Government Gives Major Boost to Salaries and Pensions of Financial Sector Employees and Retirees

In a move aimed at strengthening social security and ensuring financial well-being for employees and pensioners in the Indian financial sector, the Central Government has approved significant wage and pension revisions for staff and retirees of Public Sector General Insurance Companies (PSGICs), the National Bank for Agriculture and Rural Development (NABARD), and the Reserve Bank of India (RBI).

The wage revision and pension enhancement decisions were taken by the Ministry of Finance to boost morale among serving employees and enhance the retirement benefits for pensioners and their families, reflecting the government’s continued focus on employee welfare and social security.

PSGICs Wage and Family Pension Revision

For employees of Public Sector General Insurance Companies (PSGICs) — which include National Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd., United India Insurance Company Ltd., General Insurance Corporation of India, and Agricultural Insurance Company Ltd. — the wage revision will be effective from 1 August 2022.

• The overall wage bill will increase by 12.41%, with a 14% rise in basic pay and dearness allowance.
• Over 43,000 employees are set to benefit from this wage hike.
• The National Pension System (NPS) contribution for employees who joined after April 1, 2010, has been enhanced from 10% to 14%, strengthening future retirement savings.
• Family pension has been standardized at 30% of the basic pension, benefiting about 14,615 family pensioners.

The total financial implication of the PSGIC measures is estimated at around ₹8,170 crore, including arrears and enhanced pension payouts.

NABARD Pay and Pension Revisions

Employees of NABARD will receive a 20% increase in pay and allowances, effective from 1 November 2022, benefiting approximately 3,800 current and former staff members.

For retirees of NABARD who retired before November 1, 2017, basic pension and family pension have been aligned with benefits received by former RBI staff — ensuring parity for long-serving employees.

The pay revision will result in an additional annual wage expenditure of around ₹170 crore, while pension adjustments will cost ₹50.82 crore in arrears plus recurring monthly payouts.

RBI Pension Enhancement

The government has also approved a pension revision for Reserve Bank of India retirees and their families, effective from 1 November 2022.

Under the revised structure:

• Pension and family pension will increase by 10% on the basic pension plus dearness relief.
• This effectively results in a 1.43 times enhancement in basic pension.
• Approximately 30,769 beneficiaries — including pensioners and family pensioners — will benefit from the increase.

The fiscal impact of the RBI pension revision is estimated at around ₹2,697 crore, including arrears and future payments.

Overall Impact

Taken together, the government’s latest revisions are expected to benefit a total of about 46,322 employees, 23,570 pensioners and 23,260 family pensioners across PSGICs, NABARD and RBI.

These measures are designed to help employees and retirees better cope with rising living costs while preserving their dignity and financial security in retirement. The government has reiterated its commitment to strengthening key financial institutions that underpin India’s inclusive and sustainable economic growth.

Source: PIB