POWERGRID Employees Defined

Contribution Superannuation
Benefit (Pension) Scheme
&
Post Retirement Medical Benefit
Scheme
POWERGRID Pension Scheme
Post Retirement Medical Benefit Scheme
POWERGRID Employees Defined
Contribution Superannuation
Benefit (Pension) Scheme
Background
Applicability & Beneficiary
Contribution
Administration of the Scheme
Benefit
General
Accounts
Pension Payment
 Background
POWERGRID Self Contributory Supperannuation
Benefit (Pension) Scheme (A Defined benefit
scheme) was in operation w.e.f. 01.04.1995.

Restructured from Defined Benefit to Defined

Contribution w.e.f. 01.10.2004.

Modified w.e.f. 01.01.2007 as POWERGRID

Employees Defined Contribution Supperannuation
Benefit (Pension) Scheme
 Contributions
(i) Members Contribution: 3% of Basic Pay (including
stagnation increments) plus Dearness Allowance. A
member may also contribute any additional amount as
voluntary contribution to the superannuation fund.

(ii) Corporations Contribution: Contribution made by the

Corporation within a ceiling of 30% of employees
salary after discounting for PF, Gratuity, PRMB (Post
Retirement Medical Benefit) and any other retirement
benefit, to the Superannuation Fund
 ADMINISTRATION OF THE SCHEME

The number of Trustees shall be 11 (Eleven)

including the Chairman

- 5 Nominees of the Management

- 4 Nominees of Workmen
- 1 Nominee from the Supervisory Category
- 1 Nominee from the Executive Category
 Benefits
In case of superannuation:

Employee who superannuates from the company and

has completed 15 years of service in POWERGRID
(including services in other CPSE).

The total accumulated amount to the credit of the

employee will be used for purchase of pension annuity
from approved pension provider.

Employee can commute upto 1/3rd of their cost of

annuity.
 Benefits (Contd)

In case of Death / Total Permanent

Disablement:

The total accumulated amount to the credit of

the employee will be used for purchase of
pension annuity, irrespective of the eligibility
criteria of completion of 15 years and payment
of commutation as per rules.
 Benefits (Contd)

In case of Resignation :
(i) Resigns from service and joins another CPSE
where similar scheme exists:

The entire amount of corporations contribution and

members contribution along with interest accrued
thereon shall be transferred to such CPSE, provided the
CPSE agrees to accept the fund transfer and the
request for transfer through proper channel.
 Benefits (Contd)
(ii) Resigns from service & joins another CPSE where
similar scheme does not exist or joins any organization
which is not a CPSE
The member will get the accumulated amount available in
his/her account under the head Members Contribution
only along with accrued interest as on the date of his
resignation.

The Corporations contribution from 01.01.2007 on the

members account will be transferred to the Forfeiture
account (being maintained in POWERGRID) which will be
adjusted in the subsequent corporations contribution
 General

Joining from other CPSE

Employees joining POWERGRID from other CPSE

having similar pension scheme shall have the
option of transferring their corpus to
POWERGRIDs Pension fund.
 General
EMPLOYEES ON DEPUTATION

The employee shall make the contribution as per

the notified percentage of his salary laid down
from time to time along with additional amount if
any, to the fund and employers contribution will
be made by the borrowing organization (or
alternatively by the employee himself).
 General

EMPLOYEE KEEPING LIEN ON THE SERVICE

OF POWERGRID
POWERGRID Executives and Functional Directors
appointed to senior and top level posts through Govt.
order or presidential order in other PSU/Govt.
Deptt./Authority/Board keeping lien on the fund, may
be permitted to continue as the member of the scheme
provided that the laid down contributions in respect of
such Executive/Functional Director is contributed to the
fund.
 Accounts
Each member has an individual pension account and an
unique pension Account Number.

The amount contributed by each employee is credited

to the existing individual pension account under the
head Members contribution

The contribution made by the Corporation is credited to

the existing individual pension account under the head
Corporations contribution.
Pension Payments on DC principle

The benefit under this scheme will be the total

accumulated amount on account of employees
contribution and Corporations contribution only

Pension annuity will be purchased out of the

accumulated amount in the individual pension
account.

Quantum of pension will be determined based on

prevailing rate of annuity.
 Critical Issue :

Apportion of enhanced amount of gratuity

Pay revision of executive was implemented as per DPE
guidelines for executives dated 26.11.2008 implemented in
October 2009 and for non-Executive in October 2010.

Whether Gratuity liability due to increase in ceiling from

3.5 Lakhs to 10.0 Lakhs pertaining to the services
rendered before 01.01.2007 to be considered or excluded
for working out the Corporations contribution on Pension
within 30% of Superannuation benefit?
 Critical Issue :

Provision of DPE Proposed provision of

guidelines Pension Scheme
DPE guidelines provide for This benefit can be
superannuation benefits to extended to those
employees who employees who resigns from
superannuate from the the CPSE and put in a
CPSE and have put in 15 minimum of 15 years of
years of service as on the service.
date of superannuation.
Post Retirement Medical Benefit Scheme
Commencement and Eligibility:

Commencement:
The Policy was adopted in POWERGRID since its
inception.
Eligibility:
Employee who superannuate from the company or
separated on medical ground
Completed minimum period of 10 years of
continuous service in Central Govt./State Govt./PSU.
Minimum 3 years of service in POWERGRID
 Eligibility (Contd.)

Board level appointees, on completion of their tenure

or on separation on medical ground

POWERGRID Executives and Functional Directors,

appointed to senior posts in other PSU/Govt.
Dept/Authority/Board/ etc. through Govt./ Presidential
orders on their retirement or on attainment of age of
superannuation or on completion of tenure of
appointment or on separation on medical ground.

