COMMON MEMORANDUM ON PENSIONERS & OTHER RETIREMENT BENEFITS
BHARAT CENTRAL PENSIONERS
CONFEDERATION
13-C,Ferozshah Road, New
Delhi-110 001
Mobile No. 9868244035
Dated
20th June, 2014
To
All
Pensioners Organisations.
Dear Comrade,
Attached
herewith is the final draft of Memorandum on Pension and other Retirement
Benefits to be submitted to the VII CPC by 30th June, 2014.
All modifications etc., agreed to in the
Chennai meeting have been incorporated in this draft.
If
you have any comments to offer, please send these comments via the e-mail i.d.,
mentioned below.
or
We have not included departmental
specific issues like RELHS/BSNL etc., in this common draft.
Concerned organizations in Railways,
Postal, Defence and others may submit Part II of the memorandum on the
departmental specific problems latest by 31-07-2014
With greetings,
Comradely
yours,
S.K.
Vyas
Secretary
General
MEMORANDUM ON PENSION AND OTHER RETIREMENT BENEFITS
CHAPTER – I
Introduction\
The Government of India, Ministry of Finance, Department of
Expenditure, Resolution No.1/1/2013-EIII(A) dated 28th February, 2014 in its
Para 2(f) has included the following terms of reference of the 7th Central Pay
Commission:
“(f) To examine the principles which should govern the structure
of Pension and other retirement benefits, including revision of pension in the
case of employees who were retired prior to the date of these recommendations,
keeping in view that the retirement benefits of all Central Government
employees appointed on and after 01.01.2004 are covered by the New Pension
Scheme (NPS).”
1.2 The principles that should govern the structure of pension etc
have to be evolved taking into account the relevant constitutional provisions
as well as judicial pronouncements by the Supreme Court of India in this
regard.
1.3 Article 366(17) of the Constitution of the Country defines
pension as under:
“ Pension: Pension means a pension whether contributory or not, of
any kind whatsoever payable to or in respect of any person and includes retired
pay so payable; a gratuity so payable and any sum or sums so payable by way of
the return, with or without interest thereon or any other addition thereto, of
subscription to a Provident Fund.” From this what is to be inferred is that the
gratuity as well as commutation are also part of the pension as a whole. These
are also to be treated as pensionery benefits.
1.4 The IV CPC went into the conceptual question of pension in
detail. Some of the observations contained in their report are relevant in
understanding the purport in the background in which the Central Government
employees are placed today. This is reproduced below:-
“Para 2.13: Part II: The concept of “pension” however old in its
origin, had the latent and real desire to provide for an eventuality – known
and unknown. The known eventuality was old age and probable reduction in
earning power, while the unknown eventuality was disability by disease or accident
or death. Its real purpose was security, Even though the beginning was oblique,
indiscernible and faint, but the germ of an effort to provide security ran
through the provision and it is natural that it should have grown and flowered
with the development of human understanding and desire to look after and
provide for those who deserved it for man has constantly been seeking means by
which to enhance his economic security. But the extension of the pension
provision from military service to civilian public employment, resulted largely
from consideration for the employees and the pressure of their organisations. Some
benevolent employer goes to the extent of regarding pensions as an absolutely
indispensable complement of wages – a terminal benefit. That, however, is apart
from another aspect bearing on pension – the social aspect. The demographic structure
of the population is changing because of the greater expectation of life. Thus,
those who are now in middle age are going to be nearly twice as big an economic
burden to their children as their parents are to them. The problem in such cases,
has been tackled as a social obligation, including social insurance for
citizens generally.”
“Para 2.17: In the very nature of things, every employee, who
lives long enough, reaches a stage of diminished outturn of work or what may
generally be called nonproductive years. That may, speaking generally again, be
set to be the responsibility
of his employer for whom he has spent the best years of his life.
