Retirement benefits for railway employees absorbed in Public Sector Undertakings – Part C of Master Circular No. 53(2021) RBE No. 18/2021
GOVERNMENT OF INDIA (BHARAT SARKAR)
MINISTRY OF RAILWAYS (RAIL MANTRALAYA)
(RAILWAY BOARD)
M.C. No. 53(2021)
RBE No. 18/2021
No. D-43/14/2019-F(E)III
New Delhi, dated:10.03.2021.
Part C
Retirement benefits for railway employees absorbed in Public Sector Undertakings
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Pension on absorption in or under a corporation, company or body-
(1) A railway servant who has been permitted to be absorbed in a service or post in or under a corporation or company wholly or substantially owned or controlled by the Central Government or a State Government or in or under a body controlled or financed by the Central Government or a State Government shall be deemed to have retired from service from the date of such absorption and subject to (3) below, he shall be eligible to receive retirement benefits, if any, from such date as may be determined, in accordance with the orders of the Railway applicable to him.
(Authority: Railway Board’s letter No. F(E)III/2003/PN1/25 dated 20.01.05)
Explanation: – Date of absorption shall be-
(i) In case a railway employee joins a corporation or company or body on immediate absorption basis, the date on which he actually joins that corporation or company or body;
(ii) In case a railway employee initially joins a corporation or company or body on foreign service terms by retaining a lien under the railways, the date from which his unqualified resignation is accepted by the railways.
(2) The provisions of (1) shall also apply to a railway servant who is permitted to be absorbed in joint sector undertakings , wholly under the joint control of Central Government and State Governments/Union Territory Administrations or under the joint control of two or more State Governments/Union Territory Administrations or under the joint control of two or more State Governments or Union Territory Administrations.
(3) Where there is a pension scheme in a body controlled or financed by the Central Government in which a railway servant is absorbed, he shall be entitled to exercise option either to count the service rendered under the railways in that body for pension or to receive retirement benefit for the service rendered under the railways in accordance with the orders issued by the railways .
(Authority : Railway Board’s letter No. 2011/F (E) 111/1 (1)9 dated 23.09.13)
Explanation: – Body means autonomous body or statutory body.
(A) Clarification was issued that resignation from railway service with a view to join Public Sector Undertaking shall be treated as good and sufficient from the point of view of administration to claim retirement benefits.
(Authority: F(E)III/66/PN1/25 dated 21.09.66)
(B) Absorbed railway servant in the event of his resignation within two years from the date of his absorption was required to obtain approval of the Government before he could take up any private employment.
(Authority: F(P)/67/PN1/18 dated 18.02.1970)
(C) The amount of commutation of pension of a portion of pension upto a maximum of one third was exempted from income tax payable the absorbed railway servant. Those who opted for lumpsum payment in lieu of pension, the lumpsum payment was treated as two components
(i) The commuted value upto the normal limit of one third of pension and
(ii) Terminal benefit equal to 2/3rd of pension from income tax, the terminal benefit component was chargeable to recipient was allowed to spread this amount evenly over the preceding three years for levy of income tax.
(D) Resignation with a view to absorption in Public Sector Undertaking was treated as deemed retirement. The amount of DCRG payable to the absorbed employee was exempted from income tax.
(Authority: F(P)/67/PN1/18 dated 10.09.1971)
(E) With effect from 21.06.67 the benefit of Family Pension Scheme, 1964 as incorporated in the Railway Pension Rules was allowed to the absorbed employee provided he was governed by the Pension Rules and was otherwise eligible for pension on the date of his absorption . This was not allowed to a railway servant who was eligible only for service gratuity in lieu of pension. The benefit of family pension under the Public Sector Undertaking was not admissible or the absorbed employee was not covered under the Family Pension Scheme of the Enterprise for one reason or the other.
Authority: F(E)III/75/ PN1/15 dated 29.01.76
F(E)III/78/ PN1/18 dated 24.08 .78
F(E)III/85/PN1/25 dated 26.12.85
(F) The absorbed railway servant was allowed option either to get the family pension from the Railways or from the Public Sector Undertaking subject to fulfillment of spec ified conditions .
