MODIFICATIONS IN PRBS BENEFITS

PRBS closed as on 31/12/2006.

The benefits of PRBS revised.

New scheme (DCPS) as per the DPE

guidelines implemented w.e.f. 01.01.2007

Pension calculation of members done in 2

parts:

1.Benefit under Defined pension scheme till

31.12.2006

2. Benefits under Defined Contribution scheme

from 01.01.2007 till date of retirement.

1.Benefit under PRBS

till 31.12.2006

• Revised Benefits of PRBS:

Revised monthly pension on actual DoR = 50% of Basic pay as on 01.01.2007 X Reckonable service / 33

Future value of Corpus (FVC) as on DoR :

Pension Benefit as above X 132.59

Discounted corpus value (DCV) as on 31.03.2012:

FVC/ 1.095^n (n= no of year fraction from 31.03.2012 to actual DoR)

One time corpus to be transferred to Individual’s pension Account

DCV* 1.085^N (N= No of year fraction from 01.04.2012 till actual

date of corpus transfer)

ONGC has contributed a one time subsidy of Rs 1624 Cr .

Calculation of Benefits under the scheme

Past Service (PS)

Period from date of joining ONGC to date of joining the Scheme

Future Service(FS)

Period from date of joining the Scheme to date of Superannuation.

Reckonable P.S. (RPS)

Reckonable F.S. (RFS)

(1- P.S. x 1.2/100) x P.S.

(1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

DPE Guidelines for DC model

• Maximum 30% of Pay (Basic + DA) permitted as Post

Retirement Benefits

• Include PF, Gratuity, Post retirement medical benefits.

• The balance left to be contributed to an approved Pension

Plan operating on a DC model

• Pension Plan to operate only on DC model and no other

pension scheme to be supported by Management

• Pension scheme can get a maximum of 15% allocation out of

this 30% due to restrictions in IT Act.

2. Benefits under

Defined Contribution Pension Scheme (DCPS)

from 01.01.2007 till Date of Retirement (DoR).

Defined contribution model

Individual Pension account to be maintained

3 components of contribution:

1. Employer’s contribution: 15% of Basic + DA

2. Employee’s contribution: 3% of Basic + DA

3. Uniform subsidy as per existing provision

No death in service benefit as in PRBS

Corpus on cash basis to be used for purchase of

annuity

Pension benefit to depend on prevailing market

annuity interest rate as on DoR.

Provisions of Income Tax Act / Rules

Rule 87 of the Income Tax Rules, 1962:

- the ordinary annual contribution by employer shall not exceed 27% of the salary as reduced by the employer contribution if any, to any provident fund.

Section 115WB(1) of the I T Act, 1961:

- Contribution by the employer to an approved superannuation fund in excess of Rs. One Lac for each employee is chargeable to fringe benefit tax.

Merits:

1. Huge increase in contribution to the new pension fund w.e.f.

01.01.2007

2. Increased funding from Company

3. Contribution dynamic w.r.t increase in Basic and DA

4. Uniform subsidy to continue.

5. Contributions directly deposited in individual pension account

on cash basis (No cross subsidising of seniors by Juniors)

NEW PENSION SCHEME

Drawbacks:

1. No life cover for death in service as against PRBS.

2. Increased tax liability (Annual contribution above Rs 1 lakh taxable)

3. Exposed to market risk (Final pension dependent on prevailing market interest

rate

4. Formula for computing of corpus flawed.

5. Discounting rate considered very high (9.5%) resulting in devaluation of PV

of corpus.

6. Unequal distribution of benefits: Seniors get very huge additional subsidy

7. Since Basic as on 01.01.2007 is considered for pension calculation as against

the notional salary (Basis : Basic+DA+PP-92 as on16.11.1995), differential

career growth amongst different individuals / Disciplines will have impact on

final benefit.

NEW PENSION SCHEME

Sample Calculation : Past Benefit

Date of joining ONGC 20/10/1978

Date of joining PRBS Scheme 01/04/1990 11.45479

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

9.8802

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

19.39295865

Total reckonable service as on 01.01.2007 29.2732

Basic on 01.01.2007 64170

PRBS Pension as on date of

superannuation 28462

Corpus as on date of superannuation 3773715

Date of Superannuation 31/07/2014

Fund reckoning Date 31/03/2012

Corpus Discount Years 2.33

Discounted corpus value as on 31.03.2012 3053282

Corpus transfer date 31/10/2013 1.586301

Appreciated corpus value as on 31.10.2013 3475115

Corpus transferred to Individual Account

vide Nov Pay Slip

The corpus transferred to Individual’s Pension Account in 3 parts

Part -1: Notional corpus of erstwhile PRBS discounted to 31.03.2012

Part 2: 15% of Basic + DA of individual w.e.f.01.01.2007

Part 3: The contributions to old PRBS scheme w.e.f 01.01.2007 till date

including 8.5% interest

Date of joining ONGC 16/09/1974

Date of joining PRBS Scheme 01/04/1990 15.55068

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

12.6488

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

19.39295865

Total reckonable service as on 01.01.2007 32.0418

Basic on 01.01.2007 57860

PRBS Pension as on date of superannuation 28090

Corpus as on date of superannuation 3724445

Date of Superannuation 30/04/2007

Fund reckoning Date 30/04/2007

Corpus Discount Years 0.00

Discounted corpus value as onDOR 3724445 (Actual corpus to be transferred to

Individual's Pension account

Corpus transfer date 31/03/2012 4.923288

Appreciated corpus value as on DOR 3724445

Revised Benefit Old scheme Additional benefit

Corpus from Past scheme (PRBS) 3724445 1260000 2464445

Corpus from New Scheme (DCPS) 47018 0

Corpus from Addl Contribution 21920 0

Total Corpus on DoR 3793384 1260000 2073043

Pension without commutation (Scheme) 28610 10500 18110

1/3 Commutation 1264461 420000 844461

Balance Pension under Scheme "E" 19073 7000 12073

Sample calculation of total Benefit (DoR Apr 2007)