In a welfare state that may also be set to be the responsibility of the
Government (where he is not in his employment) and, in more modern society, it
may also be set to be the responsibility of the individual. So all three
namely, the employer, the Government and the employee or one or the other of
them, may be expected to contribute towards the pension according to the social
or administrative set up of the country or society where the individual
undertakes the service but the one common feature and object of pension is to
provide for the old age of the employee for the simple reason that time has
eroded his capacity to earn and he is unable to provide for himself. In a country
like ours, where we have solemnly resolved to constitute it into a “Socialist” Republic
and to secure to us all social and economic justice (Preamble), it behoves the
Government to take care of its employees by providing terminal benefit like retirement
pension when they become entitled to them. We may refer to the directive principle
of the State Policy enshrined in Article 39 (a) of the Constitution that the State
shall in particular direct its policy towards securing that the citizens have
the right to an “adequate means of livelihood” ….. If, such a citizen is an
employee of the State, is it out of ordinary, and not as of a Constitutional
directive, that the State should appreciate its duty to provide for him by
means of a pension and/or other terminal benefits? (emphasis added) …. The
concept of pension, therefore carries within it the germ of certainty,
periodicity, and “adequacy”. ……. Ours is a Socialist State and the fundamental
aim of Social security is to give individuals and families the confidence that
their level of living and quality of life will not, in so far as, be greatly
eroded by any social or economic eventuality, including the age of superannuation
or oncoming disability”
1.5 The concept of pension has been explained more precisely in
the Encyclopaedia of Social Sciences, Vol.11 as under:
“administrators and civic leaders interested in the improvement of
Government services formulated the idea of pension as an efficiency device necessary
for the orderly and humane elimination of superannuated and disabled employees no longer able to function
efficiently for the proper operation of the system of promotions, for the
attraction of better type of employees and for the improvement of working
morale”
1.6 On the doctrinal approach the Encyclopaedia further states
that:
“ A doctrine recently advanced and more far reaching in its implications
regard the Public Service as the logical pioneer in the meeting of the old age problem
as it affects wage earner in modern society. This doctrine considers a pension
as a compensation paid to the employee for the gradual destruction of his wage
earning capacity in the course of his work. Retirement being a proper charge against
the employees, entire period of active service, the employer should make contribution
towards the employees eventual retirement during each year of service of the
employee, in a manner similar to that in which he annually sets aside a reserve
against depreciation and obsolescence of his plant and machinery. Pensions,
according to this doctrine, are an absolutely indispensable compliment of wages.”
1.7 In para 2.20 the IV Pay Commission has observed:
“but even though the Government service pension scheme in our
country is non-contributory, it has been contended again by way of doctrinal
approach, that this is not really so and that some allowance is made for the
missing contribution while determining the salaries”
1.8 The Supreme Court in their Landmark Judgment (which has been approvingly
quoted by the 5th CPC in D.S.Nakara and others Vs Union of India (AIR 1983 SC
130) held that Pension is neither a bounty nor a matter of grace depending upon
the sweet will of the employer. It is not an ex-gratia payment but payment for past services rendered. It is a social
welfare measure rendering socio economic justice to those who in the hey-days
of their life ceaselessly toiled for their employer on an assurance that in
their old age they would not be left in lurch. The 5th CPC paying due respect
to the above observation of the Honourable Apex Court in Para 127.6 of its
report has stated that the pension is the statutory, inalienable, legally enforceable
right of employees which has been earned by the sweat of their brow.
As such the pension should be fixed, revised, modified and changed
in ways not entirely dissimilar to the salaries granted to serving employees.
1.9 While examining the goals that a pension scheme should seek to
sub-serve, the Honourable Apex Court held that “a pension scheme consistent
with available resources must provide that the pensioner would be able to live:
(i) free from want, with decency, independence and self respect,
and
(ii) at a standard equivalent at the pre retirement level”
The Court observed that we owe it to the Pensioners that they
live, not merely exist.
1.10 From the above observation of the Supreme Court it is clear
that pension is payable by the employer i.e., the Central Government to its
retired employees which is their statutory and legally enforceable right from
which they cannot be deprived. That the amount of pension must be enough to
enable a pensioner to live free from want with decency, independence, and
self-respect and at a standard equivalent at the pre-retirement level.
1.11 Keeping the above observations and principles and judicial
pronouncements in view, we submit below our suggestions for restructuring the
existing pensionery scheme in appropriate chapters. We have made our
submissions only in respect of issues where we want Commission to consider
improvements in the existing provisions.
CHAPTER – II
New Pension
Scheme (NPS)
2.1 The contributory pension system brought in by the GOI through
their notification dated 22.12.2003, now renamed as National Pension System
under PFRDA Act, has been imposed on Government employees who entered service
on or after 1.1.2004.
2.2 This is an illegal act in as much as the Supreme Court of
India had held Pension as an enforceable inalienable fundamental right.
Therefore it should be scrapped or at least not made applicable to Government
employees. This has also divided the CG employees into two categories and
therefore it is discriminatory in respect of persons who have entered service
on or after 1.1.2004 who had been denied the statutory pension. Any
discriminatory scheme is illegal and ultravires of Article 14 of the
Constitution. On this count also the NPS cannot be made applicable to the
Government employees.
2.3 The Centre for Economic Studies and Policy, Institute for
Social & Economic Change, Bangalore in a Study of Terminal Benefits of the
Central Government Employees sponsored by the VI CPC had also observed that
Civil Services Pension is in the nature of a deferred wage. It is well known
that the principle guiding the pay package of civil servants is one of
intentionally spreading out the compensation over a long period of time,
thereby the wages paid out during the course of the work tenure is kept low by
design, and the pension payments made during the retirement phase compensate
for the low working wages.
