Sunday, March 27, 2016

Mr B R Mehta's post on DA Parity & 20%

I refer to the above post by Mr B R Mehta. It is true that 100% DR neutralisation was not the prayer in 1997 when the WP was  filed originally by Mr K M L Asthana as I understand..The prayer was only to remove the disparity arising out of taking 50% of average emoluments for fixing pension  and again slashing the tapering slabs by 50%  for the purpose of calculating the DR.The  prayer for 100% DR neutralisation was made only in the Class I Retirees' Federation's  WP in Delhi HC filed in 2007,if I remember right. But as and when time elapsed with another WP 654/2007 filed in Jaipur Bench,the prayer for removal of DR disparity gained strength with the Jaipur Bench allowing the first WP with the prayer that the DR formula cannot be different from that for in-service employees, which principle was followed for employees who retired after 1/8/1997 and that principle enjoined 100% DR neutralization as well for the retirees after the 2000 wage revision notification w.e.f 1/8/1997. There was no question of 100% DR Neutralisation either for in-service employees or retirees before 1/8/1997.

Ironically, when Jaipur Bench  allowed the petition  to remove the DR disparity and directed LIC to implement the Board Resolution, LIC instead of recognizing that the LIC Board Resolution had in fact decided that DR disparity should be removed for pre-August 1997 retirees and pension should be upgraded with weightage of 11.25% as was done in case of in-service employees, chose to only merge the existing anomalous DR with the existing Basic Pension as at 1/8/1997 that too  without providing the weightage when it was  directed  to deposit the amounts due to the petitioners at Jaipur & Chandigarh.This was also done as an one-time process of revision instead of consistently adopting the method followed on 1/8/2002 and subsequent wage revision dates.

Such an act on the part of LIC resulted in the revised pension being less than what the existing gross pension would have been if only LIC had simply removed the DR disparity without any upgradation.LIC's Board Resolution could not have been intended to provide a disadvantage to the affected pensioners instead of  paving  way for improvements in pension.If pension for pre-August 1997 retirees had to be only revised through the method followed by LIC for their court deposits,it only proves that the Board Resolution had been grossly distorted in interpretation by LIC. Implementation of LIC Board Resolution has no meaning if (1) DR anomaly is not removed from 1/11/1993 or the date of retirement whichever is later; (2) Merger of the correct DR is not done with weightage on 1/8/1997 with repetition of the process  on every  wage revision date for the pre August 1997 retirees.If (I) &(2) above are taken care of  upgradation of pension on OROP will result.

Once this is ensured, then perforce,LIC will have to upgrade pension for post July 1997 retirees on a similar basis.This is where the correct 20% determination of IR becomes very relevant

I have dealt with the above points  ad nauseum in many of my earlier writings and thought it proper to reiterate them   in addition to clarifying  the point raised by Mr B R Mehta.

C H Mahadevan