new pension scheme ( nps )

1. new pension scheme (nps) Presentation by BPCL

2. DPE GUIDELINES ON SUPERANNUATION (RETIREMENT )BENEFIT • DPE guidelines dated 26.11.2008 & 2.4.2009 relating to pay revision of Board level & below Board Executives provide for: • CPSEs allowed to provide for 30% of Basic + DA as Superannuation benefits, which would include Contributory P.F., Gratuity, Pension & Post Superannuation Medical Benefits. • The pension benefit to be under a ‘Defined Contribution Scheme’ (DCS). • CPSEs to make their own schemes to manage this Fund or operate through Insurance Companies on fixed contribution basis

3. DPE GUIDELINES ON SUPERANNUATION (RETIREMENT )BENEFIT • The Superannuation benefits to be based on the contributions + returns thereon. • The Pension and Medical benefits to be extended to Executives who superannuate from the CPSE and have put in a minimum of 15 yrs. service in the CPSE prior to superannuation. • No other superannuation benefit can be granted outside the ceiling of 30% of Basic + DA.

4. INTRODUCTION OF NEW PENSION SCHEME (NPS) • Effective 1.1.2007, New Pension Scheme will be operated as a ‘Defined Contribution Scheme’ in line with DPE guidelines & all employees on roll as on date will be covered. All new employees would become members of only NPS. • An account for each employee will be opened from 1.1.2007 or from the date of joining the services of the Corporation. • Company’s contribution to NPS will come out of 30% of BP + DA after adjusting contributions made against PF ,Gratuity ,PRMB. All the outgo except for PF will depend on actuarial valuation and only residual portion will go to NPS as contribution towards Pension benefit. • Acturial valuation will determine percentage of Gratuity/PRMB forming part of 30% BP +DA. Balance contribution after adjusting 12% on account PF will go to NPS . • The contribution percentage to NPS works out to approximately 12.5% ( indicative) for the period 1.1.2007 to 31.3.2011. Final percentage will emerge after signing of LTS, when the revised salaries will be known.

5. INTRODUCTION OF NEW PENSION SCHEME (NPS) Contd… • NPS is managed by the existing Superannuation Trust. • Employees would be permitted to voluntarily contribute to NPS. • The Trust would make investment of the funds with the Service Providers like LIC/SBI Life/HDFC Life / ICICI Prudential , etc.

6. BENEFIT UNDER NEW PENSION SCHEME (NPS) • Employees retired with 15 years of service or more are eligible for Pension under NPS. Immediate past service with CPSE will be considered provided NPS contribution is transferred to BPCL. Service with Govt not to be considered. • In respect of Death in service and Permanent Total Disablement the pension based on the accumulations is paid irrespective of no of years of service immediately in the following month of happening such event ( As per the clarificatiopn issued by DPE to MMTC dt. 30.8.11) • In r/o Resigned cases, contribution under NPS is transferable to other CPSEs provided they have similar NPS and the application is routed through proper channel. However, the accumulations will be transferred to other CPSE only at NDR of the employee. If employee joins any other company other than CPSE, only employees own contribution will be returned alongwith interest.

7. BENEFITS UNDER NPS • Staff to choose from one of the following 4 options : I Guaranteed for 15 years or lifetime of member, whichever is later II Lifetime of member with return of capital III Joint lifetime of member and spouse (not available in KR ) IV Joint lifetime of member and spouse with return of capital (not available in KR ) • 1/3rd of Pension payable can be commuted . Commuted amount not taxable • ROC and monthly benefit received is taxable

8. BENEFIT UNDER NEW PENSION SCHEME (NPS) Contd… • In case of employees who separate arising out of disciplinary proceedings, no company’s contribution is returned. However, own contribuition alongwith interest will be returned

9. Seek clarification on Contd… • whether 14.5 years and above service can be treated as 15 years service • Whether 15 years clause can be waived off if opt for PFRDA scheme. • If no, whether DPE would facilitate introduction of NPS scheme thru PFRDA considering 15 years service clause for eligibilty of pension

10. POST RETIREMENT MEDICAL BENEFIT SCHEME( prmbs)

11. Preamble • The PRMBS costs is met out of the portion earmarked for this purpose under 30% of the retirement benefits, as per the extant Government guidelines on the subject

12. Applicability • Employees retired/ demised on or after 24.1.1976 are covered under the Scheme. • Employees resigned with 25 years of service are also eligible • Benefit varies depending on the cadre. • For Officers again the benefit varies based on the Job group • Currently 2530 separated Officers and 5962 workmen are covered under the scheme

13. Schemes & Coverage • One time contribution on joining PRMBS • Management –Rs. 25,000 • Workmen - Rs.10,000 • Domiciliary treatement limits for block of 2 years are as under and the • rates are as applicable to regular employees: • Management – Rs. 80,000 • Workmen - Rs.36,000 • Hospitaliation expenses are at actuals based on the rates applicable at • the time of retirement

14. General: • The medical reimbursements of eligible dependent parents, for all cadres of separated employees, is restricted to 90% of the amount which is reimbursable, for both domiciliary and Hospitalisation expenses. • Any changes to the scheme on the above principle for the serving employees are made applicable to separated employees as well. •  The cost of PRMBS benefit works out to approx. 3% of BP +SI and is accounted under 30% of BP+DA Superannuation Benefit

15. THANK YOU