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Rule 128 - Pension Charges | KartavyaDesk

GFR 2017

Original Rule Text

Rule 128 Adjustment of Pensionary Charges of certain Commercial Departments. Except as otherwise provided, the pensionary liability of commercial departments and undertakings, for which pro forma commercial accounts are maintained, shall be assessed on a contribution basis at such rates as may be fixed by Government from time to time. In the case of departments and undertakings, for which no regular commercial accounts are maintained either within or outside the regular Government accounts but which are allowed to charge for their products or services rendered, the pensionary liability shall be taken into account in the estimate of overhead charges and manufacturing costs for the purpose of calculating the issue price of goods manufactured or fees for services rendered. The calculation shall be made at rates prescribed for the purpose by Government.

What This Means

In simple terms, Rule 128 ensures that pension liabilities are properly accounted for in departments that generate revenue, whether through direct contributions or by including pension costs in their pricing. This rule affects all government departments and undertakings that operate on a commercial basis or charge for their services, as well as the employees working within them, and the government as a whole, as it ensures proper financial planning for pension obligations.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Applies to commercial departments and undertakings of the government.
  • •Pensionary liability is assessed on a contribution basis for departments with pro forma commercial accounts.
  • •For departments without commercial accounts but charging for services, pension costs are included in pricing.
  • •Government sets the rates for pension contributions and cost calculations.
  • •Ensures pension liabilities are accounted for in revenue-generating departments.

Practical Example

Alternatively, the 'Government Training Institute, Jaipur' provides specialized training to government employees and charges a fee for its courses. While it doesn't maintain full commercial accounts, it needs to factor in pension costs when determining the course fees. The government prescribes a rate of 8% of the salary of the trainers to be included as a pensionary charge in the overhead costs. The Institute then adds this 8% to the overall cost of running the training program, which is then used to calculate the fee charged to participants.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What are 'pro forma commercial accounts'?▼
These are accounts maintained by government departments that operate like businesses, tracking income, expenses, and profitability, even though they are part of the government.
Who decides the contribution rates for pensionary liability?▼
The Government, typically through the Ministry of Finance, determines the contribution rates based on actuarial assessments and overall financial considerations.
What happens if a department fails to comply with Rule 128?▼
Failure to comply could lead to audit objections, financial irregularities, and potential disciplinary action against the responsible officers. It also undermines the accurate accounting of government liabilities.
Does this rule apply to all government employees?▼
No, it specifically applies to employees of commercial departments and undertakings, or those in departments that charge for their services, as described in the rule.
How often are the contribution rates reviewed?▼
The contribution rates are reviewed periodically by the Government, depending on factors like changes in salary structures, pension rules, and actuarial valuations.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 128 of GFR 2017, how is the pensionary liability of commercial departments and undertakings, for which pro forma commercial accounts are maintained, assessed?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

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