(Authority: F(E)l1190/PN1/8 dated 21.02.1990 & 25.06.1992)
(G) Permanent Railway employees. deputed to Public Sector Undertaking/Autonomous Bod1es/Jo1m Sector Undertaking under the control of State Government and subsequently absorbed permanently in such organizations with the prior permission of the competent authority, allowed w.e.f. 09.01.94 pro-rata retirement benefits as admissible to permanent Railway employees absorbed permanently under the A·utonomous Bodies controlled by the ‘Central Government.
W.e.f. 31.03.87, Railway employees are required to join Public Sector Undertakings/Autonomous Bodies/Joint Sector Undertakings under the control of State Government on immediate absorption basis.
(Authority: F(E)III/84/PN1/5 dated 25.06.84
& F(E)III/92/PN1/25 dated 16.03.93)
(H) Retirement benefits to a Railway servant who had applied on his own volition on the basis of his application in response to Press advertisement for posts in Public Sector Undertakings and Autonomous Bodies was also allowed the payment of retirement benefits as allowed to those who were permanently absorbed after deputation in public interest.
(Authority: E(NG)/72/AP/12 dated 02.08.1972
E(NG)II/73/AP/11 dated 05.12.1975
E(NG)II 77/AP/19 dated 24.05.1978)
Conditions for payment of pension on absorption consequent upon conversion of a Railway Department into a public sector undertaking.-
(1) On conversion of a Department of the Railway into a public sector undertaking, all railway servants of that Department shall be transferred en-masse to that public sector undertaking, on terms of foreign service without any deputation allowance till such time as they get absorbed in the said undertaking, and such transferred railway servants shall be absorbed in the public sector undertaking with effect from such date as may be notified by the Government.
(2) The Government shall allow the transferred railway servants an option to revert back to the railway or to seek permanent absorption in the public sector undertaking .
(3) The option referred to in (2) above shall be exercised by every transferred railway servant in such manner and within such period as may be specified by the Government.
(4) The permanent absorption of the railway servants as empl9yees of the public sector undertaking shall take effect from the date on which their options are accepted by the Government and on and from the date of such acceptance , such employees shall cease to be Government servants and they shall be deemed to have retired from railway service.
(5) Upon absorption of railway servants in the public sector undertaking, the posts which they were holding in the Government before such absorption shall stand abolished.
(6) The employees who opt to revert to railway service shall be redeployed through the surplus cell of the Government.
(7) The employees including quasi-permanent and temporary employees but excluding casual labourers, who opt for permanent absorption in the public sector undertaking shall, on and from the date of absorption , be governed by the rules and regulations or bye-laws of the public sector undertaking.
(8) A permanent railway servant who has been absorbed as an employee of a public sector undertaking his family shall be eligible for pensionary benefits (including commutation of pension, gratuity, family pension or extraordinary pension), on the basis of combined service rendered by the employee in the Railways and in the public sector undertaking in accordance with the formula for calculation of such pensionary benefits as may be in force at the time of his retirement from the public sector undertaking or his death or at his option, to receive benefits for the service rendered under the Railways in accordance with the orders issued by the Government.
Explanation:- The amount of pension or family pension in respect of the absorbed employee on retirement from the public sector undertaking or on death shall be calculated in the same way as calculated in the case of a railway servant retiring or dying on the same day.
(9) The pension of an employee under (8) above shall be calculated on fifty per cent of emoluments or average emoluments, whichever is more beneficial to him.
(10) In addition to pension or family pension, as the case may be, the employee who opts for pension on the basis of combined service shall also be eligible to dearness relief as per industrial dearness allowance pattern.
(11) The benefits of pension and family pension shall be available to quasi-permanent and temporary transferred railway servants after they have been confirmed in the public sector undertaking.
(12) A permanent railway servant absorbed in a public sector undertaking or a temporary or quasi-permanent railway servant who has been confirmed in a public sector undertaking subsequent to his absorption therein, shall be eligible to seek voluntary retirement after completing ten years of qualifying service with the Government and the public sector undertaking taken together , and such person shall be eligible for pensionary benefits on the basis of qualifying service.
(13) The Government shall create A pension fund in the form of a trust and the pensionary benefits of absorbed employees shall be paid out of such pension fund.
