Rule 37
  Conditions for payment of pension on absorption consequent upon conversion of a Government Department into a Central Autonomous Body or a Public Sector Undertaking:—
  Sub Rule(37A)1. On conversion of a department of the Central Government into a Public Sector Undertaking or an Autonomous Body, all Government servants of that Department shall be trans­ferred en masse to that Public Sector Undertaking or Autonomous Body, as the case may be, on terms of foreign service without any deputation allowance till, such time as they get absorbed in the said undertaking or body, as the case may be, and such transferred Government servants shall be absorbed in the Public Sector Undertaking or Autonomous Body, as the case may be, with effect from such date as may be notified by the Government.
  Sub Rule(37A)2. The Central Government shall allow the transferred Govern­ment servants an option to revert back to the Government or to seek permanent absorption in the Public Sector Undertak­ing or Autonomous Body, as the case may be.
  Sub Rule(37A)3. The option referred to in sub-rule (2) shall be exercised by every transferred Government servant in such manner and within such period as may be specified by the Government.
  Sub Rule(37A)4. The permanent absorption of the Government servants as employees of the Public Sector Undertaking or Autonomous Body shall take effect from the date on which their options are accepted by the Government and on and from the date of such acceptance, such employees shall cease to be Govern­ment servants and they shall be deemed to have retired from Government service.
  Sub Rule(37A)5. Upon absorption of Government servants in the Public Sector Undertaking or Autonomous Body, the posts which they were holding in the Government before such absorption shall stand abolished.
  Sub Rule(37A)6. The employees who opt to revert to Government service shall be re-deployed through the surplus cell of the Government.
  Sub Rule(37A)7. The employees including quasi-permanent and temporary employees but excluding casual labourers, who opt for permanent absorption in the Public Sector Undertaking or Autonomous Body, shall on and from the date of absorption, be governed by the rules and regulations or bye-laws of the Public Sector Undertaking or Autonomous Body, as the case may be.
 

Sub Rule(37A)8. A permanent Government servant who has been absorbed as an employee of a Public Sector Undertaking or Autonomous
Body shall be eligible for pensionary benefits on the basis ofcombined service rendered by him in the Government and inthe Public Sector Undertaking or Autonomous Body in accor­dance with the formula for calculation of pension / family
pension under these rules as may be in force at the time of hisretirement from the Public Sector Undertaking or Autono­
mous Body, as the case may be. i[ Or at his option, to receivepro rata retirement benefits for the service rendered underthe Central Government in accordance with the orders issuedby the Central Government. ]

2[ Explanation.— The amount of pension / family pension of the absorbed employee on superannuation from Public Sector Undertaking / Autonomous Body shall be calculated in the same way as would be the case with a Central Government servant, retiring on superannuation, on the same day. ]

 

Sub Rule(37A)9. The pension of an employee under sub-rule (8) shall be calculated on the basis of his last ten months' average pay.

  Sub Rule(37A)10. In addition to pension or family pension, as the case may be, the employees shall also be eligible to Dearness Relief as per industrial Dearness Allowance pattern.
  Sub Rule(37A)11. The benefits of pension and family pension shall be available to quasi-permanent and temporary transferred Government servants after they have been confirmed in the Public Sector Undertaking or Autonomous Body.

2[ (11-A) A permanent Government servant absorbed in a Public Sector Undertaking / Autonomous Body or a temporary / quasi-permanent Government servant who has been confirmed in the Public Sector Undertaking / Autonomous Body subsequent to his absorption therein, shall be eligible to seek Voluntary Retirement after completing 10 years of qualifying service with the Government and the Autonomous Body / Public Sector Undertaking taken together, and he / she shall be eligible for pro rata pensionary benefits on the basis of combined qualifying service. ]

