Grant of Non-Productivity linked Bonus (ad-hoc Bonus) to Central Government employees for the year 2009-2010

No.7/22/2008-E-III(A)
Ministry of Finance
Department of Expenditure
(E.III-A Branch)

New Delhi,The 22nd September,2010

Subject: Grant of Non-Productivity linked Bonus (ad-hoc Bonus) to Central Government employees for the year 2009-2010-Extension of orders to Autonomous Bodies

     Orders have been issued vide this Ministry’s Office Memorandum No.7/24/2007 E-III(A) dated 22-09-2009 authorizing 30 days emoluments as Non-PLB (as-hoc bonus) for the accounting year 2009-2010 to the central government employees not covered by the productivity Linked Bonus Schemes. The undersigned is directed to say that it has now been decided that the Non-PLB (Ad-hoc) bonus so admissible subject to the terms and conditions laid down in the aforesaid orders, may be extended to the employees of autonomous bodies, partly or fully funded  by the Central Government which (i)follow the pattern of emoluments identical to that of the Central Government and(ii) do not have any bonus or ex-gratia or incentive scheme in operation.

2. In case of doubt as to the operation of these orders the clarificatory orders,circulated vide this Ministry,s OM No.14(10) E-Coord/88 dated 4-10-88,as amended fromtime to time,may be kept in view,mutatis mutandis.

3. Any request for funding by the Government to meet the liability on account of Non-PLB (Ad-hoc Bonus ) in respect of various organizations would  not be considered by the Ministries cicerned, having regard to the stipulation of aforesaid OM dated 22.09.2010 that the expenditure on Non-PLB (Ad-hoc Bonus) should be met from within the existing budgetary provisions of the respective organizations. While the Autonomous Bodies not funded by the Central Government may also adopt these orders in respect of their employees,no liability for funding will in any case lie on the Central Government on this account.

(Renu Jain)
Director 

Payment of Dearness Allowance to Centrel Government employees-Revised rated effective from 1-7-2010-Finance Ministry Order

No.1(6)/2010-E-II(B)
Government of India
Ministry of Finance
Department of Expenditure


New Delhi,the 22nd  September,2010

OFFICE MEMORANDUM

Subject:Payment of Dearness Allowance to Centrel Government employees-Revised rated effective from 1-7-2010

       The undersigned is directed to refer to this ministry’s Office Memorandum No.1(3)
/2009-E-II(B) dated 26th March.2010 on the subject mentioned above and to say that the president is pleased to decide that the Dearness Allowance payable to central government employees shall be enhanced   from the existing rate of 35% to 45% with effect from 1st July 2010.

2 . The provisions contained in paras 3,4 and 5 of this Office Memorandum No.1(3)/2008 29th August,2008 shall continue to be applicable while  regulating  Dearness Allowance under these orders

3. The additional instalment of  Dearness Allowance payable under these orders shall be paid in cash ro all Central Government employees.

4.These orders shall also apply to the civilian employees paid from the Defence Services Estimates and expenditure will be chargeable to the relevant head of the Defence Services Estimates.In regard to Armed Forces Personnel and railway employees separate orders will be issued by the Ministry of Defence and Ministry of Railways,respectively.

5. In so far the persons serving in the Indian Audit an Accounts Department are concerned, these orders issue after consultation with the Comptroller and Auditot General of India.

(Anil Sharma)
Under Secretary to the Government of India

NPS- Venue for rising rate retirement

           Are you a salaried employee about to retire? Or are you working in the food processing business which is largely unorganized & you are worried about your retirement plans? Well skyrocketing inflation can make life difficult for even a salaried person. For the unorganized sector, retirement plans are even more difficult and hence you need to come up with a good strategy to ensure you have your retirement funds in place. This article touches upon the impact of new pension schemes (NPS) introduced by the government and the latest developments that have taken place in retirement plans.
New Pension Scheme (NPS)

        What is a NPS? NPS is similar to Mutual funds. You keep aside some money for your retirement and this money is put into the capital market. Hence, the sum which you will get post retirement will be dependent on the performance of capital market. These are managed by fund managers.

     Currently 6 fund houses appointed by the government are available under NPS. These are SBI Pension Funds Private Limited, UTI Retirement Solutions Limited, ICICI Prudential Pension Funds Management Company Limited, Religare Pension Fund Limited, IDFC Pension Funds Management Company Limited, and Kotak Mahindra Pension Fund Limited. There are 3 schemes available under NPS which is:

          Fund E: If you invest in this fund, then a portion of not more than 50 per cent of your invested money will be put into equity. You should consider investing in this retirement plan only if your risk appetite is high as up to 50 per cent of your money will be linked to the performance of equity.

       Fund C: if you invest in this fund, then all of the money will be put into fixed income instruments like corporate bonds and government securities. You should consider investing in this fund if your risk appetite is medium as corporate bonds are not that risky.

         Fund G: In this fund, all of your money will be invested in government securities. Hence, this is suited for you if you want it to be an almost risk free investment.

         You can choose to invest in any of these funds or you can invest in a mix of these funds. If you are not able to choose between these funds then your contributions will be invested in a fund with 15% in equity, 45% in corporate bonds and 40% in government bonds. However with increase in age after 35 years, the government bond exposure will increase with a maximum limit of 80 per cent and 10 per cent each in equity and corporate bonds. To ensure you avail the scheme you should compulsorily contribute at least Rs 500 per month.

Amendments Proposed for workers in unorganized sector

            The government has proposed to roll out a ‘fixed income pension’ plan to the workers in the unorganized sector. This will be done in three steps. Firstly, the monthly contributions you make will be invested as per NPS guidelines. Secondly, state funds for old age savings scheme will be added to this. Thirdly, if any gap exists between the sum guaranteed and sum generated from the above two steps then the central government will provide the requisite fund. The new plan will be started off initially in states like Haryana, Karnataka and Andhra Pradesh which are known to be quick in implementing government schemes. However this amendment is only meant for workers in the unorganized sector. Central and State government employees will continue to get pension through NPS.

Tips for Employees

            If you are planning to save for your retirement then you should avail NPS as the fund management charges are very low which is 0.0009% compared to 1.5 - 2.5 per cent for mutual fund or insurance products.

           Currently, NPS does not offer any tax exemptions unlike other retirement plans. It falls under the category EET (exempt-exempt-tax) system which means that maturity benefits you receive post retirement will be taxable. However, with DTC replacing the current tax code, NPS will be tax exempted upon withdrawal too. Therefore, you should avail this scheme when DTC comes into place.

          You can also make weekly contributions in NPS. But for every contribution, your transaction cost will increase. Hence, it is better to keep some money from your monthly compensation and contribute it to NPS once in a month.

         As compared to other retirement plans like (Employee provident fund) EPF, the returns are better. Currently, EPF gives 8 per cent interest rate. However, investing in NPS will earn you much better returns because of the equity portfolio of the scheme.

        To conclude, NPS should be given serious consideration as a possible scheme for accumulating your retirement funds as it is comparatively a much better scheme in the market currently. It has earned an impressive average return of 19.5 per cent which makes sense of ploughing back some money in the capital market. For the unorganized sector, amendment proposed by the government will ensure you get an assured sum post retirement.
 The author Adhil Shetty is the CEO of BankBazaar.com
courtesy:expressindia.com

Recent Posts

Popular Posts