This is not a new phenomenon. Such a reduction takes place after every wage revision for those who retired after the effective date of wage revision.
Once a retiree opts to
receive the difference in CV of 1/3 rd pension, naturally The logic is
that the retiree can get a reasonable return if he invests the CV
difference in a safe investment. So the reduction in the monthly net
pension will be offset by the investment yield. Many of us overlook the
fact that if a retiree dies before completing age 65,our pension rules
provide for payment of family pension at twice the rate of family
pension indicated in the Appendix on rate of FP or half of the regular
pension(whichever is less) till such time as the retiree would have
completed 65 years if he had survived. This is in addition to the
difference in CV due to the retiree on the date of retirement. There
will be no monthly recoveries towards commuted pension after the death
of the retiree. These are all issues based on the actuarial
principles adopted while deciding on CV payable to retirees based on
life contingencies. There can be no legal remedy for this. But the in-
service Associations/Federations -if they wish-can bargain with the LIC
Management for payment of interest on CV difference, because the CV
factors are actuarially constructed by factoring a compound rate of
interest. When arrears are paid CV difference due on the date of
retirement is being paid with a delay of over 3 years there is
justification for payment of interest. In service Federations may not be
interested in bargaining for this and retirees' Federations are ignored
during wage revision negotiations.
Incidentally, I understand
that DA merger for wage revisions from 1/11/2002 was done at 4440
points whereby the number of slabs merged were less by 67 than the
slabs as on 1/11/2012.In effect the merger of DA was only as at
1/11/2011.If they adopt Bank pattern for LIC wage revision, they may
only merge the DA as at 1/8/2011 and factor a negotiated fitment
weightage(increase of say 15% on wage bill component).
For
your query, my reply is that retirees from your category should opt for
not receiving commuted pension difference if they do not want reduction
in net monthly pension. Otherwise, they should be prepared to receive
whatever LIC gives and enjoy available benefits.
The caveat here is that all the above issues will only arise after the wage revision is finalized by LIC/GOI.
Kind regards.
C H Mahadevan
K Madan Mohan Rao wrote:
Respected Sir,
Namaste. I am very much thank full for up dating the latest information about pensioners in spite of your busy schedule in U.S.A.. Sir it seems that G.O.I is insisting LIC Management to submit wage revision proposals due from 01/08/2012 as per bank pattern, of course all unions which formed joint front are opposing , but we do not know how far they will succeed. If the bank pattern is accepted we the pensioners retired after 01/08/2012 will get reduced pension between Rs 2500/- to Rs 5000/- per month .Unfortunately UFBU accepted I.B.A proposals and UFBU leaders are compensating decreased pension with increased Commutation . How far it is justified sir and is there any way to oppose and approach court of law for justification.
K.Madan Mohan Rao
Namaste. I am very much thank full for up dating the latest information about pensioners in spite of your busy schedule in U.S.A.. Sir it seems that G.O.I is insisting LIC Management to submit wage revision proposals due from 01/08/2012 as per bank pattern, of course all unions which formed joint front are opposing , but we do not know how far they will succeed. If the bank pattern is accepted we the pensioners retired after 01/08/2012 will get reduced pension between Rs 2500/- to Rs 5000/- per month .Unfortunately UFBU accepted I.B.A proposals and UFBU leaders are compensating decreased pension with increased Commutation . How far it is justified sir and is there any way to oppose and approach court of law for justification.
K.Madan Mohan Rao