2.4 The above mentioned study under the heading “Arguments against
pension reforms” states as follows:
“Deferred Wage: In the context of civil servant pension payments,
it is argued that, the principle guiding the fixation of pay package is one of
intentionally spreading out the compensation over a long period of time, whereby
the wages paid out during the course of work tenure is kept low by design, and
the pension payments made during the retirement phase compensate for the low
working wages. The Supreme Court of India held that pension is neither a bounty
nor a matter of grace depending upon the sweet will of the employer. It is not
an ex-gratia payment, but a payment for past services rendered. It is a social
welfare measure, rendering socio-economic justice to those who in the heyday of
their life ceaselessly toiled for the employer on an assurance that in their
old age, they would not be left in the lurch.”
“Larry Williams observes “Actually, civil service pensions,
because they are not based on contributions, are best described as deferred
wages. Civil servants accept a lower current wage in exchange for the promise
of a pension in their old age. If this pension were contributory, they would
insist on a higher wage and government would have to either increase taxes or
borrow (issue debt) to pay it. The real cost of civil servants is thus much
higher than recorded under the current system of cash accounting. A good reform
would be to move to a system of accrual accounting setting up at least a
notional fund to pay these deferred wages” (Larry Wilmore, 2004)” “Public and
private sector pay differentials: A comparison of the public and private sector
wages reveals that while the public sector wages for the lower grades compares
well with that of the private sector, the salaries of the employees belonging
to the higher grades are highly unfavourable to the public sector employees.
The post-retirement benefits that the government employees are entitled to act
as some incentive to retain them in government sector.”
2.5 The above study had submitted the following estimated
pensionery outgo which tends to increase during the period from 2014-2038. It
is only after 2043 that it starts declining and will be reduced to zero only in
2088. The table is given below:
Table showing
estimated Employee Pension Family Pension Total pension
pensionery outgo Payout (in Rs Pay out (in
payout (in
Year Crores) Rs.Crores) Rs.Crores)
2004 11300.69
2983.38 14284.07
2008 13532.84
3572.68 17105.52
2013 16549.07 4368.94 20918.02
2018 21862.54
5771.79 27634.33
2023 27723.68
7319.11 35042.80
2028 34076.27
8996.13 43072.41
2033 39321.68
10381.01 49702.69
2038 45164.50
11923.41 57087.90
2043 41747.23
11021.30 52768.53
2048 35011.92
9243.18 44255.10
2053 25405.44
6707.07 32112.51
2058 16303.15
4304.07 20607.22
2063
8179.51 2159.39 10838.90
2068 3159.88 834.19 3994.07
2073 800.68 211.34 1012.02
2078 110.26
29.17 139.43
2083 3.52 0.97 4.49
2088 0.00 0.00 0.00
2.6 The above study had also pointed out that expenditure on
pensions of civil servants of high income OECD countries on an average is 2% of
GDP (less than 1% in Ireland and more than 3.5% in Austria*)(* Source: OECD
Social Expenditure Database). But in the 8 South Asian countries it is less
than 1% of GDP (Source: World Bank Data base). However, in India between
1964-65 and 2004-05 on an average pension payments (Civil Service pension paid
by Central Government) have constituted 0.51% share of GDP. The Pension
liability would continue to increase and reach 0.54% level by 2024-25 and
remain at that level till 2014-25 after which they would decline as a
percentage of GDP according to the same study conducted by Dr.Gayatri at the
instance of VI CPC. These figures argue themselves in favour of continuation of
the Defined Benefit Pension Scheme for all Central Government employees instead
of throwing a section of them to market based NPS. According to 2011 census
62.8% are in the age group of 15 to 60 and only 8.2% are above the age of 60.
2.7 From the above projection it is very clear that the benefit of
NPS will commence only after 44 years i.e. in 2044. And during the period it
will increase exponentially as because in addition to the Statutory pension
liability the Government will be contributing to the NPS also @ 10% of annual
salary bill of the CG Employees who have entered service on or after 1.1.2004.
2.8 The final conclusion of this study team has been as under:
“Mainly given the fact that the future liability although may be
large in terms of the absolute size is not likely to last very long and does
not constitute an alarmingly big share of the GDP which is also on the decline,
it appears that pursuing the existing Pay As you Go to meet the liability would
be an ideal solution.”
2.9 Applying this conclusion we may suggest that the NPS may not
be made applicable to the Government employees and all those who had been
covered under NPS may be reverted back to statutory pension scheme. The
Government may be asked to study the experiences of this scheme in several
other countries in the world. In Chile such a scheme has been reversed as
because the return which the low paid employees got out of the annuity
purchased was not as good as 50% of LPD but as low as 20% of LPD. The UK
Government had to pay out of the exchequer large amount by way of subventions
in order to ensure that that annuities purchased yield 50% of LPD as pension.
It is well known that in USA where there were similar pension schemes dependent
upon the market had collapsed during the financial melt down from 2008 onwards.
It is estimated that more than 3.5 trillion $ worth of pension wealth was lost.
