retrenchment, the amount can be withdrawn before the completion of 58 years. A person can also withdraw 90 percent of the amount a year before his retirement.

In case a person is going for a job change, his PF account can be transferred for further continuation. For this, he has to file a transfer application on Form 13 and submit it to the PF office concerned. If a person is switching to an organisation that does not come under this Act, he can receive all the accumulated money which is in his PF account till date. In cases of untimely death of the person, his nominee receives the amount.

The Employees' Provident Fund and Miscellaneous Provisions Act 1952 was amended in1971 and was renamed 'The Employees' Provident Fund and Family Pension Act 1952'. It was felt that in case of premature death of the worker or a permanent disablement, the PF was too less an amount to support him and his family. This led to the introduction of another social security benefit - pension.
After the last amendment in 1995, Employees' Pension Scheme 1995 came into effect from November 16, 1995. The assets and liabilities of the erstwhile PF were transferred and merged with the new pension fund. The benefits and entitlements to the members under the old scheme remains protected and continued under the new Employees' Pension Scheme 1995.

The existing members as on November 16, 1995 of PF who did not opt to join the erstwhile Employees' Family Pension Scheme 1971 and the beneficiaries under the erstwhile Employees' Family Pension Scheme 1971 in case of death or exit between April 1, 1993 and November 15, 1995 have the option to join the new scheme.
In case of gratuity, the employer has to contribute to this fund. The amount of gratuity payable is computed at a rate of 17 days' wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable was Rs 1 lakh earlier. After the 11th amendment to the Act in 1998 the amount payable under the scheme has been raised to Rs 3.5 lakhs. Companies have a choice of opting for a higher benefit of gratuity, that is, a higher total amount to be paid.

Completion of at least five years of continuous service is necessary to receive this amount. However, it does not apply in cases where a person has stopped working due to death or disablement.

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PME Due Date

Master Circular No. 25



Copy of Railway Board’s letter No. 69/H/3/11 dated 06.12.1974



Subject: Implementation of the Recommendations of the Visual Sub-Committee.



6. Periodical re-examination of serving Railway Employees:



6.l. In order to ensure the continued ability of Railway employees in Classes A l, A 2, A 3, B l and B 2 to discharge their duties with safety, they will be required to appear for re-examination at the following stated intervals throughout their service as indicated below:



6.1.1. Classes A l, A 2 and A 3 —At the termination of every period of three years, calculated from the date of appointment until they attain the age of 45 years, and thereafter annually until the conclusion of their service.



Note: (l) The staff in categories A l, A 2 and A 3 should be sent for special medical examination in the interest of safety under the following circumstances unless they have been under the treatment of a Railway Medical Officer.



(a) Having undergone any treatment or operation for eye trouble irrespective of the duration of sickness.



(b) Absence from duty for a period in excess of 90 days.



(2) If any employee in medical category A has been periodically medically examined at any time within one year prior to his attaining the age of 45, his next medical examination should be held one year from the due date of the last medical examination and subsequent medical examination annually thereafter.



If, however, such an employee has been medically examined, at any time earlier, than one year prior to his attaining the age of 45, his next medical examination should be held on the date he attains the age of 45 and subsequent medical examination annually thereafter.




Ammendment: It was ammended in 1993 as below



Age Group PME Due



Age 00-45 every 4yrs



Age 45-55 every 2yrs



Age 55-60 every year
Details:-
As per Rly Bd's Guideline of Medical Exam issued vide LNo. 88/H/5/12 dated 24-01-1993

a) PME would be done at the termination of every period of 4 years from date of appointment / Initial medical Exam till the date of attainment of age of 45 years, every 2 years upto 55 years & there after annual till retirement.
b) Employees who has been periodically examined at any time within 2years prior to his attaining the age of 45years would be examined after 2years from the date of last PME & subsequent PME for every 2years upto 55years age.Of

NRMU 4 you
SMLokhande





6.1.2. Classes B-1 and B-2—On attaining the age of 45 years, and thereafter at the termination of every period of five years.