Pay Hike for Insurance, NABARD Employees; Pension Boost for RBI Retirees

The Government of India has approved a comprehensive wage and pension revision package for employees and pensioners of key financial institutions, aimed at offering substantial financial relief amidst rising living costs and strengthening post-retirement security. Under the decision, the wage revision for employees of Public Sector General Insurance Companies (PSGICs) will be effective from August 1, 2022, with a total increase of 12.41% in the wage bill, including a 14% rise in basic pay and dearness allowance. This revision is expected to benefit about 43,247 employees across companies such as National Insurance, New India Assurance, Oriental Insurance, United India Insurance, General Insurance Corporation and Agricultural Insurance Company. The government has also increased its contribution to the National Pension System (NPS) from 10% to 14% for employees who joined after April 1, 2010, and revised the family pension to a uniform rate of 30%, which will benefit over 14,600 family pensioners. The total financial outlay for PSGICs, including wage arrears, enhanced NPS contributions and family pension revisions, is estimated at around ₹8,170.30 crore.

For the National Bank for Agriculture and Rural Development (NABARD), the government has approved a pay and allowance revision effective November 1, 2022, providing roughly a 20% increase for Group A, B and C employees. This move will benefit about 3,800 serving and former employees and will entail an additional ₹170 crore annual wage bill plus around ₹510 crore in arrears. Pension and family pension for NABARD retirees who were originally recruited by the institution and retired before November 1, 2017 have been revised to bring them on par with existing benchmarks, resulting in a one-time arrear payout of ₹50.82 crore and an extra monthly pension outgo of approximately ₹3.55 crore.

In addition, the government has approved a pension and family pension increase for retirees of the Reserve Bank of India (RBI). Under this revision, pension and family pension will be enhanced by 10% on basic pension plus dearness relief, effective November 1, 2022, translating into an effective increase of 1.43 times in basic pension. This revision will benefit 30,769 RBI retirees and family pensioners, including 22,580 pensioners and 8,189 family pensioners. The financial implication of the RBI pension revision is estimated at approximately ₹2,696.82 crore, including ₹2,485.02 crore towards arrears and a recurring annual expenditure of ₹211.80 crore.

Overall, the combined measures will benefit around 46,322 serving employees, 23,570 pensioners, and 23,260 family pensioners across PSGICs, NABARD and RBI. The government has stated that this decision underscores its commitment to social security, financial well-being and dignified retirement benefits for those who have contributed to key financial institutions, while helping beneficiaries cope with inflationary pressures and maintain a sustainable quality of life in retirement.