  Sub Rule(37A)12. The Central Government shall create a Pension Fund in the form of a Trust and the pensionary benefits of absorbed employees shall be paid out of such Pension Fund.
  Sub Rule(37A)13. The Secretary of the Administrative Ministry of the Public Sector Undertaking or Autonomous Body shall be the Chair­person of the Board of Trustees which shall include repre­sentatives of the Ministries of Finance, Personnel, Public Grievances and Pension, Labour, concerned Public Sector Undertaking or Autonomous Body and their employees and experts in the relevant field to be nominated by the Central Government.
  Sub Rule(37A)14. The procedure and the manner in which pensionary benefits are to be sanctioned and disbursed from the Pension Fund shall be determined by the Government on the recommenda­tion of the Board of Trustees.
  Sub Rule(37A)15. The Government shall discharge its pensionary liability by paying in lump sum as a one-time payment to the Pension Fund the pro rata pension or Service Gratuity and Retirement Gra­tuity for the service rendered till the date of absorption of the Government servant in the Public Sector Undertaking or Autonomous Body.
  Sub Rule(37A)16. The manner of sharing the financial liability on account of payment of pensionary benefits by the Public Sector Under­taking or Autonomous Body shall be determined by the Government.
  Sub Rule(37A)17. Lump sum amount of the pro rata pension shall be determined with reference to Commutation Table laid down in Central Civil Services (Commutation of Pension) Rules, 1981.
  Sub Rule(37A)18. The Public Sector Undertaking or Autonomous Body shall make pensionary contribution to the Pension Fund for the period of service to be rendered by the concerned employees under that undertaking or body at the rates as may be deter­mined by the Board of Trustee so that the Pension Fund shall be self-supporting.
  Sub Rule(37A)19. If, for any financial or operational reason, the Trust is unable to discharge its liabilities fully from the Pension Fund and the Public Sector Undertaking or Autonomous Body is also not in a position to meet the shortfall, the Government shall be liable to meet such expenditure and such expenditure   shall   be debited to either the Fund or to the Public Sector Undertaking or Autonomous Body, as the case may be.
  Sub Rule(37A)20. Payments of Pensionary benefits of the pensioners of a Government Department on the date of conversion of it into a Public Sector Undertaking or Autonomous Body shall con­tinue to be the responsibility of the Government and the mechanism for sharing its liabilities on this account shall be determined by the Government
  Sub Rule(37A)21. Nothing contained in sub-rules (12) to (20) shall apply in the case of conversion of the Departments of Telecom Services and Telecom Operations into Bharat Sanchar Nigam Limited, in which case the pensionary benefits including family pension shall be paid by the Government.
  Sub Rule(37A)22. For the purposes of payment of pensionary benefits including family pension referred to in sub-rule (21), the Government shall specify the arrangements and manner including the rate of pensionary contributions to be made by Bharat Sanchar Nigam Limited to the Government and the manner in which financial liabilities on this account shall be met.
  Sub Rule(37A)23. The arrangements under sub-rule (22) shall be applicable to the existing pensioners and to the employees who are deemed to have retired from the Government service for absorption in Bharat Sanchar Nigam Limited and shall not apply to the employees directly recruited by the Bharat Sanchar Nigam Limited for whom it shall devise its own pension scheme and make arrangements for funding and disbursing the pensionary benefits.
  Sub Rule(37A)24. Upon conversion of a Government department into a Public Sector Undertaking or Autonomous Body—
    • (a) the balance of Provident Fund standing at the credit of the absorbed employees on the date of their absorption in the Public Sector Undertaking or Autonomous Body shall, with the consent of such undertaking or body, be trans­ferred to the new Provident Fund Account of the employees in such undertaking or body, as the case may be;
    • (b) earned leave and half pay leave at the credit of the employees on the date of absorption shall stand trans­ferred to such undertaking or body, as the case may be;
    • (c) the dismissal or removal from service of the Public Sector Undertaking or Autonomous Body of any employee after his absorption in such undertaking or body for any subsequent misconduct shall not amount to forfeiture of the retirement benefits for the service rendered under the Government and in the event of his dismissal or removal or retrenchment, the decisions of the undertaking or body shall be subject to '[confirmation] by the Ministry Administratively concerned with the undertaking or body.
  Sub Rule(37A)25. In case the Government disinvests its equity in any Public Sector Undertaking or Autonomous Body to the extent of fifty-one per cent or more, it shall specify adequate safeguards for protecting the interests of the absorbed employees of such Public Sector Undertaking or Autonomous Body.
  Sub Rule(37A)26. The safeguards specified under sub-rule (25) shall include option for voluntary retirement or continued service in the undertaking or body, as the case may be, or voluntary retire­ment benefits on terms applicable to Government employees or employees of the Public Sector Undertaking or Autono­mous Body as per option of the employees, assured payment of earned pensionary benefits with relaxation in period of qualifying service, as may be decided by the Government.
 

