Additional Dearness Allowance: RBE No.144/1985 – Treatment of ADA on Retirement

No.PCIII/85/DP/1, dated 17.05.1985

Sub: Treatment of a portion of Additional Dearness Allowance as pay for the purpose of retirement benefits.

1. Reference is invited to this Ministry’s letter No.PCIII/79/DP/1, dated 11.06.1979 as amended vide letter No.PCIII/82/DP/1, dated 16.04.1982, No.PCIII/82/DP/3, dated 30.04.1982 and 11.05.1983 read with clarifications issued from time to time on the above subject.

2. The question of treatment of further portion of Additional Dearness Allowance/ Ad-hoc Dearness Allowance as Dearness Pay has been engaging the attention of the Government and the President isnow pleased to decide that the entire Additional Dearness Allowance and Ad-hoc Dearness Allowance sanctioned under this Ministry’s letter No.PCIII/85/DA/1, dated 19.01.1985 (RBE No.24/1985) (linked to average index level 563) shall be treated as Dearness Pay in addition to Dearness Pay treated as part of pay vide this Ministry’s letter dated 11.06.1979, as amended vide letter dated 16.01.1982 referred to above for the purpose of retirement benefits in respect of railway servants who retire on or after 31.03.1985 to the extent specified hereafter.

Pensions and Gratuities

3.     (i)    The Dearness Pay indicated above shall count as emoluments for pension and gratuity in terms of Rule 2303(21) RII (Para 501 of Manual of Railway Pensions Rules).

        (ii)    Except as stated below, the average emoluments under Rule 2545-RII (Para 502 of Manual of Railway Pensions Rules) shall be determined on the above basis.

        (iii)   In the case of persons who retire on or after 31.03.1985 but within ten months from that date, the average emoluments will be calculated as follows:

(a)In the case of persons who retire between 31.03.1985 and 30.08.1985One half of dearness pay now being merged appropriate to the pay equal to average emoluments shall be added to the average emoluments.
(b)In the case of persons who retire after 30.08.1985Full dearness pay now being merged appropriate to the pay equal to average emoluments shall be added to the average emoluments.

4.     Persons who retire on or after 31.03.1985 will have an option to choose either of the two alternatives below:

(a)   To, have both the pension/ service gratuity and death-cum retirement gratuity calculated on their pay, without including the element of Additional Dearness Allowance and Ad-hoc Dearness Allowance, treated as Dearness Pay by virtue of these orders, and get Dearness Relief on pension in accordance with the orders so far in force.

OR

(b)   To have both the pension/ service gratuity and death-cum-retirement gratuity calculated after taking into account the element of dearness pay as now being merged. In such, cases, the pensioners will be entitled only to the instalments of dearness relief which may be sanctioned beyond the average index level 568.

5.     The ceiling on maximum amount on gratuity raised from Rs.36000 to Rs.50000 vide this Ministry’s letter No.F(E)III/82/PN1/3, dated 17.05.1985 shall be applicable to both who opt for merger of dearness pay or not in terms of paragraph 4 of this order.

6.     The option may be exercised within 6 months before retirement. However, Railway servants who retire on or after 31.05.1985 but upto 30.09.1985 may exercise their option upto 30.09.1985. The option once exercised shall be final. Those who fail to exercise the option within the stipulated period will be deemed to be governed by para 4(b) above.

7.     In case where the retired Railway servants die before exercising option within stipulated period as per para 6 above, the Head of Office will calculate the pension and death-cum-retirement gratuity under both the options in para 4 above and sanction the more advantageous of the two.

8.     There will be no ceiling on the amount of monthly pension for Government servants retiring on or after 31.03.1985.

State Railway Provident Fund (Contributory)

9.     For calculating the amount of subscription towards SRPF(C) by Railway servants and Government contribution to the contributory Provident Fund as also special contribution to Provident Fund, the dearness pay, appropriate to the pay on which these contributions are based, shall be treated as part of such pay. For this purpose, these orders will have effect from 31st March, 1985.

Temporary Railway Employees

10.   With effect from 31st March, 1985, the ‘dearness pay’ indicated in para 2 above, shall also be treated as part of pay for the purpose of terminal gratuity admissible under para 707 of Manual of Railway Pensions Rules.

11.   These orders do not apply to:-

(a)   persons appointed on contract;

(b)   persons who are granted consolidated rates of pay and are not in receipt of dearness allowance; and

(c)    family pensions.

Download Railway Board Circular RBE No.144/1985 

Forward reference ⇒ RBE No.188/1985, RBE No.326/1987, RBE No.90/1987,

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