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Tuesday, June 30, 2015

Erratic thoughts

Mr  Subburathinam’s questions.
  1. Is there any actuary who can guide us as to present value of the future arrears on upgradation? I thought I could pledge this and get my old house repaired.
My answer:

There  are plenty of actuaries available if we need.

First we will have to tell the actuary what are the future arrears on upgradation. For that, we have to wait for the Supreme Court judgment after 23/9/2015.

Secondly, if the method of calculation of future arrears is clear from the judgment of the Supreme Court, we will have to give the amount of arrears payable in respect of any pensioner and give the expected date of payment as also the date on which the present value is to be calculated.

If all the required data are available as above, there will be no need to refer to an actuary as we will receive the arrears immediately.

Thirdly, for all monthly instalments of enhanced pension if any in future, the present value can be easily found by multiplying the total basic pension ( excluding commuted pension if not restored) by the commutation factor  given in the LIC Pension Rules , 1995 applicable for the age next birth day.
So, in any case we need not trouble an actuary for the purpose and only need to wait for a favourable judgment from the Supreme Court with fervent prayers.
  1. Pending the outcome of the cases in SC, why not LIC come forward with a scheme of reverse mortgage of the property (here, the present value of the amount of arrears payable to all pensions.) Hope LIC would  have provided for this as an anticipated liability.
My opinion:

The Supreme Court judgment will be delivered sooner than LIC coming forward with a scheme of reverse mortgage of the property.
When LIC has not recognized the liability, where is the question of anticipated liability?
  1. When will 23rd Sep come? Every Year it comes, my dear Ganga Raju. Better Ask when the Final End Come will > I mean, for the cases in SC.
My answer:

Come September, 23rd September will definitely come. For the last question, even the Supreme Being may have no answer!


With greetings, C H Mahadevan