(14) The Member Staff, Railway Board shall be the Chairperson of the Board of Trustees which shall include representatives of the Ministries of Finance, Personnel, Public Grievances and Pensions, Labour. concerned public sector undertaking and their employees and experts in the relevant field to be nominated by the Government.
(15) The procedure and the manner in which pensionary benefits are to be sanctioned and disbursed from the pension fund shall be determined by the Government on the recommendations of the board of trustees.
(16) The Government shall discharge its pensionary liability by paying in lump sum as a one time payment to the pension fund the pension or service gratuity and retirement gratuity for the service rendered till the date of absorption of the railway servant in the public sector undertaking.
(17) The manner of sharing the financial liability on account of payment of pensionary benefits by the public sector undertaking shall be determined by the Government.
(18) Lump sum amount of the pension shall be determined in accordance with the Tab le of the values in Appendix to the Railway Services (Commutation of Pension) Rules. 1993.
(19) The public sector undertaking shall make pensionary contribution to the pension fund for the period of service to be rendered by the concerned employees under that undertaking at the rates as may be determined by the board of trustees so that the pension fund shall be self supporting
(20) If, for any financial or operational reason, the trust is unable to discharge its liabilities fully from the Pension Fund and the public sector undertaking is also not in a position to meet the shortfall, the Government shall be liable to meet such expenditure and such expenditure shall be debited to either the fund or to the public sector undertaking.
(21) Payments of pensionary benefits of the pensioners of a railway Department on the date of conversion of it into a public sector undertaking shall continue to be the responsibility of the Government and the mechanism for sharing its liabilities on this account shall be determined by the Government.
(22) Upon conversion of a Railway Department into a public sector undertaking ,-
(a) the balance of provident fund standing at the credit of the absorbed employees on the date of their absorption in the public sector undertaking shall with the consent of such undertaking, be transferred to the new provident fund account of the employees in such undertaking;
(b) earned leave and half pay leave at the credit of the employees on the date of absorption shall stand transferred to such undertaking; (c) the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Railways and in the event of his dismissal or removal or retrenchment, the decisions of the undertaking shall be subject to review by the Ministry of Railways with the undertaking.
(23) In case the Government disinvests its equity in any public sector undertaking to the extent of fifty-one per cent or more, it shall specify adequate safeguards for protecting the interest of the absorbed employees of such public sector undertaking.
(24) The safeguards specified under (23) above shall include option for voluntary retirement or continued service in the undertaking or voluntary retirement benefits on terms applicable to railway servants or employees of the public sector undertaking as per option of the employees and assured payment of earned pensionary benefits with relaxation in period of qualifying service, as may be decided by the Government.
Conditions for payment of pension on absorption consequent upon conversion of a Railway Department into a Central autonomous body. –
(1) On conversion of a Department of the Rail w ay into an autonomous body, all railway servants of that Department shall be transferred en-masse to that autonomous body on terms of foreign service without any deputation allowance till such time as they get absorbed in the said body and such transferred railway servants shall be absorbed in the autonomous body with effect from such date as may be notified by the Government.
(2) The Government shall allow the transferred railway servants an option to revert back to the Go11ernment or to seek permanent absorption in the autonomous Body.
(3) The option referred to in (2) above shall be exercised by every transferred railway servant in such manner and within such period as may be specified by the Government.
(4) The permanent absorption of the railway ·servants of the autonomous body shall take effect from the date on which their options are accepted by the Government and on and from the date of such acceptance, such employees shall cease to be railway servants and they shall be deemed to have retired from railway service.
(5) Upon absorption of railway servants in the autonomous body, the posts which they were holding in the Government before such absorption shall stand abolished.
(6) The employees who opt to revert to railway service shall be redeployed through the surplus cell of the Government.
(7) The employees including quasi-permanent and temporary employees but excluding casual labourers, who opt for permanent absorption in the autonomous body, shall on and from the date of absorption, be governed by the rules and regulations or bye-laws of the autonomous body.
(8) A permanent railway servant who has been absorbed as an employee of an autonomous body and his family shall be eligible for pensionary benefits (including commutation of pension, gratuity , family pension or extra-ordinary pension), on the basis of combined service rendered by him in the Railways and autonomous body in accordance with the formula for calculation of such pensionary benefits as may be in force at the time of his retirement from the autonomous body or death or at his option , to receive benefits for the service rendered under the Railways in accordance with the orders issued by the Government.
