Leave Salary & Pensionary Contribution – Amendment


Recommendations of the 9 th PRC certain orders were given  regarding the payment of Leave salary and Pension contribution which is as follows:

Existing Para 2 (ix) to be deleted Revised Para 2 (ix) to be inserted.
(ix)Leave salary and Pension Contribution;

The foreign employer shall pay to Government Leave Salary and Pension contribution at the following rates:

(1) Rate of Leave salary contribution:

11% of the pay drawn in Foreign service, if governed by Leave Rules in Fundamental Rules  or  Hyderabad Leave Rules, 1357 Fasli (1947)

Or

11%   of   pay   drawn   in   Foreign

Service, if governed by A.P. leave rules, 1933   or   Hyderabad   Revised   Leave rules, 1952

(2) Rate of Pension contribution;

% of the maximum monthly Pay of the grade held by the Govt. servant in government service.

Note: the appropriate rate applicable according to the Table of the rates in Fundamental   Rules   116   which   are based on length of Service should be specified.

The above rates are only provisional subject to revision by the Accountant General/Pay and Accounts Officer, Hyderabad, as the case may be.   The Foreign employer should remit to the Accountant General, Andhra Pradesh, Hyderabad, the amounts of the above contributions every month by way of demand drafts, the necessary charges

(ix)Leave Salary and Pension

contribution.

(a) While accepting the proposal of the deputation, the competent authority should include in the order of deputation a specific clause regarding the recovery of Leave Salary and Pension contribution and shall mention the exceptional circumstances under which the Government feels that recovery of Leave salary and Pension Contribution is warranted.  If specific clause is not mentioned in the deputation order, it would be presumed that such a recovery is waived.

(b) Verification regarding recovery of Pension contribution shall be waived in respect  of  all  pension  cases  presently under consideration and also the future cases, if the officers worked on deputation in the establishments such as Public sector Undertakings which are wholly owned or controlled by State Government or to any State   government   company   where   the State Government has a major share, or to any  Local  Body  or  University  or  to  any Aided Institution which is under the control of the state Government, even though their original deputation orders stipulated recovery of Leave Salary and Pension contribution.

(c)      even in respect  of  State Government Companies, where there is no Grant in aid, since the Government has a major share, it should be treated as an extension   of   Government   service   and

for which should be borne  by the Foreign employer. contribution shall be waived.  In respect of deputation of officers from one grant-in-aid institution to another grant-in-aid institution, the leave salary and Pensionary contributions shall also be waived, as in the final analysis, the expenditure is met by the Govt.   In cases where officers from grant- in-aid institutions are deputed to work in govt. or in Quasi Govt. organizations these contributions shall be waived on the same analogy.

While issuing the said orders the entire para 2 (ix) was deleted by incorporation of the recommendations of the PRC 2009, because of which the quantum of the amount payable by the foreign employer as Leave Salary and Pension Contribution was also deleted.  Consequently the rates at which Leave Salary and Pension Contribution are to be paid, in cases where they are not exempted, are not provided for in the said orders.  Further, as per the orders in the said G.O., if  a clause is not mentioned in the orders of deputation regarding Leave Salary  & Pension Contribution to be paid by the borrower,  the same is not to   be recovered from the borrowing institution/Department.   Many lending departments being unaware of the above clause and G.O.  are still following only G.O.  Ms.  No.  10,  Finance,  dt.  22-1-1993,  and  not  mentioning  the  clause regarding recovery of Leave Salary and Pension Contribution  in the deputation orders,  even    where  the  two  components  are  to  be  paid  Consequently,  by default, Government is losing the two contributions.

In view of the above position,  and after careful examination of the issue, it is decided by the government   to issue an amendment to G.O.Ms. No. 160, Finance (FR.II) Dept., dated    7-5-2010,  as follows:

 

AMENDMENT

 

(A)  In the table given under para 5 of the said G.O. in place of Revised

Para 2 (ix)  the following is to be replaced.

Existing para 2 (ix) as per G.O. Ms. No.

 

160, Fin. (FR.II) Dept., dt. 7-5-2010

Newly inserted para 2 (ix)
(ix)  Leave  Salary  and  Pension

contribution.

(a) While accepting the proposal of the deputation, the competent authority should  include  in  the  order  of deputation a specific clause regarding the recovery of Leave Salary and Pension contribution and shall mention the exceptional circumstances under which the Government feels that recovery of Leave salary and Pension Contribution  is  warranted.    If  specific

(ix)    Leave    Salary    and    Pension

contribution:

(a)      While  accepting the proposal of the deputation, the competent authority should include in the   order   of   deputation   a   specific clause regarding the waiver of the recovery of Leave Salary and Pension contribution and shall mention the exceptional circumstances under which the competent authority feels that the waiver of recovery of Leave Salary and

clause is not mentioned in the deputation order, it would be presumed that such a recovery is waived.

(b) Verification regarding recovery of Pension contribution shall be waived in  respect of  all pension  cases presently under consideration and also the future cases, if the officers worked on deputation in the establishments such as Public sector Undertakings which are wholly owned or controlled by State Government or to any State government company where the State Government has a major share, or to any Local Body or University or to any Aided Institution which is under the control of the state Government, even though their original deputation orders stipulated  recovery  of  Leave  Salary and Pension contribution. even in respect of State Government  Companies,  where  there is  no  Grant  in  aid,  since  the Government has a major share, it should be treated as an extension of Government service and contribution shall be waived.    In respect of deputation of officers from one grant-in- aid institution to another grant-in-aid institution, the leave salary and Pensionary contributions shall also be waived, as in the final analysis, the expenditure is met by the Govt.   In cases where officers from grant-in-aid institutions are deputed to work in govt. or in Quasi Govt. organizations these contributions shall be waived on the same analogy.

Pension contribution is  warranted.   If specific clause relating to waiver of Leave salary and Pension contribution is  not  mentioned  in  the  deputation order, then  such recovery is applicable as per the rates mentioned in FR. 116.

(b)  When the borrowing institutions are of Central Govt./other State Govts./or the State Govt. Institutions in A.P. which receive funds from other sources such as world Bank/Central Govt. and the other institutions whose source of income is from other than Govt. of A.P./ and other institutions of A.P.,     like  Universities/Local  Bodies etc., who receive funds from Govt. of A.P. to some extent only and receive funds from other sources for the remaining extent, then such institutions shall   pay Leave salary and  pension contribution for borrowing Government servants. In other words Institutions which  receive  100%  of  funds  from Govt. of A.P. only are eligible for exemption of Leave salary and Pension contribution mentioned in G.O. Ms. No.

160, Fin. (FR.II) Dept., dt. 7-5-2010.

“In every case   where the recovery of Leave salary and Pension Contribution  is  necessary  the  same shall be effected at the following rates.

1)Leave salary Contribution: 

11% of the pay drawn in Foreign Service

2) Rate of Pension contribution:

% of the maximum monthly Pay of the post held by the Govt. Servant in Government Service, at the time of proceeding on Foreign Service

Note: 1.  The  appropriate  rate applicable according to the table of the rates under Fundamental Rule 116 which are based on length of service should be specified.

Note: 2. When waiver  of Leave Salary and Pension Contribution is not mentioned in the order, it shall be deemed to be recovered from the borrowing department.

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