Employees with minimum service of 25 years to get Pension, Retirement Age may be increased
The Himachal Pradesh state government is considering raising the minimum service period required for employees to receive a pension to 25 years. This recommendation comes from the Cabinet Sub-committee on Resource Mobilisation, led by Deputy Chief Minister Mukesh Agnihotri. The state Cabinet will review this recommendation and discuss whether to amend the pension rules in its upcoming meeting.
The reason behind this proposed change is the rising pension liabilities following the restoration of the old pension scheme (OPS). The state government is currently facing financial challenges and is not in a position to handle the additional costs associated with this increase in pension obligations.
What the Change Means for Employees
Currently, state government employees who have completed at least 10 years of service are eligible for pension benefits. If the government decides to increase the required service period to 25 years, many employees could lose out on pension benefits under both the old pension scheme (OPS) and the new pension scheme (NPS). This would impact those who have served between 10 and 25 years, as they would not meet the new requirements.
Other Proposed Changes to Employee Benefits
Alongside the pension service period extension, another proposal up for discussion is raising the retirement age for employees from 58 years to 59 years. This decision is expected to be reviewed at the Cabinet meeting, along with an evaluation of its effects on the state’s unemployed youth. In the past, the government led by Virbhadra Singh also raised the retirement age by one year, in an effort to delay retirement benefits payments.
Financial Strain and Debt Concerns
The state’s financial health has become a key concern, especially as the state’s debt has now surpassed Rs 1 lakh crore. The Cabinet Sub-committee has recommended that, given the financial strain, the government will need to carefully decide which policies are feasible to implement without further stressing the state’s finances.
Recommendations for Pension Reforms
The Cabinet Sub-committee has also suggested that employees should no longer be allowed to take a commutation of pension upon retirement. Currently, employees who retire can withdraw 40% of their total pension amount in a lump sum. Stopping this practice would require an amendment to the Pension Rules. Although the state government has the authority to make such a change, it is likely that employees will challenge the decision in court.
Additionally, the sub-committee has recommended increasing the time period for employees to qualify for full pension from 20 years to 25 years. Employees who have worked less than 25 years will still receive pension benefits, but these will be calculated based on their actual service period.
Conclusion
These proposed changes to pension rules reflect the state government’s effort to address its financial challenges. However, they also raise significant concerns among employees who may be adversely affected. The Cabinet’s decisions in the upcoming meeting will play a crucial role in shaping the future of pension benefits for government workers.