The workers not only lost their pension but also their jobs. Our respectful
submission is that taking into account the demographic considerations of India
which is a country of young do not need any such market oriented pension
scheme, particularly when the international experience is that such schemes had
failed and our country can afford to pay pension to civil servants which stands
at level of 1% of the GDP. We conclude by quoting the opinions of experts on
the future of market dependent pension Scheme.
Mr Joseph Stiglitz (Chief economic advisor to former president of
USA Bill Clinton, former vice-chairman and chief economic advisor, World Bank,
Nobel Prize winner, Professor of economics, Columbia university) said that
“Stock market does not guarantee returns. It does not even guarantee that the
stock values will keep up with inflation. Privatization would not protect
retirees against the social security systems insolvency. Argentina’s
privatization of its pension system was at the centre of its fiscal woes”.
Mr Dean Baker (Co-director for centre for economic and policy
research, Washington) said “Privatisation means that you would not have a
guaranteed benefit that you have today. It would
depend on how will your investments do or how well they have done
at the point you retire. He
quoted the collapse of NASDAQ and Enron. In Britain, Insurance
companies could not honour their promises and the Government had to compensate
with 8 billion pounds”.
We have requested the PFRDA Authority to furnish certain
information on their working ( copy enclosed). On receipt of this information
we may make certain further submission for the consideration of the Commission.
Chapter – III
Pension Entitlement
- Emoluments
for Pension:
3.1 The entire income in form of basic pay, special pay or
personal pay if any, deputation duty allowance etc are the elements of pay
proper and therefore confining the emoluments to the basic pay as recommended
by the IV and V CPCs is arbitrary an dtherofre should be undone. The Dearness
Allowance is meant to restore the purchasing power of pay and therefore is only
an addition to pay. In many countries there is no system of DA. Periodically
the Pay is revised / indexed taking into account the rise in cost of living.
Here also there is a system of merging the DA as DP for purposes of pensionery
benefits. In respect of gratuity already the DA is being included with Pay and
therefore there is no reason for excluding the DA from the emoluments. We
therefore suggest that the emoluments for the calculation of pension should
include:
(a) Basic Pay
(b) Any Special pay or personal pay, or deputation duty allowance.
(c) Dearness Allowance
(d) Non-practicing allowance in respect of Doctors
(e) 75% of the running allowance in respect of Railway Running
Staff retired after 4.12.1988.
3.2 There are persons
who retire after having served for full year since their last increment. The
next increment which has already accured to them is however not added to their
amoluments for purposes of computing pension and other pensionery benefits. It
is therefore submitted that the Commission may kindly consider and recommend
that if a person retire on the day he has completed 12 months of service since
his last increment, the increment accrued to him may be added notionally to his
basic pay and then the pension computed.
3.3 The VI CPC has already recommended that the ten monthly
average emoluments or the last pay drawn, whichever is more beneficial, should
be the basis of computation of pension. We have therefore no further suggestion
to place before the Commission on this issue.
- Qualifying
service for pension:
3.4 Casual Labour / Contingent Paid Employees: At present Casual
labourers / Contingency paid employees are allowed to count their service
towards pension @ 50% of the total period falling between acquiring the
temporary status and regularization and full service thereafter. The above
benefit is also subject to further condition that such employees should be
regularized and absorbed against a regular post. The operation of this condition
is so harsh that there are many cases in which the entire service rendered non
pensionable because the employee may be retired / retrenched / die before such
regularization. We, therefore, propose that the 50% of service before acquiring
temporary status and full service after acquiring temporary status irrespective
of whether he / she was regularized or not should count towards pension.
Similarly these employees have to remain for long durations without any regularisation
and are deprived many amenities which a regular employee gets. Not to treat
their service pensionable for a considerable period leaves them with very meagre
pension and in some cases with no pension. This is against the principle of social
justice and therefore our above suggestion should be considered by the 7th
CPC.
3.5 Pensionable service of
Casual and GDS: Recent judicial pronouncements have directed the Government to
take into account the date of entry in the service as a casual labourer or a
temporary status Majdoors etc into criterion and not the date of regularisation
to determine as to whether he or she is to be brought under the CCS (Pension)
Rules, 1972 or under the NPS. Therefore we propose that all casual labourers,
Gramin Dak Sewaks in the Department of Posts etc are to be brought under the Defined Benefit Pension Scheme
under the CCS (Pension) Rules, 1972 for grant of pension on their
regularisation in the services, even though they are getting regularisation
after 1.1.2004 because they should be treated as having entered the services
before 1.1.2004 as per the judgment of Court. We therefore propose that entire
service rendered as a casual labour irrespective of the fact whether he was
granted temporary status or ultimately regularised should be treated as
pensionable service and the service rendered as GDS in Department of Posts also
should be treated in the similar fashion.
