8th Pay Commission: Central Govt Employees Seek Higher Insurance Cover Under CGEGIS

As consultations for the 8th Pay Commission continue, central government employees and their associations are seeking changes not only in salaries and allowances, but also in the insurance protection available under the Central Government Employees Group Insurance Scheme (CGEGIS). Employee unions have argued that the insurance cover under CGEGIS has not kept pace with inflation, rising household expenses, and changing financial needs. As such, they are now seeking a substantial increase in the insurance amount as part of the Pay Commission’s recommendations.

What Is CGEGIS?

CGEGIS is a contributory scheme introduced in 1982 to provide two benefits to central government employees: insurance protection for their families in case of death during service, and a savings component that provides a lump sum at retirement. Monthly contributions are deducted from employees’ salaries and allocated between the insurance and savings funds. The scheme’s existing contribution and insurance structure dates back decades.

The insurance cover and subscription rates were last revised as of January 1990. Under the rates recorded by the CAG, employees in the erstwhile Group A category had an insurance cover of Rs 1.20 lakh, while Group B and Group C had Rs 60,000 and Rs 30,000 respectively, according to a report by Livemint.

The issue has also been raised in previous discussions on employee benefits. The 7th Central Pay Commission had recommended substantially higher CGEGIS coverage. It had proposed insurance amounts of Rs 50 lakh, Rs 25 lakh, and Rs 15 lakh for employees in Levels 10 and above, Levels 6 to 9, and Levels 1 to 5, respectively.

What Are Employees Demanding?

Different employee organisations have proposed different revisions. The Federation of National Postal Organisations (FNPO) has sought insurance cover of Rs 1 crore for Group C, Rs 1.50 crore for Group B, and Rs 3 crore for Group A employees along with higher monthly contributions.

As an alternative, it has proposed revising the insurance slabs recommended by the 7th Pay Commission to reflect current salary levels. Another proposal from FNPO is to alter the allocation between insurance and savings. It has suggested a 70:30 ratio for insurance protection, and an automatic 25 per cent increase in insurance cover whenever dearness allowance (DA) crosses 50 per cent.

As consultations progress, CGEGIS is expected to remain an important issue for central government employees seeking insurance protection that better reflects present-day financial requirements.