Pension/PRMA/Investment Plan for Retirees
When/where to apply/approach, How to Get? What is the Option? What are all the documents to be submitted? When they have to vocate the quarters? What are all the conditions?
Retirement is defined as “withdrawing from one’s position or occupation or from active working life.” It does not mean that you have to settle down with newspaper reading or watching TV serialsthe whole day. It is a time to fulfill your cherished activities for which you never had the opportunity and time during your active work life in your factory or office.In the end, retirement is what you make it out to be and there is no need to fear the future or feel depressed about it, if you have planned fairly well.As you get closer to retirement day you have to monitor your retirement plans carefully. On the last service day the retirees will receive a suitcase, a relieving from service letter, a letter indicating the sanctioning of gratuity to your bank account, a Service certificate indicating your designations between your joining date and retiring date. Take care of the following :
- Obtain PAN card for yourself and for your spouse and check that all names do not differ on different ID cards. Keep sufficient copies of Photographs, PAN cards and adhaar cards of self and spouse for furnishing at various stages.
- EPS -95 Pension: The EPS-95 pension Cell (Trichy pension) is located in the PF Office. EPS-95 Pension, is normally given at the age of 58 years of age or it can be differed to 60 years. In the month of retirement of the employee, the Pension cell will arrange a class to apprise the would be retirees of the requirements. For getting the EPS-95 Pension (Trichy pension), the following will have to be submitted:
- a) Five copies of photographsof the employee and spouse taken together.
- b) Also the retiree should possess an independent bank account in his/her own name in the place of his/her choice (It should not be a joint account) to get the pension into his/her bank account.
- c) Life certificate should be furnished periodically ( i.e every year during the month of November)
- d) EPS is taxable and has to be considered under the head Income from Salaries.
3) NLC Pension: The NLC pension cell is located in the PF Office. NLCIL pays 10% of the employees Basic and DA to a trust to form a corpus fund which is parked with a fund manager (LIC) .They add 7.9% interest to the corpus fund. On retirement this amount is transferred to an annuity provider who gives pension.
Eligiblity: Previously Those who are roll in our organization on 01.01.2007, and completed 15 years of service (Prior or after the year 2007) are only eligible to get pension. Now this has been is revised as
“Those who are roll in our organization on or after 01.01.2007, and completed 15 years of service ( Prior or after the year 2007) are only eligible to get the pension. Now the condition of total completed service as 15 years is removed
How ever, if the individual accumulated corpus fund is less than Rs. 1,00,000/- this will be returned to the individual employee.
Those who are interested for additional top up in the corpus fund will be allowed.
There are four pension options
|Options||Period of pension||Spouse||Nominee|
|Option – 1||Pension will get upto death of the retired employee||Nil||Nil|
|Option-II||Pension will get up to death of the retired employee||After death of employee spouse will get annuity amount in full.||Nil|
|Option-III||Pension will get up to death of the retired employee||After death of retired employee spouse will get pension.||Nil|
|Option-IV||Pension will get up to death of the retired employee||After death of retired employee spouse will get pension||After death of spouse the full annuity amount will get by nominee|
of which majority people prefer Option-4, some people prefer option-2. Once selected the pension option cannot be changed but nominees can be changed. After the death of the employee, the heirs should immediately produce the death certificate and legal heir certificate.In the month of retirement the Pension cell will arrange a class to apprise the would be retirees of the requirements. The classes will be conducted during 2nd Thurs day of the individual retirement month at L&DC. At that time the following are to be produced
- Provide three pass port size photograph employee and spouse (separately), Copies of Bank pass book first page, Ration card and Pan card and fill up the relevant application
- Payment option : You can opt for monthly or quarterly or half early or yearly payment.
- Life certificate : Life certificate should be produced by the individual
(i) once year in 5 years from the date of retirement .for those who have opted option II & IV and
(ii) Those who have opted option I & III the life certificate should be produced every year.
- PRMA/PRMI :The office for Post retirement Medical Assistance and the Post-retirement Medical Insurance is in the Benefit Coordination cell (BCC) located in the PRO office.
- a) The application with photographs of employee and spouse should be submitted at the BCC through the Unit HR at least 45 days before retirement day.
- b) The PRMA amount varies according to the designation and is given once in a year.
