CGEGIS IN 7 CPC-NEED MAXIMUM BENEFIT TO CENTRAL GOVT EMPLOYEES

CGEGIS was a scheme which was started especially for the central government employees. It has been in force since January 1, 1982. In this scheme, 70% of the amount deducted from the employees' salary is calculated as savings and 30% as insurance premium.

The savings alone (with interest) is given back to the employees when he/she retires. But when an employee passes away, along with the savings he/she would also get the insurance amount.

Until the 6th CPC, a meagre sum of 30, 60,120 per month were deducted. See below table.

Table 1: Present Rates of CGEGIS

Group	Monthly Deduction	Insurance Amount	No. of Units (for savings)
A	120.00	120000.00	8
B	60.00	60000.00	4
C	30.00	30000.00	2

However, in its recommendations the 7th CPC has suggested that 1500, 2500 and 5000 has to be deducted. This is no doubt a welcome change.

See below table

Recommended Rates of CGEGIS

Level employee	Monthly Deduction	Insurance Amount
10 and above	5000.00	5000000.00
6 to 9	2500.00	2500000.00
1 to 5	1500.00	1500000.00

These days, many insurance companies have introduced Term Insurance plans. In such schemes even for a small premium amount, the policyholder gets coverage for a bigger sum. But the premium paid will not be returned.

The central government can keep 70% of the savings amount with itself. It could have tie-ups with insurance companies that provide maximum coverage, invest the remaining 30% with them and try to provide more benefits to the employees.

This will not only make the job of the central government easier but it will also benefit the families of the central government employees.

At the same time, as implemented in the GPF, the Central Government can give loans to employees when they have an urgent need from the 70% amount that it manages. This will make the employees (joined after 1/1/2004) in the NPS scheme extremely happy.

The CGEGIS can be improved further and the private companies to whom the 30% amount is handed over could be urged to include CGEPHIS plan too within the amount.

Despite such terms, no private company will be ready to lose the large community of central government employees comprising of one crore policyholders (45 lakh employees and 55 lakh pensioners).

For the private insurance companies, the community is a duck that lays golden eggs. Getting more benefits for the money paid by the central government employees has to be the aim.