‘PROTECTION’ FOR NEGATIVE ARREARS FOR A FEW CADRES CANNOT RENDER JUSTICE
TO ALL PRE-AUGUST 1997 RETIREES
I *attach a write-up referring to the Office Note prepared by LIC Central Office Personnel Dept on 18/9/2001 with remarks/recommendations/decisions by the Chairman as a precursor to the LIC Board Meeting held on 24/11/2001.
LIC was very much
aware that the formula proposed for upgradation
on 1/8/1997 was anomalous as negative values resulted in a few cadres from
Record Clerks down to the Sweepers .Surprisingly this fact does
not find a mention in the LIC Board
Resolution and LIC has merrily adopted
their proposed formula right from the time the illustrative chart
was submitted to the Board, subsequently sent to the Joint Secretary (Insurance) on
31/12/2001 and also in an updated illustrative
chart sent on 11/8/2003 with calculations as at 1/8/2003 to Mr G C Chaturvedi,Joint
Secretary(Banking & Insurance).
The focus of LIC
Management has all the time been merely on the 100% DR neutralization without removal
of the pre-August 1997 DR anomaly and on a half-hearted upgradation on 1/8/1997 WITHOUT
REMOVAL OF DR ANOMALY FROM 1/11/1993 AND WITHOUT THE WEIGHTAGE DECIDED UPON BY THE LIC BOARD ON 24/11/2001.
It took Jaipur Bench
of Rajasthan High Court to take serious cognizance of the DR anomaly and come
out with its judgment on 12/1/2010 to not only remedy this situation, but also
allowing upgradation of pension. But LIC has continued to play its dubious game of
selective misinterpretation of the Board Resolution without explicit reference to the three High
Court judgments in favour of pensioners, for which stay was refused by the Apex
Court. This has been corroborated by a
few pensioners who have received unidentified
credits to their bank accounts from LIC ostensibly in compliance of the Supreme
Courts orders dt 7/5/2015 & 7/9/2015 for payment of
interim relief to respondent-pensioners.
We have also known convincingly how there will be negative
arrears for every family pensioner of a deceased pre-August 1997 retiree if LIC
continues to follow their usual method
of upgradation of pension for pre-August 1997 retirees.
Hopefully the game
being played by LIC will get exposed before the watchful eye of the Supreme
Court Bench today, and if not today, sooner than later.
Greetings.
C H Mahadevan
*Click 'read more' below.
*Click 'read more' below.
FLAW IN LIC’s APPROACH
ON UPGRADATION AND 100% DR NEUTRALISATION
I was just
going through the Office Note of CO Personnel Dept by Assistant Secretary(ER)
on 18/9/2001.
Under the
second para entitled “Upgrading of basic pension to AICPI 1740 and 100% DA Nneutralisation
thereon:-“it has been stated,
…………”At
present,there are 3 separate groups of pensioners,the Dearness Relief to whom is
paid from different base levels of AICPI and at varying rates.Ther is a
need to rationalize the structure to to
reduce the administrative inconvenience
and also to see that different generations of pensioners are
protected by uplifting the pension to a
suitable index point.It may be pointed out
that the Central Civle Service Pension Rules(on which our Pension Scheme
has been broadly designed) contains such an upgradation formula
corresponding to Wage Revisions effected
for Central Government employees.As
the cost implication is not much ,it is
suggested that we may accede to the
demand and upgrade the pension payable in relation to AICPI 600 points and 1148
points respectively by merging the
Dearness Relief payable upto the level of 1740 points . On the pension so
upgraded,Dearness Relief of 0.23% shall be paid over every 4 points rise
or fall from 1740 points.An illustrative
chart is placed below showing the
method of merging and the benefit that would be available due to the upgradation.The calculations are based on maximum pension linked to AICPI 1148 points available in the respective cadres. It will be seen from the chart that the upgradation in case of RCs and below is giving a negative figure, which will
require protection.This suggestion will
affect all Pensioners who have retired
prior to 1/8/1997. The amendments may be made effective
from the date of notification and we
should make it clear in the Rules that no commutation value due to increase in Pension shall be payable.
If the above proposals are
approved,we may seek the approval of the
Boarg.After receiving the Board approval ,the matter shall be referred to
the Government for amendment to
the LIC(Employees)Pension Rules,1995.