3.6 Interruption causing forfeiture of service for pension: The
existing provisions defining interruptions in service causing forfeiture of past
service for purposes of pension are quite antiquated, unnecessary and
unreasonably harsh, which should be removed from the statue book. In formative
years when the British Authorities were recruiting Indians in their
Administrative Services, it was noticed that during sowing and harvesting
seasons, a large number of employees used to go back to the fields without any
regular leave etc. As a deterrent, the rules regarding interruption in service
had been legislated then. Since most of the employees have now lost their rural
roots, such frequent and recurring interruptions are no longer there.
Interruption as and when rarely caused is due to reason mostly beyond the
control of an employee. We therefore, propose that instead of treating
interruption to cause an automatic forfeiture of past service for pensions, it
should be dealt with under CCA Rules. The provision causing forfeiture of
service for pension purposes on account of interruption may, therefore, be
deleted.
3.7 Resignation as retirement: Resignation is tendered by a
Government Servant in varying circumstances. It is felt, therefore, that
resignation need not always result in forfeiture of past services (Rule 26 of
Pension Rules) and denial of Pension. An objective view is required to be taken
by the appointing authority in the case of all
those who tender resignation after completion of 20 years of service.
Such resignation may be treated as voluntary retirement and benefits extended accordingly.
In this connection we may cite the following decisions of the Judiciary:
(a) CAT Mumbai full bench OA No.1384/1985 decided on 8.7.1997
(b) CAT Ahmedabad OA No.498/2002 decided on 18.03.2004
(c) CAT Jabalpur O.S No.623.1991 decided on 13.10.1995
(d) Bombay High Court WP No.615/1996 and WP No.2586/1997 decided
on
28.02.2002
Even 5th CPC in Para 133.79 had recommended that terminal gratuity
at different rates be paid to those who resign after putting in certain years
of service and resignation after 20 years of service may be treated as
voluntary retirement and pension may be paid accordingly. We, therefore,
request the 7th CPC that the above recommendation may be reiterated.
3.8 There are certain
employees who are in the CPF Scheme but could not opt for the Pension Scheme in
the year 1986. These are mostly women employees employed in Atomic Energy
Commission etc who could not make up their mind as to whether they could render
the requisite number of service necessary for grant of full pension. In certain
autonomous bodies while options for Pension scheme have been obtained, this is
not being granted. They may now be allowed to revise their option. Our
suggestion is that CPF / SRPF retirees may be granted Minimum Pension.
3.9 The VI CPC has done away with the requirement of 33 years of
qualifying service for full pension. They have said that full pension may be
granted to those who have the qualifying service of 20 years. Therefore we have
no further suggestion to place before the Commission on this issue.
- Rate
of Pension:
3.10 We should keep in mind the observation of the Apex Court that
the pension scheme must provide so much that the pensioner should be able to
live:
(i) Free from want, with decency, independence and self-respect,
and
(ii) At a standard equivalent at the pre-retirement level.
(The Court had further observed that we owe it to the pensioners
that they live; not
merely exist.)
3.11 Therefore taking into account that on superannuation an
employee is left with a „two unit family‟ generally and
therefore if he is to be enabled to maintain a standard equivalent to the
pre-retirement level, the rate of pension should be 67% of the last pay drawn.
We therefore suggest that full pension should be at the rate of 67% of Last Pay
Drawn or 10 months average emoluments, whichever is more beneficial.
3.12. It is pertinent to
point out that several countries in the world pay higher rate of pension to
their civilian pensioners. France is paying 75% of last six months average emoluments
as pension; Belgium is paying 75% of last five years average as pension; Cyprus
is paying 67% of final salary as pension; Malta is paying 80% of average of
best 15 years wages as pension; Our neighbour Sri Lanka which is also in the
lower middle income group of countries like India in South Asia, is having a scheme
called “Public Servants Pension Scheme (Defined Benefit Scheme) established in
1901, as a mandatory scheme financed by the Government budget is paying 85% to
90% (for 30 years of service) of last one year annual salary at retirement as
pension (Source: Sri Lanka Pension Department Circular No.3/2004 dated
16.01.2004); The life expectancy in Sri Lanka at 60 is 20.2% which is 3.5% higher
than India.
3.13 In Pakistan which is another neighbour and remains in the
same lower middle income group of countries is calculating pension on the
following formula:
“Number of years of service X Last Basic Pay X 7 and divided by
300. If an employee has served 35 years of service and received last basic pay
as Rs.10,000/- then that employee shall get a pension of 8.167/- (i.e.,
81.67%).
3.14 In Bangladesh the retirement age is 57. The life expectancy
at 60 in Bangladesh is 17.9 which is same as in India. This country also
remains in lower middle income group of countries like India. But Bangladesh
pays 80% of last pay as pension. In the war devastated country of Afghanistan,,
pension is calculated on last 36 months average; for each year it is 2% and a
maximum of 80% is given as pension in that country.
