A Study on Study on Terminal Benefits of the Central Government Employees

Long Term Measures for Achieving Reduction in the Liability of the Government towards Terminal Benefits of Central Government Employees.

Aim of the study:

The  study, in the light of the existing scheme of retirement benefits of Central Government Employees, including All India Services, Armed Forces personnel and employees of UTs, appointed before 1.1.2004, will make an assessment of the existing and future liability of the Government towards these benefits in the next three to four decades keeping in view the age profile of the workforce and suggest effective ways and means of reducing the budgetary liability on this account.  Towards this aim, suitable changes in the existing scheme of terminal benefits could also be suggested.

The Terms of reference of study:

• To analyse the expenditure presently being incurred by Government, under the existing scheme of retirement benefits available to Central Government Employees under consideration, make projections thereon and suggest ways to meet this liability.
• To see the age profile of existing government employees as had joined before 1.1.2004 and to assess the liability likely to arise towards their terminal benefits in the next three to four decades.

• To suggest various options for suitable self sustaining models to finance the pensions of Central Government employees with the final objective that the funds so devised are able to meet substantially the entire pension liability of the Government. 

• To assess the financial liability that will need to be initially incurred by the government for implementation of such self sustaining models.

The study is being conducted by the Institute for Social and Economic Change, Bangalore and is expected to be completed within a period of 7 months by September 2007.

Team Leader Contact Details:
Dr. K. Gayithri,
Centre for Economic Studies and Policy,
Institute for Social and Economic Change. Nagarbhavi PO Bangalore – 560072
Tel No. 080 23217010
E mail : gayithri@isec.ac.in

Methodology:

The Study proposes a projection of terminal benefits related expenditure and some other options which will be considered after interaction with the stakeholders.

Existing staff details of each category along with their age profile and the terminal benefits, based on its availability, will be collected and used for making estimations for the future.  Existing data/projections currently available would be examined and attempts would be made to adopt better methodology. The impact of demographic transition in terms of increasing life expectancy would be meaningfully captured in the study.  The study would use appropriate econometric tools that take into account all possible changes while making the estimates.