- c) On the next day after retirement submit the Medical Identity book and the medical treatment books of self and dependents to the Unit HR. They will issue a copy of the letter to CGS NLCIL/GH stating that the MIB and MTBs have been submitted and asking CGS whether any dues are pending from the employee. On submitting this copy along with copies of adhaar card and Pan cardto BCC at PRO, the Health insurance cards will be handed over. Two separate PRMI Health Insurance ID cards will be issued,one for the employee and one for thespouse.
- d) Cashless treatment can be obtained only on admission (only for inpatients) from a list of network hospitals (List will be given).If you go to a non-listed hospital you can get treatment and claim the reimbursement.
- e) The PRMA renewal form should be submitted every year before 31stMarch or you stand to lose the benefit. The Form will be sent to the employees registered address by registered post . The form can also be downloaded from NLCIL/Retirees portal. Fill it and send it back to BCC through registered post or in person through self or known person after getting it signed by competent authority.
- f) The BCC will also conduct a class for the would be retirees and also provide a booklet with all the procedures and details..
- RETIRED EMPLOYEE ID CARD: Submit your employee ID Card at Unit HR on the next day after retirement. After a couple of days the Retired employee ID card can be obtained from the photo cell at the NLCIL/GH.
- Final Settlement: The last month salary ( 20% of the exgratia in case of VR) will be retained and settled only after vacating the quarters. After furnishing the vacation report from TA along with the NLCIL Library Clearance Certificate and TA Claim form at the Unit HR from where the employee retired, the final settlement will be made.
- Retaining of quarters:
- Up to 4 months from the date of retirement – On normal rent
- Next 4 months – On remitting Approx Rs. 10,000/-
Note: If the individual retired employee is not vacate the quarters with in one year from the date of retirement, the Retirement Travelling Allowance ( Two months last drawn Basic pay +DA ) will not be eligible.
Investment options for the retired
|1||Senior Citizens Saving Scheme (SCSS)|
|The scheme is for senior citizens (above 60) or early retirees (VRS) , provided they do so within one month of receiving their retirement funds. Investment in SCSS allows premature withdrawals. The VRS retirees should furnish a copy of the gratuity letter to indicate source of income to the post office while submitting the application.|
|Availed from||Post office or a bank|
|Tenure||Five-years, which can be further extended by three years once the scheme matures.|
|Interest rate||Currently, 8.6 per cent per annum. Once invested, the rates remain fixed for the entire tenure. Currently, SCSS offers the highest post-tax returns among all comparable fixed income taxable products.|
|Whether the interest is taxable||Fully taxable. Eligible for tax benefits under Section 80C|
|The upper investment limit||Rs.15 lakh.|
|Guarantee||The capital invested and the interest payout, which is assured, has sovereign guarantee|
|2||Post Office Monthly Income Scheme (POMIS) Account|
|Instead of going to the post office each month, the interest can be directly credited to the savings account of the same post office. Also, one may provide the mandate to automatically transfer the interest from the savings account into a recurring deposit in the same post office.|
|Availed from||Post Office|
|Interest rate||7.8 per cent per annum|
|Whether the interest is taxable||Fully taxable. Doesn’t qualify for any tax benefit|
|The upper investment limit||Maximum Rs 9 lakh under joint ownership and Rs 4.5 lakh under single ownership.|
|3||Bank fixed deposits (FDs)|
|Interest rate :Senior citizens get an extra 0.25-0.5 per cent per annum, depending on the bank. Few banks offer around 7.75 per cent to seniors on deposits with longer tenure.|
|Laddering :An investor may spread the amount across different maturities through ‘laddering’. It not only provides liquidity to funds, but also manages the ‘re-investment risk’ .When the shortest-term FD matures, renew it for the longest duration and continue the process as and when various FDs get matured. While doing so, ensure that your regular income need is met, and deposits are spread across various maturities and institutions.|
|Life Insurance Companies: The pension or the annuity inlife insurance companies is currently around 5-6 per cent per annum. There is, however, no provision of return of capital to the investor, i.e., the corpus or the amount used to purchase annuity is non-returnable.|
|Whether Taxable: The pension is entirely taxable|
|Options: There are about 7-10 different pension options, including pension for lifetime for self, after death to spouse and post that the return of corpus to heirs. The corpus is not returned to the investor under any pension option.|
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