Public Sector General Insurers Announce Wage Revision with Enhanced Benefits

In a major development for the insurance sector, the Government of India has approved a long-awaited wage revision for employees of Public Sector General Insurance Companies and their subsidiaries, effective from August 1, 2022. The decision benefits employees of NICL, NIACL, OICL, UIICL, GIC Re, and AICIL- collectively known as GIPSA member companies. This revision comes after extensive discussions and several rounds of meetings between GIPSA (General Insurers’ Public Sector Association of India) and employees’ unions, marking an important milestone in employee welfare and industry reform.

Public Sector General Insurers Announce Wage Revision

The Wage Revision 2025 marks a significant step forward for employees of public sector general insurers. It not only enhances their salaries and benefits but also aligns their pay structure with the evolving market standards seen in other public sector financial institutions. This move reflects the government’s continued commitment to improving the welfare and motivation of employees who play a crucial role in strengthening India’s insurance ecosystem.

Public Sector General Insurers Announce Wage Revision: Download PDF

Wage Revision Highlights

The wage revision has introduced several financial and structural benefits that align with current market practices and mirror the standards of LIC employees. The key highlights include:

• 100% Dearness Allowance (DA) Neutralization as on 31 July 2022.
• 14% increase in basic pay, calculated after DA neutralization of 42.08%.
• Revision of allowances such as HRA, CCA, Transport Allowance, and Medical Benefits.
• Full payment of arrears from 1 August 2022.
• Family pension at a uniform rate of 30%, replacing the existing slab-based system.
• Employer’s contribution to NPS increased from 10% to 14%.

Improved Family Pension and Retirement Benefits

One of the most notable reforms in this wage revision is the uniform 30% family pension, which replaces the earlier tiered system of 15%, 20%, and 30%. This change aligns GIPSA companies with the Central Government, LIC, and PSU banks, ensuring greater fairness and stability for over 14,000 family pensioners.

Additionally, the increase in the employer’s NPS contribution from 10% to 14% strengthens post-retirement security and aligns with the benefits extended to other public sector employees.

Revised Allowances at Par with LIC

Allowances have been broadly aligned with LIC standards, covering a wide range of employee welfare measures. These include:

• House Rent Allowance (HRA) ranging from 7% to 10% of pay.
• City Compensatory Allowance (CCA) is between 2% and 3% of pay.
• Transport Allowance revised up to ₹3,300 for Class I employees.
• Hill Station Allowance, Medical Benefits, and Special Functional Allowances updated for fairness and inflation adjustment.
• Kit Allowance, Technical Qualification Allowance, and Cashier Allowance also revised significantly to match current cost structures.

Implications on Employees in FY 2025–26

Employees of Public Sector General Insurance Companies will see a significant rise in take-home pay during FY 2025–26, following the implementation of the new wage revision effective from August 1, 2022.

• The 14% increase in basic pay along with 100% DA neutralization ensures better salary alignment with inflation and current market trends.
• Arrears for 38 months (from August 2022 to September 2025) are expected to be released this year, resulting in a substantial one-time payout for employees.
• The increase in the employer’s NPS contribution from 10% to 14% will boost employees’ long-term retirement savings and overall financial security.
• Revision of the family pension to 30% strengthens post-retirement support for employees’ families and ensures parity with other public sector institutions.
• The revised pay structure will lead to higher annual earnings in FY 2025–26, providing employees with enhanced disposable income and improved financial stability.
• Overall, this wage revision makes FY 2025–26 a financially rewarding year for employees in the general insurance sector, promoting greater motivation and satisfaction across all GIPSA member companies.