Why is IIT PF illegal?

CHENNAI: Under the CPFG scheme, a professor who retires gets back just the principal plus interest at the rate of eight percent (prior to 1992 it was 12 percent) on their PF contribution plus the employer’s contribution, which in the case of the IITs is the government’s contribution.In contrast, those under the GPF scheme are paid back the employee’s contribution to PF with interest. In the place of the employer’s contribution, a monthly pension at the rate of 50 percent of the last 10 months’ basicpay plus Grade Pay plus DA is paid to the retired employee till his/her death andthereafter a lesser amount to his wife for lifetime.According to a whistleblower in the IIT Madras, the illustrative benefit of this works out thus: A typical professor, who had opted earlier in 1987 to stay backin the CPFG scheme, retired after completing 33 years of continuous services in IIT, any time after the implementation of the Sixth Pay Commission pay scales in IITs (with effect from January 1, 2006), would have received only around Rs 9 lakh as government’s contribution to the CPFG. In addition, he would get the usual gratuity and his own accumulated contribution to the PF along with eligible interest. On the contrary if this professor is allowed to illegally switch over to the GPF scheme, from the date of his retirement he would not only receive his cumulative contribution to the PF but also a monthly pension of Rs 52,000from the government till his death. After his lifetime, his wife would be eligible to receive a Family Pension of Rs 15,000 a month till her death. Both these pensions are eligible for upward revision as and when the governmentrevises the DA rates for its employees.In addition, the pensioner has an option to claim and receive a lump sum payment of 84 times of 40 percent of his basic eligible pension at the time of retirement from the government, which approximately works out to Rs 9 lakh as on date. In such an eventuality, his pension will get revised to Rs 42,000instead of Rs 52,000 till he attains the age of 75 years, and the full pension of Rs 52,000 will be restored on his attaining 75 years.In other words, had he not been permitted to switchover, the government’s pay out to him (in terms of the employer’s contribution to PF) would have been just 18 months of the pension money.