Tuesday, July 26, 2016

Let's not despair, let's act..

असतो मा साद गमय, तमसो मा ज्योतिर् गमय...
Asatoma Ma Sad Gamaya, Tamaso Ma Jyotir Gamaya..
Lead us from ignorance to truth, lead us from darkness to light..

Sarvashri RR, CHM, Namdev and host of learned others have enlightened on Pension Liability and related matters.

As everyone is aware, Rules 5(3) and 13(b) of LIC (Employees) Pension Rules. 1995, deal with the Pension Fund. In short,

Rule 5 (1) The Corporation shall constitute a Fund to be called the Life Insurance Corporation of India (Employees) Pension Fund under an irrevocable trust within a period of one hundred and twenty days from the notified date. (2) The Fund shall have for its sole purpose the provision of the payment of pension or family pension in accordance with these rules to the employee or his family. (3) The Corporation shall be a contributor to the Fund and shall ensure that sufficient sums are placed in it to enable the trustees to make due payments to beneficiaries under these rules

Rule 13 (b) the trust shall, subject to the availability of additional sums in the Fund, to be provided by the Corporation as required under rule 5 (3) purchase additional annuities as and when it becomes necessary to revise upwards the benefits payable in accordance with these rules; (c) the trust shall, in the event of the benefits payable under these rules being revised downwards for any reason whatsoever, credit the benefits received from the Corporation under the annuities purchased as exceed the benefits payable under these rules, to the Fund.

Shri RR has clarified that once a certain quantum of pension benefit ( updation) is agreed upon, the liability in respect of pension payable will have to be made as per Pension Rules.

LIC is a mighty institution. It has the capacity to pay increased wage bills of working employees once in five years. It has capacity to pay 100% DR to 30,000 plus pensioners retired in Aug.1997 and subsequent pay scales. It has capacity to pay higher and higher pension to every pensioner retired in the revised pay scales. It is incredible that the institution cannot make provision for 100 % DR to 20,000 plus pre Aug. 1997, pensioners and for updation of pension. Some time back. LIC has provided Rs.3500 crore to Contingency Reserve Fund from surplus available for distribution between the shareholders and policy holders.

The Pension Fund position has been on the increase over the years and the LIC has been providing as per the " requirement" as revealed by the Annual Reports of 2013-14 and 2014-15. 

As stated by Shri CHM, the foremost must be on the mind of our Case Managers and the Counsellors is to win the cases in the Delhi High Court. Equality .. Articles 14, 16 , 21.... of the Constitution of India.....All this has been explained on several occasions by Shri Mahadevan.

What may be the quantum of arrears to be paid to 50,000 pensioners? It is definitely going to be a big amount. If the amount of arrears is taken on an average of Rs.0.30 Cr. per pensioner, the total works out to Rs.15,000 Cr. (50,000 x 0.25). It may be around Rs.21,000 Cr., if pension option is reopened for the benefit who did not opt for pension.

Here, I would like to recall what GOI did while implementing the 6th CPC recommendations. It paid the pay and pension arrears to its employees and pensioners in two instalments; 40% arrears were paid 2008-09 and 60% arrears in 2009-10.

Where there is will, there is way.

SN (a 1992 Pensioner)