GOVERNMENT OF INDIA'S DECISIONS

(1) Clarification to Rule 37-A of CCS (Pension) Rules.— Sub-rule (9)of Rule 37-A of CCS (Pension) Rules provides that the pension of anemployee under sub-rule (8) shall be calculated on the basis of his last 10months' average pay. References have been received by this Departmentseeking clarification as to whether the pay of an employee in PSU in the IDAscale should be taken into consideration for calculating average emolumentsunder sub-rule (9). It is hereby clarified that for the calculation of pensionarybenefits under sub-rule (9) of Rule 37-A, average emoluments will becalculated on the basis of pay drawn by the absorbed employee during the last10 months in the PSU prior to retirement and wherever the absorbedemployee is drawing pay in IDA scale during this period, his pay in IDA scalewill be taken into account for calculation of average emoluments. In addition to the pension or family pension, as the case may be, such absorbed employeeshall also be eligible to receive clearness relief as per Industrial DA pattern asper the provisions of sub-rule (10) of Rule 37-A.[ G.I., Dept. of P. & P.W., O.M. No, 4/61/99-P & PW (D), dated the 20th December, 2002. ]

(2) Payment of Pension / Family Pension to the employees absorbed from DOT/DTS/DTO in Bharat Sanchar Nigam Limited with effect from
1-10-2000.—
On introduction of IDA pay scale by the BSNL vide their Office Order No. BSNL/26/SR/2002, dated 7-8-2002 with effect from 1-10-2000 in replacement of existing CDA pay scale for non-executive staff (Groups 'C &'D') absorbed from DOT/DTS/DTO in Bharat Sanchar Nigam Limited with effect from 1-10-2000, references have been received from various DOT units seeking clarifications for the payment of Pension and Family Pension either on CDA pay scale or IDA pay scale. As such, doubts raised by various DOT units are clarified as under.

Doubt 1:—When pay during last 10 months falls partly in CDA pay scales and partly in IDA pay scales, how average emoluments are to be taken for calculating the pension. Nothing is mentioned whether non-practising allowance granted to Medical Officer in lieu of private practice will also be treated as pay. In addition, nothing is mentioned about the stagnation increment whether the same will be treated as pay for calculation of retirement benefits.

Clarification.— Sub-rule (9) of Rule 37-A of CCS (Pension) Rules provides that pension of an employee be calculated on the basis of his last 10 months' average pay. It is implied that for the purpose of calculation of pension, average of last 10 months' pay in all the 10 months or part thereof is in IDA/CDA pay scale. Non-practising allowance and the stagnation incre­ment are to be treated as emoluments for calculation of retirement benefits as per Rule 33 of CCS (Pension) Rules and the explanation below Rule 33.

Doubt 2.— In case of absorbed employee retired between 1-10-2000 and 30-6-2001, the pay falls in both the CDA and IDA within ten months, what will be relief admissible whether part of CDA or part of IDA or industrial relief on the pension calculated?
Clarification:— Once pension / family pension is determined in accor­dance with sub-rule (9) of Rule 37-A of CCS (Pension) Rules, the employee shall also be eligible to Dearness Relief as per Industrial Dearness Allowance pattern as provided in sub-rule (10) of Rule 37-A.

Doubt 3.— What will be the emoluments for determining the retirement Gratuity / Death Gratuity on IDA pay scales?
Clarification:— As per Rule 50 (5) of CCS (Pension) Rules, the emolu­ments for the purpose of Gratuity admissible shall be reckoned in accordance with Rule 33, provided that if the emoluments of the Government servant have been reduced during the last 10 months of his service, otherwise than as a penalty, average emoluments as referred to in Rule 34 shall be treated as emoluments.

Doubt 4.— Whether the minimum pension of Rs. 1,275 p.m. as well as maximum pension of Rs. 15,000 p.m. (i.e., 50% of average emoluments in all cases) as applicable in the CDA pay scale is also to be applicable in IDA pay scales?
Clarification:— The ceiling minimum and maximum pension as existing in CCS (Pension) Rules shall continue unless specifically approved otherwise by the Government.

Doubt 5.— Whether commutation of pension as applicable at 40% (maximum) on CDA pay scale is also to be applicable in IDA pay scale?

Doubt 6.— There may be cases where the employee(s) expired on or after 1-10-2000 but before the issue of instructions for opting for BSNL and could not exercise his/her option. How these cases are to be settled?
Clarification:— This is not a pension-related issue. BSNL management with the approval of competent authority has to decide about admissibility of IDA pay scales to such employees. Calculation of pension follows accordingly.
While determining the pensionary benefits and retirement benefits on IDA pay scale, CCS (Pension) Rules, 1972 (as amended from time to time) should invariably be consulted and if still there is any doubt, only then reference may be made by quoting the problem and correct rule number of the CCS (Pension) Rules and the need for clarification.
This issues with the approval of Member (Services) & Member (Finance), Telecom Commission.
[ G.I., Dept. of Telecom. O.M. No. 40-13/2002-PEN. (T), dated the 15th January, 2003. ]