3.15 From the above comparison with some of the world countries of
both European as well as our own South Asian countries, it is clear that all
those countries are paying better percentage of pension to their Civilian
employees. India appears to be one of the less pension paying country despite
its image of one of the faster developing economies in the world. We therefore
suggest that the basic pension to be determined should be 67% at least on the
basis of the last pay drawn or the 10 months average emoluments, whichever is
more beneficial to employee subject to the condition that the pension so
determined shall not be less than the minimum of the pay scale of the post held
by him at the time of his retirement.
- BSNL
Pensioners Issues.
(i)
Pension Revision of BSNL pensioners should be made mandatory when
ever wage revision is implemented in BSNL. Before the formation of BSNL on
01-10-2000, Rule 37-A was incorporated to the CCS (Pension) Rules, 1972 to
ensure pension to the BSNL absorbed DOT employees from the Consolidated Fund of
Government of India. Subsequently, this
position was ratified by the Secretary, Department of Telecom vide his DO
letter dated 15-05-2005.,that in respect of employees who have been absorbed in
BSNL,BSNL is liable to pay the pension contribution in accordance with FR 116
and liability on account of pension payable will be that of government of
India. Surprisingly, DOT issued another letter on 15th June,2006,reversing its
earlier decision and linked payment of pension with receipt of revenues from BSNL.
This, being most dangerous and certain to create problem in future for payment
of pension, the unions took up the issue seriously and the DOT was compelled to
issue another letter stating that the contents of the letter dated 15-06-2005
will not be insisted. But in the absence of cancellation/nullification of the
controversial letter dated 15-06-2006, when ever the pension revision issue of
BSNL pensioners is initiated, hindrances/road blocks are raised not only by
DOT, but also by other departments like Expenditure, Law and Public
Enterprises,on the basis of the above letter. This has happened when pension
revision of pre 2007 BSNL pensioners was initiated and now for pension revision
on 78.2% IDA merger.This position should not be allowed to continue and the
BSNL pensioners should be treated at par with central government pensioners, as
they are covered under rule 37-A of CCS(Pension) Rules,1972. Therefore pension
and pension revision should be granted to BSNL pensioners irrespective of the
payments made by BSNL.
(ii)
Other benefits granted
to BSNL employees from time to time should be granted to the BSNL pensioners
also.
(iii)
All the pensionary benefits,that may be granted to the central
government pensioners based on the recommendations of the 7th Central Pay
Commission should be extended to the BSNL pensioners as in the case of 6th Pay
Commission recommendations.
- Additional
Pension
3.16 It has already been well recognised that as the age after
superannuation further advances, not only the pensioner becomes weak in limbs
but also becomes more susceptible to various geriatric diseases. He will have
to incur additional expenses for his upkeep. There are also the social
obligations and increased expenses on medical treatment etc.
3.17 The Government of India has accepted and implemented the 6th
CPC recommendation of age-related additional pension beyond the age of 80.
However the 6th CPC did not recommend any addition to the pension for a period
of 20 years after superannuation at the age of 60. Their argument was that
every pensioner gets increase in his / her pension after 15 years when the
commutated portion of his pension is
restored. This is not at all a valid ground. Even during these 15 years the Dearness
Relief is calculated on his gross pension and not on his net pension after commutation
and he earns interest on commuted value of pension. Therefore there is no
increase in pension on account of restoration of commuted pension after 15 years.
3.18 In our opinion this needs certain revision. According to SSO
survey (2007- 08) 7.5% population only is above the age of 60. Naturally this
may reflect among the pensioners also. Life expectancy at 60 is only 17.9 and
at 70 it is only 11.8 (Source: Sample Registration System O/o the Registrar
General India). This means a Government servant is receiving pension for 18 to
22 years. In the age group of 60 to 79, in Rural areas 5% and in Urban areas
5.5% is confined to bed. In the same age group 22.4% in Rural areas and 20.2%
in Urban areas is confined to home due to physical immobility (Source: National
Sample Survey, 60th Round, 2004). After retirement, their income from pension
is nearly 1/3rd of their gross salary at the time of retirement. But they have
to spend more on medical care. This age-group therefore also needs some relief
by way of additional pension. Incidentally Afghanistan which is one of the low
income countries in Asia, is having a retirement age of 65 with a formula of
grant of additional pension at the rate of 3% for each year after 65 years of
age and the maximum 80% additional pension is paid.
3.19 Therefore we seek the 7th CPC to consider addition to the
pension after granting 67% of last pay drawn (LPD) / Average of emoluments as
full pension on superannuation at 60 years of age as under, because of
prevailing life expectancy of Indian Citizen Age is 69.6 (assessed during the
year 2011-15) and the old pensioner who is also considered to be senior citizen
has to wait for a period of twenty years on his retirement to get an increase at
his age of 80 maintaining his health from disease burden.
