GPF
From Indiapensions
The GPF is a provident fund run for employees of the Central Government. Though it is a provident fund, it is in reality a pay-as-you-go scheme wherein the current contributions are used to finance the current withdrawals. The remaining corpus, if any, is used by the Government.
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Applicability
All permanent Government servants and all re-employed pensioners (other than those eligible for contribution to the CPF) are eligible to subscribe to the GPF. In case of temporary government servants, one-year continuous service term is required for becoming eligible to subscribe to this fund. If the temporary employee has been transferred from a corporate body (owned or controlled by the Government) and other departments of the Central Government or State Government, the service under that corporate body should be counted as service period required for being eligible under this scheme. The above rule also applies to employees transferred from State Governments or other Central Government departments.
Operational framework
Contributions
A subscriber has to contribute monthly to the fund when on duty or foreign service, but not during suspension. The subscriber can choose to contribute any thing (it should be a whole number) between 6% and 100% of his emoluments (including the boundary points of this interval). If an employee was previously contributing to CPF at the higher rate of 8.33%, then that employee is bound to contribute more than or equal to 8.33% of his emoluments. A government servant who is retiring on superannuation is exempted from making any subscription to the fund during the last three months of his service. This is a compulsory exercise.
Interest rate
The Government has to pay to the credit of the account of a subscriber interest at such rate as may be determined for each year according to the method of calculation prescribed from time to time by the Government of India. The following table shows the interest rates credited to the GPF in the past few years.
| Year | Interest rate |
|---|---|
| 1986-87 to 1999-2000 | 12.00% |
| 2000-01 | 11.00% |
| 2001-02 | 9.50% |
| 2002-03 | 9.00% |
| 2003-04 | 8.00% |
In case, the rate of interest determined for a year is less than 4%, all subscribers to the fund in that year are to be allowed an interest of 4%. In the case of subscribers, who were previously subscribers to CPF (and were getting 4% return) and whose subscription together with interest thereon has been transferred to the GPF, an interest rate of 4% will be allowed on their GPF. The manner in which the interest has to be credited is same as that given for CPF.
Advances
Advances, withdrawals and their recovery rules are same as the rules for CPF.
Transfer to the GPF, from the CPF
If a subscriber to the CPF is permanently transferred to pensionable service, he has the options
- to continue to subscribe to the CPF. In this case he does not get a pension.
- to transfer his accumulations in the CPF to the GPF. In this case, the Government contributions to his CPF have to be repaid to the Government. The employee's service period while being a subscriber to the CPF has to be counted as qualifying service in determination of his pensionary and other retirement benefits.
Deposit Linked insurance scheme
On the death of a subscriber (this applies to suicide also), the person entitled to receive the amount standing to the credit of the subscriber is paid an additional amount equal to the average balance in the account during the three years immediately preceeding the death of such a subscriber. This is subject to the following conditions:
- The balance to the credit of such a subscriber, at any time during three years preeceding the month of death, should not have fallen below the prescribed limit.
- The additional amount payable under this scheme should not exceed Rupees sixty thousand .
- The subscriber has put in at least five years service at the time of his death.
The employee has to be treated as a subscriber even during the last three months of his service, when subscriptions have been discontinued.
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