Leave Encashment and Group Insurance for Railway Employees

Leave Encashment, Composite Transfer Grant, Group Insurance, Deposit Linked Insurance applicable to Railway Employees

1.         What are the other benefits admissible on Retirement/Death?

Other benefits admissible on Retirement/Death are:

(i) Leave Encashment

(ii) Composite Transfer Grant

(iii) Group Insurance

(iv) Deposit Linked Insurance

(v) Medical Facilities under RELHS

(vi) Post Retirement Complementary Passes

2.         What is Leave Encashment?

The lump sum amount paid to a Railway Employee on Retirement/Voluntary Retirement or on Death, pertaining to leave (LAP) to his credit, subject to a maximum of 300 days Leave on Average Pay (LAP). It is calculated on the last Pay drawn and the Dearness Allowance admissible on the last pay.

Illustration for calculating Leave Encashment

In case of an employee serving in Pay Band-2 ScaleRs.9300-34800 in Grade Pay Rs.4200 who was drawing Last Pay Rs.20000/- retires on superannuation after completing 33 years of qualifying service. 40% commutation of Pension opted.

Leave encashment LP + DA x No. of LAPs


48920+22014×300  = Rs.709340


3.         What is Composite Transfer Grant?

In the event of retirement the Railway Employee and in case of death, his family members are eligible for Composite Transfer Grant,RetirementPasses and KitPasses, to carry the belongings to their new place of residence, after retirement/death.

4.         What is Group Insurance?

The ‘Group Insurance Scheme, 1980’ which came into existence w.e.f. 01.01.1982, provides for the Railway Employee on a wholly contributory and self financing basis, the twin benefits of an Insurance cover to help their families in the event of death during service and a lump sum payment to augment their resources on retirement.

The subscription is partly credited to an ‘Insurance Fund’ (70%) and partly to ‘Saving Fund’ (30%). From Insurance Fund, payment is made for insurance cover in case of death while portion of subscription credited to this fund with interest thereon is paid to the employee on retirement or to the family, if he dies while in service.

Scale of Insurance Amount

Group of employee

Amount of Insurance payable in the event of death in service

Rate of Subscription














Every Railway Employee, who is a member of this scheme, shall exercise a nomination in favour of a member of his family. In case of an employee who has no family, the payment will be made to the person who had been nominated for this purpose by the Railway Servant. If no nomination is made by an employee who has no family, the amount will be paid to the person who produces Succession Certificate.

5.         What is Deposit Linked Insurance?

To provide extra social security to the families of the subscribers to SRPF and a positive incentive to Railway Employees who save more, a ‘Deposit Linked Insurance Scheme’ had been introduced w.e.f. 08.01.1975, which provides insurance cover without payment of premium. As per Railway Services (Revised Pay) Rules 2008, under this scheme, an additional amount equal to the amount standing at the credit of the Provident Fund Account of the deceased Railway Employee, provided during the last three years preceding the death, he had the following minimum qualifying balance in his Provident Fund Account:

Subscriber holding a post in Scale

(Pay Band and Grade Pay)

Minimum balance in PF Account in last 36 months

(i)Pay Band 2 (Rs.9300-34800) or above and drawing Grade Pay Rs.4800/- or more


(ii)Pay Band 2 (Rs.9300-34800) and Grade Pay Rs.4200/- or more but less than Rs.4800/-


(iii)Pay Band 2 (Rs.9300-34800) or Pay Band 1 (Rs.5200-20100) or Pay Band 1S (Rs.4440-7440) and Grade Pay Rs.1400/- or more but less than Rs.4200/-


(iv)Pay Band 1S (Rs.4440-7440) and Grade Pay Rs.1300/- or more but less than Rs.1400/-


The minimum balance available in Provident Fund Account during the last 36 months will be paid to heir of the deceased employee subject to ceiling limit of Rs.60000/-.

Check links below for more details on each of Retirement Benefit applicable to Railway Employees

Source: Indian Railways