The federal government has said that it has devised a compulsory retirement package for employees of the dead ministries, divisions and departments in order to ensure the PWD employees do not suffer financially.
In this plan, candidates who have worked for the company for more than ten years shall be paid a lump sum amount, equivalent to one and a half of their gross monthly salary for the remaining working years to their retirement age.
As per media reports, four different options are under active consideration for the employees of PWD and any other ministries/federal institutions that may be bearing competence-ceiling change.
The Ministry of Finance has endorsed a cash and carry product for the compensation of the PWD employees in the form of insurance that provides lump sum compensation and pension.
For the employees with more than ten years of service, they will be provided with 1.5 times their gross monthly remuneration until they retire and besides they will be issued with a pension.
Amendments to the Civil Servants Act
Changes have been made in civil servant act of 1973 to give legal backing to this retirement plan in its formal sense. Regarding Section 2 (1) H and Section 11 C of the Act, some amendments have been made for the incorporation of the compulsory retirement package.
They have also been endorsed by the Cabinet Committee on Legislation and are set to be tabled by the Federal Cabinet soon. The package will be as follows: It will only be for employees who had been affected by termination, dissolution, and ministry and department mergers.
He noted that those who turned down the early retirement offer they say is compulsory, may find their services not required any longer. But they can appeal to the committee constituted by the Prime Minister within seven days, and the said committee will pass the order within a maximum of thirty days.
Four Proposed Options
The government has outlined four options for the retirement package
Lump Sum Payment: There is also provision for payment of service award which will attract a lump sum payment of Ten Months gross salary in respect of every perspective employee with ten years’ service. For employees, who have been in service more than two decades of years, it will be a two month’s gross salary for each year served.
Graduated and Compensatory Pension: Employees who serve the company for 5 to 10 years shall be awarded a basic salary up to their retirement age, people who serve the company for more than 10 years are eligible for pension.
Establishment Division’s Proposal: Employees who served the company for 10 years will get 0.25 to 0.5 times the gross monthly salary of the concerned employee while those who served the company for ten to twenty years will receive an amount equivalent tolifetime retirement benefits or that which the company is willing to offer. One and a half month or five times the gross monthly salary. Those who have served in their various places for 20 years and above will be eligible for monthly pension equivalent to 100%, 150% & 200% until they retire.
Hybrid Lump Sum and Pension Package: Employees with permanent disability under PWD will be given the computation of one and a half gross salary for the period until they serve ten years of service and the remaining of the time until reaching the age of retirement. For those who have served the company for or more than ten years, the pension scheme will be implemented which will entail paying one and half gross monthly salary for each year served.
This retirement package is part of cost-cutting measures whereby the Federal government of Germany has been restructuring the ministerial and institutional setup. People in the new entities that are anticipated to be restructured will also be given similar packages to enable them financially.
