Serving, retired staff of government insurers to benefit from pension scheme

CHENNAI: Retired and serving employees of government-owned insurance companies are happy at the Centre’s decision to offer another chance to opt for pension scheme.

“I am happy with the development. With the interest rates on bank deposits sliding down, getting a steady pension income is good. I am going to opt for pension,” said Y. Sivam, a retired employee of National Insurance Company Ltd.

A serving employee in the same company said: “Earlier I didn’t opt for the pension scheme as the situation was different. But now the circumstances have changed. And I am going to retire in a couple of years down the line, it is better to have pension.”

According to the employee, the amount that a retired employee has to refund as the company’s share of provident fund can be recovered through monthly pension in couple of years’ time.

Sivam, who was a union leader while in service, said: “The scheme has to be employer-friendly per say if the buzz word ‘social security scheme’ is true. It is true, many could not opt in the first place owing to reasons, such as appreciable interest on deposits.”

According to Sivam, as the insurers have told the government that they would absorb the additional cost, those who are going to opt now should not be subjected to additional woes.

He said, the inclusion of new members also helps in making the pension scheme viable.

According to him, the National Pension Scheme (NPS) that is applicable for some sections of the employees should be scrapped and they should be enrolled under the old pension scheme.

Employees who have joined the public sector general insurers after April 1, 2010 come under the NPS while all those who joined prior to that will be under the old pension scheme.

On a poll year, the welfare measure is expected to benefit 42,720 employees (serving and retired) of which 24,595 are of Life Insurance Corporation of India (LIC) and 18,125 of public sector general insurers.

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The Central government recently decided to allow one more opportunity to employees of government-owned general insurers who had joined on or before June 28, 1995, to opt for pension as retirement benefit.

In April 1997, employees of LIC and public sector general insurance companies — General Insurance Corporation of India, National Insurance, Oriental Insurance Company and New India Assurance Company — who joined service on or before June 28, 1995, were given another opportunity to opt for pension, as a retirement benefit.

The scheme was introduced after the insurers had hired a large number of freshers in 1990.

But, many eligible employees could not exercise the option and there has been a long pending demand from them to be given another option.

In order measure to mitigate the hardship of such employees of whom many have retired, government has decided as a welfare measure, to allow one more opportunity to employees of general insurers to opt for pension scheme in lieu of contributory provident fund.

The pension option is not available for those who had resigned from the company, said an official of an public sector insurance company.