Explanation:- The amount of pension or family pension in respect of the absorbed employee on retirement from autonomous body or death shall be calculated in the same way as would be the case with a railway servant retiring or dying on the same day.
(9) The pension of an employee under (8) above shall be calculated at fifty per cent of emoluments or average emoluments, whichever is more beneficial to him.
(10) In addition to pension or family pension, as the case may be, the absorbed employees who opt for pension on the basis of combined service shall also be eligible to dearness relief as per central dearness allowance pattern.
(11) The benefits of pension and family pension shall be available to quasi- permanent and temporary transferred railway servants after they have been confirmed in the autonomous body.
(12) The Government shall create a pension fund in the form of a trust and the pensionary benefits of ·absorbed employees shall be paid out of such pension fund.
(13) The Member Staff, Railway Board shall be the Chairperson of the board of trustees which shall include representatives of the Ministries of Finance, Personnel, Public Grievances and Pensions, Labour, concerned autonomous body and their employees and experts in the relevant field to be nominated by the Government.
(14) The procedure and the manner in which pensionary benefits are to be sanctioned and disbursed from the pension fund shall be aetermined by the Government on the recommendations of the board of trustees.
(15) The Government shall discharge its pensionary liability by paying in lump sum as a one time payment to the pension fund the pension or service gratuity and retirement gratuity for the service rendered till the date of absorption of the railway servant in the autonomous body.
(16) The manner of sharing the financial liability on account of payment of pensionary benefits by the autonomous body shall be determined by the Government.
(17) Lump sum amount of the pension shall be determined in accordance with the Table of the values in Appendix to the Railway Services (Commutation of Pension) Rules, 1993.
(18) The autonomous body shall make pensionary contribution to the pension fund for the period of service to be rendered by the concerned employees under that body at the rates as may be determined by the Board of Trustees so that the pension fund shall be self-supporting.
(19) If, for any financial operational reason, the trust is unable to discharge its liabilities fully from the pension fund and the autonomous body is also not in a position to meet the shortfall, the Government shall be liable to meet such expenditure and such expenditure shall be debited to either the fund or to the autonomous body, as the case may be.
(20) Payments of pensionary benefits of the pensioners of a Railway Department on the date of conversion of it into an autonomous body shall continue to be the responsibility of the Government and the mechanism for sharing its liabilities on this account shall be determined by the Government.
(21) Upon conversion of a Department of the Railway into an autonomous body.-
(a) the balance of provident fund standing at the credit of the absorbed employees on the date of their absorption in the autonomous body shall, with the consent of such body, be transferred to the new provident fund account of the employees in such body;
(b) earned leave and half pay leave at the credit of the employees on the date of absorption shall stand transferred to such body;
(c) the dismissal or removal from service of the autonomous body of any employee after his absorption in such body for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Railways and in the event of his dismissal or removal or retrenchment , the decisions of the body shall be subject to review by the Ministry of Railways.
(22) In case the Government disinvests its equity in any autonomous body to the extent of fifty-one per cent. or more, it shall specify adequate safeguards for protecting the interest of the absorbed employees of such autonomous body.
(23) The safeguards specified under (22) above shall include option for voluntary retirement or continued service in the body, as the case may be or voluntary retirement benefits on terms applicable to railway employees or employees of the autonomous body as per option of the employees, assured payment of earned pensionary benefits with relaxation in period of qualifying service, as may be decided by the Government.”.
(Authority: Railway Board’s letter No. 2011/F (E) lll/1(1)9dated 23.09.13)
(I) The benefit of pro rata retirement benefits between Railways and Central Autonomous bodies is governed by the same sets of orders as are applicable for absorption of a railway servant in Public Sector Undertakings. As per the extant provisions, service rendered outside Central Government did not count for pension on Railways except in the case of scientific. employees of autonomous bodies who are allowed the benefit of counting of service for pension on the Railways with effect from 29.08.84, Government decided to allow the benefit of counting of service for retirement benefits between Railways and the Central Autonomous Bodies and vice versa.
(Authority: F(E)III/84/PN1/4 dated 25.09.84, 08.04.85)
COMMENTS