Govt revises wages, pension for insurers, Nabard and RBI employees

The Ministry of Finance on Friday announced salary and pension revisions for several financial institutions. The latest move included wage hikes for Public Sector General Insurance companies (PSGICs) and the National Bank for Agriculture and Rural Development (Nabard), as well as pension revisions for retirees of the Reserve Bank of India (RBI) and Nabard.

 

In a statement, the finance ministry said it remains committed to strengthening key financial institutions that play an important role in the country’s inclusive and sustainable economic growth.

 

Why it matters

 

The move assumes significance, given that it will benefit about 46,322 employees, 23,570 pensioners, and 23,260 family pensioners. The revisions are expected to provide financial relief by helping employees and retirees manage rising living costs while maintaining a dignified standard of living after retirement.

 

 

Why was the decision taken?

 

The ministry stated that these measures are designed to enhance the morale of current employees and provide improved social security for pensioners. The move reflects the government’s focus on the financial well-being of employees and retirees who have spent many years serving these institutions.

 

What will change?

 

The latest guidelines will provide much-needed relief to the public-sector employees. It will significantly change the wages, pension, and family pension while also increasing the total outgo. Here's how the latest rules will affect employees from different institutions.

 

Public Sector General Insurance Companies

 

For employees of PSGICs, the wage revision will be effective from August 1, 2022. The overall wage bill will increase by 12.41 per cent. This includes a 14 per cent increase on existing basic pay and dearness allowance. Around 43,247 employees of PSGICs will benefit from this revision.

 

The revision also includes a rise in the National Pension Scheme (NPS) contribution from 10 per cent to 14 per cent for employees who joined on or after April 1, 2010.

 

Family pension has also been increased to a uniform rate of 30 per cent from the date it is published in the official gazette. This revision will benefit 14,615 family pensioners out of a total of 15,582 existing family pensioners.

 

The total financial outgo for PSGIC-related revisions will be ₹8,170.30 crore. This includes ₹5,822.68 crore towards wage revision arrears, ₹250.15 crore towards NPS contributions, and ₹2,097.47 crore towards family pension payments.

 

The PSGICs covered under this decision are National Insurance Company Ltd, New India Assurance Company Ltd, Oriental Insurance Company Ltd, United India Insurance Company Ltd, General Insurance Corporation of India, and Agricultural Insurance Company Ltd.

 

Nabard

 

For Nabard employees, the pay revision will come into effect from November 1, 2022. The increase in pay and allowances is around 20 per cent for all Group A, B, and C employees. This revision will benefit nearly 3,800 serving and former employees.

 

The government has also approved a pension revision for Nabard retirees who were originally recruited by Nabard and retired before November 1, 2017. Their basic pension and family pension have now been brought at par with ex-RBI Nabard retirees.

 

The pay revision will lead to an additional annual wage bill of about ₹170 crore and arrears of around ₹510 crore. The pension revision will result in a one-time arrear payment of ₹50.82 crore and an extra monthly pension outgo of ₹3.55 crore. This will benefit 269 pensioners and 457 family pensioners of Nabard.

 

Reserve Bank of India

 

The government has approved a revision in pension and family pension for RBI retirees. Under the revised rules, pension and family pension will increase by 10 per cent on basic pension plus dearness relief, effective from November 1, 2022. This change will increase the basic pension by a factor of 1.43 for all retirees, leading to a clear improvement in their monthly pension.

 

The pension revision will benefit a total of 30,769 people, including 22,580 pensioners and 8,189 family pensioners. The total financial impact is estimated at ₹2,696.82 crore. This includes ₹2,485.02 crore as a one-time payment towards arrears and ₹211.80 crore as recurring annual expenditure.