Section 3 in The Orissa Local Fund Service (Pension) Rules, 1980
3.
These rules shall apply to employees of the Municipalities and Notified Area Councils who come under Local Fund Service constituted under Sub-rule (1) of Rule 3 of the Orissa Local Fund Service Rules, 1975 :Provided that the employees who were in 'service' on the thirty first day of August, 1976 shall have the right to exercise their option in writing to the Director through the Executive Officer of the concerned Municipality or Notified Area Council within a period of 30 days from the date of commencement of these rules, either to continue in the retirement benefits admissible under Orissa Municipal Rules, 1953 or to come over to the pension scheme under these rules.(2)[ Notwithstanding anything contained in these rules, all persons appointed under the Municipal Corporations, Municipalities and Notified Area Council (Local Fund Service) with effect from 1st day of January, 2005 shall not be eligible for pension, but shall, be covered by the defined contribution Pension Scheme as specified below :(i)The monthly contribution would be 10% of the Basic pay and Dearness Allowance to be paid by the employee and the Urban Local Bodies would also provide an equal matching contribution. The contribution so made would be deposited in a non-withdrawable pension tier-I account. Such funds will be invested by Pension Fund managers as approved by Pension Fund Regulatory and Development Authority (PFRDA) under different categories of Scheme which would be a mix of debt and equity.The fund managers would given out easily understood information about the performance of different investment schemes so that individual Municipal Employee would be able to make informed choices about which scheme to choose.(ii)The respective Urban Local Bodies shall bear the necessary financial liability on this account for both LFS and Non-LFS categories of employee of their organisation and the Government shall not be responsible in any manner, whatsoever, the required contribution/ matching contribution on behalf of the employer in this connection shall be completely borne by the Urban Local Body concerned.(iii)At the time of retirement, the employees serving under the Municipal Corporation, Municipalities and Notified Area Council (Local Fund Service) will receive the lump sum amount of 60% deposited in pension tier-I account as pension wealth and it is mandatory to the Municipal employee to invest remaining 40% of his pension wealth to purchase an annuity from an Insurance Regulatory and Development Authority regulated Life Insurance Company. The annuity shall provide for pension for the life time of the employee and his defendant parents and his spouse at the time of retirement. The individual would receive lump-sum of the remaining pension wealth, which he would be free to utilise in any manner. Individual would have the flexibility to leave the pension system prior to age of 58 years or 60 years as the case may be. In such case mandatory annuitisation would be 80% of the pension wealth.]
