Bringing cheers to almost 43,000 existing and retired employees of the public sector insurance companies, the center has at long last decided to allow one more opportunity to employees of Public Sector Insurance Companies (PSICs) who joined on or before 28th June 1995, to opt for pension, as a retirement benefit.
This decision announcedon Saturday is expected to benefit 42,720 employees (serving and retired) of which 24,595 are of Life Insurance Corporation (LIC) and 18,125 of Public Sector General Insurance Insurance Companies(PSGICs), said Arun Jaitley,union finance minister.
“Government approves one more pension option for left over employees of public sector insurance companies who joined on or before 28 June, 1995. It would benefit 42,720 employees including 10,720 senior citizens,’’ Jaitley tweeted on Saturday evening.
Asia Insurance Post on Oct 7 2018 had reported (http://www.asiainsurancepost.com/non_life-news/govt-create-talent-pool-may-allow-second-option-pension-psu-general-insurance-cos) that Jaitley in his address to the senior officials of the general insurnace companies, had indicated that the government is favourably disposed towards the deamnds of the employees of the PSU insurance companies for allowing a second pension option for them.
For the first time, pension was introduced as a retirement benefit in PSICs with effect from 28th June 1995.
In April 1997, employees of LIC and Public Sector General Insurance Companies namely, GIC Re, National Insurance Company(NIC), Oriental Insurance Company(OIC), United India Inurance (UIIC) and New India Insurance (NIA), who joined service on or before 28th June 1995 were given another opportunity to opt for Pension, as a retirement benefit.
However, many eligible employees could not exercise the option and there has been a long standing demand from them to be given another option.
In order 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 PSICs who joined service on or before 28th June 1995, to opt for the pension scheme of their respective organizations, in lieu of Contributory Provident Fund, said a release by the Ministry of Finance(MoF).
Normally, for any serving employee, a pension kitty is accumulated over the years, with the contributions from both-employees and organisations. However, it is yet to be known how the pension for the retired employees of the PSU insurance companies, who have not contributed anything for their pension kitty during their working period, will be structured.
“May be, they will be asked to pay certain amount, calculated retrospectively, now and the organisations will also contribute their share retrspectively to create pension kitty for the retired employees,'' said industry sources.