WELCOME NEYVELI LIGNITE CORPORATION NAVRATNA GOVT OF INDIA

WELCOME NEYVELI LIGNITE CORPORATION NAVRATNA –GOVT OF INDIA ENTERPRISE NEYVELI , TAMILNADU

PENSION & POST RETIREMENT MEDICAL ASSISTANCE (PRMA) SCHEMES FOR EXECUTIVES & NON UNIONISED SUPERVISORS (NUS) Neyveli Lignite Corporation A Navratna – Government of India Enterprise

OBJECTIVES OF PENSION & PRMA SCHEMES v. Old Age income Security v. Reasonable standard of living on retirement v. Post Retirement medical assistance Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Scenario in CPSEs before 2007 Pay Revision Guidelines Ø Superannuation Benefits - Contributory Provident Fund & Gratuity. Ø No direct Company Contributory Retiral (3 rd) Benefits Ø Self Contributory Pension Scheme introduced by few Progressive PSU’s Ø Govt notified Employee Pension Scheme (EPS ‘ 95) as part of overall EPF scheme. Ø Pension payable under EPS 95 is / was very meagre. Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Pay Revision Guidelines dated 26/11/08 and 02/04/2009 of DPE v With effect from 01 -01 -2007, CPSEs allowed to spend up to a maximum of 30% of basic pay + Dearness Allowances for employee superannuation benefits. v 30% Superannuation benefits include Ø Provident Fund @ 12% (Statutory) Ø Gratuity @4. 16% (Statutory) - with a ceiling of Rs. 10 lakhs and Ø Rest Towards Pension & Post Retirement Neyveli Lignite Corporation Medical Benefits A Navratna – Government of India Enterprise

Pay Revision Guidelines dated 26/11/08 v CPSEs to have Own schemes to manage and 02/04/2009 of DPE Pension / PRMA funds or operate through Insurance Companies. v Satisfying criteria of eligibility - minimum of 15 years of service in the CPSE, prior to superannuation. v The CPSEs to operate the Pension & PRMA on Defined contribution basis. v CPSEs may develop Superannuation Scheme and obtain approval of their Administrative Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Superannuation Benefit Schemes in NLC Contributes 30% of Basic pay + Dearness Allowance to superannuation schemes in the following Proportion Provident fund 12. 00% Gratuity 4. 16% Pension 10. 00% Post Retirement Medical Assistance (PRMA) 3. 84% TOTAL Neyveli Lignite Corporation A Navratna – Government of India Enterprise 30. 00%

SALIENT FEATURES OF NLC PENSION SCHEME Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Pension scheme for Executives & NUS COVERAGE SCOPE ELIGIBILITY Neyveli Lignite Corporation A Navratna – Government of India Enterprise All Executives and Non-Unionised Supervisors Benefits in case of separation on or after 01 -01 -2007 on account of Superannuation / Death / Permanent Total Disablement / Voluntary Retirement. 15 years of Continuous Service (total of future service from date of entry into the scheme reckoned from entry into the scheme up to Normal Retirement or date of cessation of Service + past service prior to 0101 -2007 in NLC + service in other CPSE prior to commencement of service in NLC) In the event of death or permanent total disablement of the member, minimum service

Pension Scheme for Executives & NUS OPERATING MODALITIES v Management of Scheme Ø The scheme is operated by an exempted irrevocable Trust appointed by the company. Ø The Trust operates through fund manager(s) approved by IRDA Ø Choice of Annuity option / Annuity Provider is available to the member v Contributions: 10% of Basic + DA of individual employee paid by the company to the Trust on monthly basis. v There is no cross subsidy(contribution) involved Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Pension Scheme for Executives & NUS v Management of Fund: § The Trust transfers the contributions to the Fund Manager(s) every month. § The Fund managers maintain a running account in favour of the Trust. § Fund Managers maintain member wise accumulation and provide accumulation statement as on 31 st March every year. v Financial Implication: § @ 10% Basic + DA, the contribution towards Pension for the year 2011 -12 worked out to Rs. 33. 43 Crores for 4238 Neyveli Lignite Corporation members. A Navratna – Government of India Enterprise

Pension Scheme for Executives & NUS v BENEFITS When pension becomes payable - the Fund Manager(s), on the advice of the Trust, appropriate the accumulation of the Member to the appointed / empanelled annuity provider(s), based on the choice of the beneficiary v Member may choose any of the following option on retirement Ø Life Annuity with Return on Capital Ø Joint Life with Annuity Ø Joint Life with return on Capital v In Case of Death, the option is to be exercised by the appointed beneficiary as per the scheme Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Transfer of Accumulation Ø Member can transfer the accumulation to another approved fund, provided he rendered a minimum service of 15 years. Ø If less than 15 years of service transfer of accumulation to another PSE having similar fund is allowed only on completion of 15 years of service in CPSE*. * (the service rendered in NLC + past CPSE service + the service to be rendered in the newly joined CPSE). Neyveli Lignite Corporation A Navratna – Government of India Enterprise

