MoD Seeks Separate PF Dispensation For Services

New Delhi, May 25: | Updated: May 26 2002, 05:30am hrs
The ministry of defence (MoD) has sought a separate contributory provident fund (PF) dispensation for the Services on the plea that entirely different retirement patterns prevail among defence personnel.

The department of pensions proposes to forward to the department of revenue this demand, along with the major recommendations of the high-level group set up to examine pension reforms for central government employees. “Revenue has to appreciate and take a view” on the proposals, since they have certain financial implications for the government.

Only when the revenue department indicates that these are financially viable can there be any further progress in the matter, government sources told The Financial Express.

Finance minister Yashwant Sinha has announced that from June 1, the proposed contributory provident fund scheme for new recruits coming into government service would be announced and implemented”. However, it is highly unlikely that the deadline would be met, they felt.

According to MoD, the rate of attrition reckoned for assessing the pensionary liability was only 2.5 per cent unlike 5 per cent for civil departments.

The ministry had explained in its note to the working group on “Assessment of Pensionary Liability of the Government of India” that it was owing to the fact that the personnel below officer rank — who constitute approximately 55 per cent of the total number of pensioners, retire much earlier than the normal age of retirement, mostly after rendering qualifying service of 15 years to 32 years only as per the terms of their engagement”. Accordingly, the payment of pension would begin much earlier.

The accumulated fund would entail a higher fund in that case, but that would mean higher contributions during the service years.