Retirement Benefits

Reviewed by Vineeth | Updated on Sep 28, 2020

Introduction

Retirement and pension benefits are given to a retired government official to make sure that they have a constant income and a secured life. The pension provisions are in place to ensure that the retired government officials are well off and can be financially independent and can lead their retired lives with no financial challenges.

Parts of Retirement Benefits

The retirement benefits mainly consist of the employees’ leave encashment (employees are allowed to accumulate leaves and exchange them for cash on their retirement), retirement gratuity, and the amount that they were contributing to their provident fund account throughout their service.

All these, when put together, will result in a considerable corpus. This amount is going to be the backbone of the employee’s retired life. Using this amount wisely will alleviate the need to depend on others for handling financial expenses. This will give them a sense of financial confidence.

Other Benefits

Apart from the retirement benefits mentioned above, the retired government officials are also qualified to pension benefits. These benefits will allow them to lead a peaceful retired life with no hassles whatsoever in terms of finance.

The different kinds of pension available for retired government official at the end of their employment tenure are pension on retiring, superannuation, voluntary retirement pension, compassionate allowances, family pension, compensation pension, and extraordinary pension.

Superannuation pension plans are in place for those retired government officers who go on to serve until they turn 60 years old. Voluntary pension is paid out to those government officials who wish to retire just three months after they have completed serving for a period of 20 years.

Extraordinary pension schemes are a kind of pension plan which is paid out to those retired government employees that are differently-abled or physically challenged or to the families of those government employees who lost their lives in the service of their employment with the government.

Related Terms

  • Employee Provident Fund

    The Employee Provident Fund (EPF) is a retirement benefits scheme in which employees of an organisation contribute a small portion of their basic pay monthly.   Read more


  • Cost of Funds

    The cost of funds is the interest rate that financial institutions are paying on the funds they use in their business.   Read more


  • Previous Balance Method

    The previous balance method shows the method of credit card accounting in which the calculation of interest is on the basis of the debt owed at the end of the billing cycle.   Read more


  • Consumption Smoothing

    Consumption smoothing refers to a process of achieving a balance between spending for today's needs and saving for the future.   Read more


  • Showrooming

    Showrooming refers to the practice of checking out a product in a retail store before buying it from online retailers.   Read more


  • Average Propensity to Consume

    The average propensity to consume can be referred to as the percentage of income spent on goods and services by an individual.   Read more


Recent Terms

  • Target Risk

    Target risk assets are a class of assets that are not covered under the coverage of a reinsurance treaty or insurance policy because of a particular risk they possess.   Read more