POST RETIREMENT MEDICAL ASSISTANCE SCHEME (PRMA) for post 01/01/2007 Retirees (Executives & NUS) Neyveli Lignite Corporation A Navratna – Government of India Enterprise

PRMA for Executives & Non Unionised Supervisors of NLC COVERAGE Executives and Non-Unionised Supervisors who got / gets separated from the services of NLC on or after 0101 -2007 SCOPE To extend Medical Assistance and Health Insurance Minimum of Continuous Service of 15 years in NLC including past service ELIGIBILITY in CPSE except in case of death (for Death: 10 years) Neyveli Lignite Corporation A Navratna – Government of India Enterprise

PRMA scheme for Executives & NUS OPERATING MODALITIES v The scheme is operated by the committee specifically constituted by the company v The Committee runs the scheme through Fund Managers / Insurance providers. v The Contribution @ 3. 84% of Basic + DA received from the company is transferred to the fund account on monthly basis. v The premium towards Health Insurance is paid directly to the insurer & the rest is invested through Fund Neyveli Lignite Corporation A Navratna – Government of India Enterprise

PRMA Scheme for Executives & NUS BENEFITS : Present scale of benefits (based on actuarial valuation) are Outpatient treatment for limited to a maximum of member and spouse Rs. 20, 000/- per annum. Inpatient / Hospitalization treatment expense for member and Spouse limited to Rs. 4 lakhs per annum. v The scale of benefits gets reviewed every three years depending on fund accumulation and actuarial valuation. Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Neyveli Lignite Corporation Thank you Neyveli Lignite Corporation A Navratna – Government of India Enterprise

DPE GUIDELINES FOR EMPLOYEES RETIRED PRIOR TO 01 -01 -2007 Gist of DPE Guidelines dated 08 -07 -2009 v Individual CPSE may create a corpus with not more than 1. 5% of PBT to take care of medical and other emergency needs of retired executives and those employees not adequately covered by the pension scheme v Introductory year & Subsequent years: Not more than 1. 5% of PBT of previous financial year to be funded. v No budgetary support from Government v A committee of Directors may be constituted by the Board of each CPSE for disbursement of fund and to identify areas medical and emergency needs. Neyveli Lignite Corporation v Board of CPSEs to consider framing of scheme with the approval A Navratna – Government of India Enterprise

DPE GUIDELINES FOR EMPLOYEES RETIRED PRIOR TO 01 -01 -2007 Gist of DPE guidelines dated 20 -07 -2011 v Administrative Ministry / Department may consider creating a common corpus v Each CPSE to contribute not more than 1. 5% of its PBT to the said corpus. v Committee headed by Independent Director to be decided by Ministry / Department to be formed by the Ministry for implementation of the said corpus. v Scheme based on individual CPSE as conveyed in O. M dated 08/07/2009 to continue but within the basic conditions indicated O. M dated 08 -07 -2009. Neyveli Lignite Corporation A Navratna – Government of India Enterprise

DPE GUIDELINES FOR EMPLOYEES RETIRED PRIOR TO 01 -01 -2007 Gist of DPE guidelines dated 20 -07 -2011 contd… Ø Contributions towards the Individual CPSE scheme / Common Corpus Scheme of Ministry together at any year shall not exceed 1. 5% of PBT of previous year. Ø The scheme may be implemented through approved insurance companies. Ø Benefits under the scheme may vary from year to year depending on contribution by CPSE(S), affordability and sustainability of the CPSE concerned. Ø Scheme should not become a defined benefit Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Post Retirement Medical Assistance in NLC for pre 01 -01 -2007 Retirees v NLC has been operating Post Retirement Medical Assistance Scheme (PRMA) since 1995. v COVERAGE: Scheme covers all Employees of NLC. v Eligibility: 10 years of service in NLC v Benefits: Ø Outpatient treatment for member and spouse: limited to a maximum of Rs. 10, 000/- per annum. Ø Inpatient / Hospitalization treatment expense for member and Spouse: limited to Rs. 2 lakhs per annum. Neyveli Lignite Corporation A Navratna – Government of India Enterprise

Issues to be discussed v Pre 01 -01 -2007 retirees pressing to increase in scale of benefits. v Pre 01 -01 -2007 retirees Pressing for Pension benefits as well. v Similar schemes operating if any in other CPSEs. v As per DPE Guidelines dated 20 -07 -2011 benefits may vary from year to year depending on PBT contribution by CPSE, affordability and sustainability. CPSE may find it difficult to bring down the scale of Neyveli Lignite Corporation A Navratna – Government of India Enterprise