Introduction

India's government departments employ numerous Assistant Enforcement Officers (AEOs) who play a crucial role in environmental, legal, and regulatory compliance. In this article, we will explore the retirement benefits and provident fund for an AEO who completes 30 years of service as a Promoter Officer. We aim to provide a detailed breakdown of the emoluments an AEO can expect upon retirement.

Assumptions for the Calculation

To simplify the calculations, we have made the following assumptions:

The officer joins service at the age of 23 years on 31st Dec 2016 and retires at age 60 with a total of 37 years of service. Basic salary at the time of joining was INR 56,100, which increases to INR 250,000 by the time of retirement. There are no future Cost Parameter Commissions (CPC). The Dearness Allowance (DA) is fixed at the existing rate of 2 throughout the service period. The officer has not availed of House Rent Allowance (HRA) and has been provided accommodation by the government. The officer has not opted for any deputation, hence not eligible for deputation allowance. Income-tax slabs and rates remain the same, and the officer has maxed out on tax exemptions (80C and 80CCD). The officer has undergone regular promotions and pay increments as per existing guidelines. NPS contributions are invested in the default fund option, generating a Compound Annual Growth Rate (CAGR) of 9%. The inflation rate is fixed at 5% from 2017-2069. The officer’s life expectancy is considered to be 75 years.

Calculation of Retirement Benefits

Based on the above assumptions, the calculations for retirement benefits are as follows:

In-hand Salary Over 37 Years

The total in-hand salary received over the next 37 years would be INR 53,853,876. When adjusted for inflation, the equivalent value is INR 21,783,732.

Employee Contribution to NPS

The employee's contribution towards the National Pension Scheme (NPS) would be INR 67,82,400 (approximately 68 lakhs).

Accumulated Pension Fund

The accumulated pension fund, including future growth, is estimated at INR 72,461,497. This amount, when adjusted for inflation, is worth approximately INR 11,915,252.

Lump-sum Pension Amount

The lump-sum pension amount receivable at the time of retirement would be approximately INR 4.34 crores.

Earned Leave Encashment

The earned leave encashment is 10 times the last drawn BasicDA, equaling INR 25,50,000.

Gratuity

Gratuity, as per the amount defined, would be approximately INR 20,00,000.

Total Retirement Benefits

The total amount receivable on the last day of retirement in 2053 includes both the lump-sum and the monthly pension:

Total lump sum amount: INR 46,22,6898 (approximately 46 crores) Monthly pension from Annuity: INR 21,0138 (approximately 210,000 INR annually or 18,000 INR monthly)

When adjusted for inflation, the present value of these benefits is approximately INR 7,601,349.

Conclusion

These figures represent the lower limit of in-hand salary and pension fund. Additional CPCs and DA increments are expected over the years, providing further benefits. For more detailed information on the CTC, monthly in-hand salary, and perks of being an AEO or an IES officer, refer to the links shared below:

What is the CTC of an IES officer What is the salary of an IES officer What are the perks of being an IES officer