On attaining Age of Additional
Quantum of Pension
65 Years 5%
of Basic pension
70 Years 5%
of Basic pension
75 Years 5%
of Basic pension
80 Years 6%
of Basic pension
85 Years 6%
of Basic pension
90 Years 6%
of Basic pension
- Minimum
Pension
3.20 Though the concept of minimum pension and the method of
computing it have not been explained by any of the pay commissions or the
Government, it is clear that the Minimum Pension is 50% of the Minimum Wage.
The rationale behind the percentage has nowhere been explained. We however
think that in order to ensure that it is adequate, 100% of the minimum wage
should be the Minimum Pension. The very concept of Need Based Minimum Wage is
that this is a level of wage below which a worker’s family cannot
subsist / survive and remain capable to perform. That being the concept of
minimum wage, it should also apply in the case of Minimum Pension on the
premise that any pension lower than the Minimum pay is insufficient to enable a
pensioner / family pensioner to live or survive.
- Dearness
Compensation
3.21 We have no suggestions for improvement of this issue except
that Pensioners may be paid the same dearness compensation viz., at the same
rate as it is being paid to the serving employees. It should be periodically
merged with the basic pension so that
deficiency in the 100% neutralization in the cost of living is partially
compensated.
- Merger
of Dearness Relief with Basic Pension
3.22 As on 01.01.2014, the Dearness Relief compensation stands at
100%. The suggestion for merger of DR to partially compensate the erosion in
the real pension was first suggested by the Gadgil Committee in the post 2nd
Central Pay Commission period. The 3rd CPC had recommended such merger when the
cost of Living Index crossed over 272 points i.e. 72 points over and above the
base index adopted for the pension revision. In other words, the recommendation
of the 3rd CPC was to merge the Dearness Relief when it crossed 36%.
The Government in the National Council JCM at the time of negotiation initially
agreed to merge 60 % Dearness Relief and later the whole of the DR before the
4th CPC was set up. The 5th CPC merged 98% of DR with pension.
3.23 The methodology adopted for compensating the erosion in the
real value of pension in the interregnum period had always been through the
mechanism of merger of a portion of Dearness Relief. The 5th CPC had
recommended that the Dearness Relief must be merged with basic pension as and
when the percentage of Dearness compensation exceeds 50% accordingly even
before the setting up the 6th CPC the Dearness Relief to the extent
of 50% was merged with pension.
3.24 It was totally ironic to note that deviating from all other
Pay Commissions, the 6th CPC had made a reversal and recommended that no
Dearness Allowance / Dearness Relief should be merged with the Basic Pay of
employees / Basic Pension of Pensioners. The recommendation had dealt a severe
blow below the belt as this recommendation denied everyone from having any
cushion against the erosion caused in the real value of pension in between two
pay commissions. Had the recommendation of V CPC been continued, there would
have been two automatic mergers of Dearness Relief by this time as V CPC
recommended such a merger automatically whenever the dearness relief index
crosses 50% mark.
3.25 The Central Government also taking undue advantage out of the
recommendations in the name of 6th CPC has been stiffly denying any such merger
of DA/ DR. This issue requires course correction and we suggest that the 7th
CPC should recommend for automatic merger of DA / DR as and when the index
crosses the 50% mark and before setting up another Pay Commission entire DA
should be merged with pay as was done by the V-CPC.
The submission made in Staff Side Memorandum on this issue are
reiterated with a request that the
commission may submit a interim report recommending
that 100% of DR may be merged with the basic pay w.e.f. 1.1.2014
I Grant of Interim Relief
3.26 In Memorandum submitted by and on behalf of Staff Side of
National Council (JCM) on the above issue, 25% of basic pension as Interim
Relief for Pensioners and G D S of Postal Department has been demanded. VII CPC
may consider this demand and give an Interim Report to the Government recommending that 25% of basic pension may be
granted to all pensioners w.e.f. September 2013 when the Government had
announced the seting up of 7th Central Pay Commission.
J Periodical Revision of Pensionery
benefits
3.27 We submit that there should be a system of periodical
revision of pay / pension structure in Public Sector takes place after every five
years. Pay and Pension structure which should also be revised after every five
year. Present wage structure is based upon minimum which is lower than Need
based Minimum only through periodical revision it may be attaining the fair
wage and finally to living wage standard. Under Article 43 of the Constitution,
State has to endeavour to secure living wage to all workers. And this is
possible over a period of time. It is on these considerations that revision of
wage / pension has to be done every five year till the living wage standard is
achieved.
CHAPTER – IV
Parity Between Past And Future Pensioners
4.1 The Government have recently announced that “One Rank One
Pension” shall be implemented in respect of Armed Forces so that the
glaring disparity between the persons of equivalent rank and status do not draw
vastly unequal pensions if they retire at different point of time is undone.
Already there is a complete parity in pension among the Judges of Supreme
Court, High Court and the Comptroller and Auditor General of India,
irrespective of the date of their retirement.