Provided they exercise their option for coverage under

the POWERGRID Scheme.
Coverage & Benefits

Coverage: Employee and Spouse

Benefits:
(i) Indoor treatment: Reimbursement of
medical expenses incurred on indoor
treatment
(ii) Outdoor treatment: As in case of regular
employees, subject to annual ceiling of
maximum of pay scale of a serving employee
of equivalent status/rank
Contribution:

One time contribution as follows:

Executives : 7200/-
Supervisor : 6000/-
Workmen : 5000/-
Amount disbursed in previous years

Post Retirement Medical Benefit : Given below

Year Amount (in Cr.)

2007-08 5.42
2008-09 13.27
2009-10 8.72
2010-11 29.07
2011-12 4.97
Gratuity liability due to change in ceiling from 3.5
to 10 lakhs should not be part of 30% of
superannuation benefit, the reasons are :

Gratuity as per revised ceiling is for the period of

service rendered for earlier years

30% superannuation benefit is calculated on

the revised pay w.e.f 01-01-2007 and accrual of
gratuity is 15 days for each completed year of
service so the gratuity contribution should not
exceed in any case for 15 days of salary for each
year
 If an employee retired on 31-Jan-2007 , he will get
the Gratuity of 10 Lakhs by contributing a small
amount whereas other employee who is retiring
on 31-03-2011 has to borne a huge amount to get
Rs.10 lakhs of Gratuity (Not at par with the
employee retired on 31-Jan-2007)

The employee who joins the company in Jan

2007 has to borne the burden of gratuity liability
for the period which is not pertaining to him

How an employee can contribute beyond the

limit of 30% of salary on account of single head
i.e. Gratuity only (Due to increase in ceiling) and
which is also not sufficient to meet the liability of
Gratuity in a single year.
Case 1: When Addl. Gratuity (due to increase in ceiling ) is not the part of 30%.

Supan
benefit Less Less Net for % of
BASIC DA Total @ 30% Less PF gratu. PRMB Pension Pension
FY0607-3M 70.00 0.00 70.00 21.00 8.40 2.00 1.50 9.10 13.00%
FY0708-12M 300.00 9.00 309.00 92.70 37.08 11.00 5.00 39.62 12.82%
FY0809-12M 310.00 35.00 345.00 103.50 41.40 12.00 13.00 37.10 10.75%
FY0910-12 M 340.00 77.00 417.00 125.10 50.04 22.00 15.00 38.06 9.13%
FY1011-12 M 350.00 147.00 497.00 149.10 59.64 24.00 16.00 49.46 9.95%
FY1112- 12 M 360.00 170.00 530.00 159.00 63.60 25.00 18.00 52.40 9.89%
Total 1730.00 438.00 2168.00 650.40 260.16 96.00 68.50 225.74

Note : Addl. Gratuity of Rs.90 Crore not adjusted from 30% superannuation benefits
Case 2 : When Addl. Gratuity (due to increase in ceiling) is part of 30% and provided
in the Year 2006-07

Superan Net -
benefit Less Less for % of
BASIC DA Total @ 30% Less PF gratu. PRMB Pensn Pension
-
FY0607-3M 70.00 0.00 70.00 21.00 8.40 92.00 1.50 -80.90 115.57%
FY0708-12M 300.00 9.00 309.00 92.70 37.08 11.00 5.00 39.62 12.82%
FY0809-12M 310.00 35.00 345.00 103.50 41.40 12.00 13.00 37.10 10.75%
FY0910-12 M 340.00 77.00 417.00 125.10 50.04 22.00 15.00 38.06 9.13%
FY1011-12 M 350.00 147.00 497.00 149.10 59.64 24.00 16.00 49.46 9.95%
FY1112- 12 M 360.00 170.00 530.00 159.00 63.60 25.00 18.00 52.40 9.89%
Total 1730.00438.002168.00 650.40 260.16 186.00 68.50 135.74
Note : Addl. Gratuity provided in the Fin year 2006-07 Rs.90 Crore
Case 3 : When Addl. Gratuity (due to increase in ceiling) is part of 30% and provided in
the year of pay revision

Supan Net -
benefit Less Less Less for % of
BASIC DA Total @ 30% PF gratu. PRMB Pensn Pension
FY0607-3M 70.00 0.00 70.00 21.00 8.40 2.00 1.50 9.10 13.00%
FY0708-12M 300.00 9.00 309.00 92.70 37.08 11.00 5.00 39.62 12.82%
FY0809-12M 310.00 35.00 345.00 103.50 41.40 12.00 13.00 37.10 10.75%
FY0910-12 M 340.00 77.00 417.00 125.10 50.04 67.00 15.00 -6.94 -1.66%
FY1011-12 M 350.00 147.00 497.00 149.10 59.64 69.00 16.00 4.46 0.90%
FY1112- 12 M 360.00 170.00 530.00 159.00 63.60 25.00 18.00 52.40 9.89%
Total 1730.00 438.00 2168.00 650.40 260.16 186.00 68.50 135.74
Note : Addl. Gratuity provided in the Fin year 2009-10 Rs. 45 Crore and in the Fin Year
2011-12 Rs.45 Crore
 Forfeiture Account
The account heading of the account (to be maintained
in POWERGRID) in which such amount of Corporations
contribution from 01.01.2007 on the members
account will be transferred to:
(i) If the employee resigns from the company joins
another CPSE not having a similar pension fund or
any organization not being a CPSE.
(ii) In case of Dismissal / removal from service of the
corporation and/or otherwise lost his lien on his
employment