Retirement Age in India for State Government Employees

As per a World Bank data analysis, India’s retirement age is one of the lowest. There have been amendments since the establishment of our Constitution to make the state government employees’ retirement age higher. Still, an average retirement age of 60 years is lower than in most countries. There has been quite a buzz in regard to increasing the retirement age of government employees in various states. 

Let’s look at the current scenario and the pension benefits offered to state government employees.

Here are the benefits a state government employee is entitled to receive on their retirement: 

• Pension: State Government employees are eligible for pension only if they complete a minimum of 10 years of service. The maximum pension can be 50% of the highest salary received. The minimum monthly pension is ₹9000 per month.
• Commutation of Pension: Any Government employee can move 40% of his pension into a lump sum amount for other purposes. No medical examination is required if the amount is moved within one year of retirement. 
• Retirement Gratuity: To receive this lump sum benefit, a retiree has to be a government servant for a minimum of 5 years. This amount is equal to the amount of 1/4th of a month’s Basic Pay with Dearness Allowance last drawn for 6 monthly periods of qualifying services completed. This amount can be a maximum of ₹20 lakhs.
• Death Gratuity: Nominee or dependant of a government employee dying in harness receives this lump sum amount. The maximum allowed amount of death gratuity is ₹20 lakhs. There is no minimum service period to be eligible for this benefit.

• Service Gratuity: A government employee whose employment period is less than 10 years is entitled to receive a service gratuity. This amount equals the Basic Pay & Dearness Allowance last drawn for 6 monthly periods of qualifying services completed. 
• Issue of No Demand Certificate: If there is any due left by a retiring employee on account of Licence Fee regarding accommodation, advance, overpayment of pay and allowances, the Head of Office needs to inform the Accounts Officer two months before retirement so that these could be adjusted with the gratuity amount. If, due to any reason, dues cannot be assessed by retirement, 10% of gratuity is withheld based on a commutation from the Directorate of Estates. 
• General Provident Fund and Incentives: According to General Provident Fund Rules, all temporary and permanent government employees, as well as all re-employed pensioners, are eligible to subscribe to this fund. However, govt. Employees who joined services after January 01, 2004, do not qualify for this fund.
• Deposit Linked Insurance Scheme: As per the rules of the General Provident Fund, upon death of an endorser, the individual is eligible to receive the amount gathered in the account along with an additional amount. The additional amount should be equal to the average balance in the account throughout the 3 years approximately preceding the death of the endorser and should not exceed the maximum limit of ₹60,000.
• Leave Encashment: Encashment of earned leave or half-pay leave is available at the time of retirement. It is permitted with a maximum limit of up to 300 days. 

Even if there is variety in the state government employees’ retirement age, it is ensured that they all get similar benefits upon retiring. State government employees should stay updated about the latest news on retirement age as this will help them plan their retirement funds efficiently.