Sample calculation of total Benefit (DoR Jul 2012)

Date of joining ONGC 17/08/1981

Date of joining PRBS Scheme 01/04/1990 8.627397

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

7.7342

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

19.39295865

Total reckonable service as on 01.01.2007 27.1272

Basic on 01.01.2007 57860

PRBS Pension as on date of superannuation 23781

Corpus as on date of superannuation 3153187

Date of Superannuation 31/07/2012

Fund reckoning Date 31/03/2012

Corpus Discount Years 0.33

Discounted corpus value as on31.03.2012 3058974 (Actual corpus transferred to

Individual's Pension account

Corpus transfer date 31/03/2012

Appreciated corpus value as on DOR 3143533

Revised Benefit Benefit as per Old scheme Addl benefit

Corpus from Past scheme (PRBS) 3143533 2230115 913418

Corpus from New Scheme (DCPS) 1180940 0

Corpus from Addl Contribution 383121 0

Total Corpus on DoR 4707593 2230115 2477478

Pension without commutation (Scheme) 35505 16577 18928

1/3 Commutation 1569198 743372 825826

Balance Pension under Scheme "E" 23670 11051 12619

Sample calculation of total Benefit (DoR Jul 2014)

Date of joining ONGC 20/10/1978

Date of joining PRBS Scheme 01/04/1990 11.45479

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

9.8802

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

19.39295865

Total reckonable service as on 01.01.2007 29.2732

Basic on 01.01.2007 64170

PRBS Pension as on date of superannuation 28462

Corpus as on date of superannuation 3773715

Date of Superannuation 31/07/2014

Fund reckoning Date 31/03/2012

Corpus Discount Years 2.33

Discounted corpus value as on 31.03.2012 3053282

Corpus transfer date 31/10/2013 1.586301

Appreciated corpus value as on 31.10.2013 3475115

Corpus from Past scheme (PRBS) 3693760

Corpus from New Scheme (DCPS) 1942415

Corpus from Addl Contribution 620730 Benefit as per Old scheme Addl Benefit

Total Corpus on date of VRS 6256905 3530262 2726643

Pension without commutation (Scheme) 47190 26625 20564

1/3 Commutation 2085635 1176754 908881 Balance Pension under Scheme "E" 31460 17494 13966

Sample calculation of total Benefit (DoR Apr 2016)

Date of joining ONGC 29/06/1983

Date of joining PRBS Scheme 01/04/1990 6.761644

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

6.2130

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x F.S.

19.39295865

Total reckonable service as on 01.01.2007 25.6060

Basic on 01.01.2007 62020

PRBS Pension as on date of superannuation 24062

Corpus as on date of superannuation 3190360

Date of Superannuation 30/04/2016

Fund reckoning Date 31/03/2012

Corpus Discount Years 4.08

Discounted corpus value as on31.03.2012 2202094

(Actual corpus to be

transferred to Individual's

Pension account

Corpus transfer date 31/03/2012 0

Appreciated corpus value as on DoR 3073009

Revised Benefit Benefits as per old scheme Addl Benefit

Corpus from Past scheme (PRBS) 3073009 3679136

Corpus from New Scheme (DCPS) PROJECTED 2116982 0

Corpus from Addl Contribution (PROJECTED) 588743 0

Total Corpus on date of VRS (PROJECTED) 5778734 3679136 2099598

Pension without commutation (Scheme) 43583 27348 16235

1/3 Commutation 1926245 1226379 699866

Balance Pension under Scheme "E" 29056 18232 10824

Sample calculation of total Benefit (DoR Feb 2021) Date of joining ONGC 04/03/1985

Date of joining PRBS Scheme 01/04/1990 5.079452

Date of Closure of PRBS 01/01/2007 16.76438

Reckonable past service (1-PS*1.2/100)*PS

4.7698

Escalated future service till 01.01.2007 (1+F.S. x 0.6/100) x F.S. + 0.0002 x F.S. x F.S. x

F.S.

19.39295865

Total reckonable service as on 01.01.2007 24.1628

Basic on 01.01.2007 61570

PRBS Pension as on date of superannuation 22541

Corpus as on date of superannuation 2988706

Date of Superannuation 28/02/2021

Fund reckoning Date 31/03/2012

Corpus Discount Years 8.92

Discounted corpus value as on31.03.2012 1330110

(Actual corpus to be

transferred to Individual's

Pension account

Corpus transfer date 31/03/2012 0

Appreciated corpus value as on DoR 2753851

Revised Benefit Benefit as per old scheme Addl Benefit

Corpus from Past scheme (PRBS) 2753851 5298762

Corpus from New Scheme (DCPS) (Projected) 6593641 0

Corpus from Addl Contribution (Projected) 2103117 0

Total Corpus on DoR (PROJECTED) 11450609 5298762 6151847

Pension without commutation (Scheme) 86361 39387 46974

1/3 Commutation 3816870 1766254 2050616

Balance Pension under Scheme "E" 57574 26258 31316