Submitted.
(J .Sen)
ASSISTANT SECRETARY
(ER)
18.09.2001”
Chief(P): (1)The cost of
allowing one more option appear to be prohibitive at this juncture.We may
wait for the valuation of the fund as on 31/3/2001.
(2)We may consider upgradation of basic pension to AICPI 1740 and 100% DA Neutralisation thereon as has been submitted by AS(ER)at’x’
above.
Initialed
19/9
(1) &(2) above may be approved.
Initialed 20/9/2001
Executive Director(Pers)
MD We may
seek the approval of the Board to bring the basic pension to AllIndiaConsumer Price Index 1740 level
and thereafter pay 100% DA
neutralization.The cost implication is not much.We may give effect to this from the date of notification.
24/9/01
Chairman 1.We had written to Govt which I
believe was ..again obtaining Board’s approval .Kindly check up and put up.
2. As regards one more
option,I agree, ( w.r.t. para no 1 of the Note)
Recd 5/10
Re-submittedL1) As regards the updation of Pension
to AICPI 1740 points of index,Chairman
may kindly recall the discussion with both MDs,ED(Actuarial),ED(P),
wherein it was decided
to first take up the matter with
our Board and subsequently with the Govt .after Board approval.As regards
another option we have written to Govt
.in Dec’99(FlagX)
(2)We have not approached
the Board or Govt. for this
purpose of upgradation of pension earlier.The Board Note placed below
may kindly be approved.
AS(ER)
11/10
1) Board
note for upgradation of pension may be approved
2) We had written to Govt.reg another
option in Dec’99.We may evaluate the fund position on 31/3/2001 and then decide
in the matter.
Executive Director(P)
11/10/2001
Managing Director - Chairman
may kindly approve the Board note
13/10/01
Chairman-Approved
22/10
Recd 22/10
C(P)
Please arrange for next board meeting
23/10
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Perhaps
considering the point raised by the
AS(ER) that the method of calculations
yield a negative value for RCs,LIC Board
in the meeting had decided in its
meeting dated 24/11/2001 that the
Board had recorded, ”
The Note is in line with the demands made by the Federation, viz., giving
effect to the proposal from 1.11.1993 and upgradation by giving weightage of
11.25% as in the case of in service employees. Chairman pointed out that these have been considered before placing
the matter to the Board and it was felt that the same would increase the
financial burden very substantially and may be unaffordable for the
Corporation. Chairman pointed out that the implications of the proposal made
have been actuarially determined at Rs.51.37 crores and the annual outlay be in
the region of 6 to 8 crores. After some discussion the Board approved the
proposal and suggested that it should be implemented prospectively and after
obtaining Government
approval.”
Thus reading the LIC Board Resolution in conjunction with the
office note submitted by AS(ER) on 18/9/2001,one can clearly conclude that what
Board had in mind was upgradation with
11.25% weightage after merger of DR with basic pension.
But again an illustrative chart was prepared by the CO Personnel Dept and sent to Shri G C Chaturvedi ,Joint
Secretary(Insurance and Banking )under cover of
their letter dt 11/8/2003, where
again negative values were noticed for difference of pension of RC,Driver,Peon
and Sweeper as at 1/8/2003.
Thus it is clear that the method followed by LIC for
calculating ‘dues’ to retiree-pensioners and the corresponding interim relief
is flawed and needs rectification.
The so called ‘protection’ to the above four cadres
cannot be provided in isolation except by the wholesale rectification of the
method of upgradation.That will be possible only by;
1) Removal of DR anomaly for the period from 1/11/1993 to 31/7/1997 by
making the DR formula uniform for in-service and retired employees;
2) Providing weightage as in the case of in-service employees after
merger of the rectified DR with Basic Pension on 1/8/1997 and revising the
pension on 1/8/1997;
3) Repeating the step 2) on 1/8/2002, 1/8/2007
and all future wage revision dates.
No doubt the
Board Resolution arose in the context of anomalies faced by pre-August 1997
retrirees.But once the above three steps
are followed,LIC perforce will have to
follow them for all pensioners-whether pre-August 1997 or post-July
1997.
Let us hope
that these facts will be highlighted before the Supreme Court in the final
hearing.
Greetings.
C H
Mahadevan