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For Central Government employees, the Department of Expenditure (DoE) of the Ministry of Finance has issued an important order regarding the Central Employees Group Insurance Scheme i.e. CGEGIS-1980 (Central Government Employees Group Insurance Scheme). The new ‘Table of Benefits’ of the Savings Fund has been made effective for a period of 3 months based on the 7.1% annual interest rate (Compounded Quarterly) decided by the Department of Economic Affairs.
The release of this new calculation table will directly benefit all those central employees who are retiring, resigning or whose service is ending due to any reason during this quarter.
What is CGEGIS plan and how is your monthly premium divided?
Central Employees Group Insurance Scheme-1980 is completely a ‘self-financing’ and ‘contributory’ scheme with the dual objective of providing life insurance cover to employees at very low cost and returning a lump sum savings amount on termination of service:
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Split into two parts (70:30 ratio): Of the total monthly premium deducted from the employee’s salary 30% share Insurance Fund Which provides financial security to the family in case of unexpected death during service.
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70% Savings Fund: the rest 70% share savings fund Deposits are made in Rs, on which compound interest is added quarterly at the rate notified by the government (currently 7.1%).
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Payment on Retirement: On completion of service or retirement, the employee is paid a lump sum of the entire accumulated amount (including interest) of this 70% savings fund.
Group-wise monthly deductible and current structure of insurance cover
The contribution rates and units fixed for different groups under the pay matrix of the 7th Pay Commission are as follows:
| Cadre / Group | Monthly Premium Deduction (Subscription) | Insurance cover under the scheme |
| Group ‘A’ (Group A Officers) | ₹120 per month (8 units) | ₹1,20,000 |
| Group ‘B’ (Group B Gazetted/Non-Gaz.) | ₹60 per month (4 units) | ₹60,000 |
| Group ‘C’ (Group C Employees) | ₹30 per month (2 units) | ₹30,000 |
| Group ‘D’ (Group D – where applicable) | ₹15 per month (1 unit) | ₹15,000 |
(Note: The rate of ₹15 per unit is applicable from 1 January 1990. For employees who joined before 1990 and opted for the old system, a separate calculation chart of ₹10 per month is applicable).
How will your money be settled with the new table with 7.1% interest?
This quarterly table prepared by the Insurance Regulatory and Development Authority of India (IRDAI) records the accumulated value per unit according to the year of entry and month of cessation of service of the employee:
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Importance of service year: If an employee started employment in 1990, 2000 or 2010, a fixed value per unit is fixed in the table for the corresponding month of 2026 with 7.1% compounding interest.
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Total Payment Formula:
$$\text{Total Savings Refund} = \text{Amount per unit entered in the table} \times \text{Total units of the employee’s group}$$
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Example: If a Group-A officer is retiring (who holds 8 units) and the accumulated value per unit as per the table becomes ₹45,000, he will get a lump sum savings fund payment of ₹3.60 lakh ($45,000 \times 8$).
Instructions will also apply to audit and accounts departments
According to the official memorandum of the Department of Expenditure, these orders have been promulgated under Article 148(5) of the Constitution in consultation with the Comptroller and Auditor General of India (C&AG) in respect of employees working in the Indian Audit and Accounts Department (IA&AD).
Drawing and Disbursing Officers (DDOs) of all Central Ministries, Railways, Defence, Posts and Autonomous Bodies have been directed to settle CGEGIS claims of all employees retiring in the current 3 months only on the basis of this updated table so that the employees get accurate and prompt payment of their savings funds.