4.2 In so far as the Civilian Employees are concerned the
principle of parity in pension between the past and the future pensioners was
implemented by the Government as had been recommended by the V CPC. The V CPC
recommended that “as a follow up of our basic objective of parity we would
recommend that the pension of all pre-1986 retirees may be updated by notional
fixation of pay as on 1.1.1986 by adopting the same formula (Revised Pay Rules)
as far as the serving employees. This step would bring all the past pensioners
to a common platform on to the 4th CPC pay scales as on 1.1.1986. Thereafter,
all pensioners who have been brought on the 4th CPC pay scales by notional
fixation of pay and those who have retired on or after 1.1.1986 can be treated
alike in regard to consolidation of their pension as on 1.1.1996 by allowing
the same fitment weightage as may be allowed to the serving employees”. They
further recommended that “the consolidated pension shall not be less than 50%
of the minimum pay of the post as revised by the CPC held by the pensioner at
the time of retirement”. The V CPC further said that “this attainment of
reasonable parity needs to be continued so as to achieve complete parity over a
period of time”. However the VI CPC totally ignored these recommendations of
the V CPC and has reintroduced the element of disparity by not adopting the
same formula for post 1996 retirees, and by not recommending the same fitment
benefit and other recommendations liberalising the pension rules in respect of
pre-2006 retirees. Thus a huge disparity between pre-2006 and post-2006
retirees has been created by the VI CPC.
4.3 We therefore urge that pay of every pre-2014 retiree should be
notionally redetermined (corresponding to the post from which he or she retired
and not corresponding to the scale from which he or she retired) as if he or
she is not retired and then the pension be computed under the revised
liberalised rules which are to be applicable to the post-2014 retirees under
the same rules which would be applicable to employees in service as on
1.1.2014.
CHAPTER – V
Family Pension
5.1 At present the family pension is given at the rate of 30% of
Pay last drawn. However, family pension shall be equal to 50% (67% as proposed
by us) of pay last drawn or twice the rates given above, whichever is less and
the amount so admissible shall be payable from the date following the date of
death of the Government Servant for period of 7 years or for a period up to the
date on which the deceased Government Servant would have attained the age of 67
years had he survived / 10 years in case of death in harness. The family
pension is not less than Minimum Pension.
5.2 The above Rule is applicable to a Government Servant who is
not governed by Workman Compensation Act, 1923, if he dies while in service,
after having rendered not less than 7 years of continuous service.
5.3 The prescribed period for which the family pension is payable
is as under:
(i) In the case of a widow or widower, up to the date of death or
remarriage whichever is earlier.
(ii) In the case of a Son until he attains the age of 25 years.
(iii) The unmarried / widowed / divorced daughter.
(iii) The disabled mentally retarded child of the Government
Servant.
5.4 We suggest as under:
(a) “Though Unions and Pensioners’ Associations demanded enhanced
Family Pension for 10 years in the case
of death of both employees and pensioners, the VI CPC recommended enhanced
family pension for ten years in the case
of death in harness only stating that a special dispensation is justified for them( Para-5.1.42 )and the
government accepted /implemented the same, thereby dividing a single class of Family Pensioners.
Earlier to it was for 7 years subject to ceiling of 58+7=65, which was later
altered to 60+7=67 years on change of
retirement age in the case of death of both employees as well as pensioners
uniformly. As the enhanced Family
Pension on the death of the Head of the family is intended for the family
to stabilize the sudden drop in the take
home pay/pension and as the distress due to loss of bread winner, the enhanced Family Pension and the
financial insufficiency are the same whether it is the death in harness or pensioner’s death, it is felt that the
introduction of a different enhanced period for death in harness alone amounts to unfair labour
practice. As the distress, financial crunch and
sentimental depression are more or less the same , we feel strongly that
there is no need to differentiate
between the two ‘distress situations’.The Commission is requested to
recommend removal of this disparity to
enable grant of enhanced family pension uniformly in both the cases for 10 years keeping in view the
principle of social justice , equity and fair play.
(b) The quantum of family pension for the period of 10 years
should be equal to the pension of the Government Servant was entitled as per
Rules.
(c) After the expiry of the above 10 years period, the family
pension may be reduced to 75% of full pension or 50% of last pay drawn
whichever is higher.
(d) In case of a Son, the family pension may be allowed up to the
age of 28 years. This is suggested because the recruitment age has been raised
in certain cases to 28 years.
(e) The concession extended to a disabled mentally retarded child
to receive family pension until his / her death is subject to the condition
that the said disability should have manifested before the death of Government
employee. We suggest that this condition may be removed.
5.5 A Government Servant retired on medical invalidation after
rendering less than 10 years of service ( 5 years as per our proposal) gets no
pension. We suggest that he should be granted full notional pension (i.e., 67%
of his emoluments / Minimum pension, whichever is higher. On death of such a
Government Servant his family should get:
(a) Full notional
pension / Minimum pension during first 10 years after his death.
(b) 75% of the above
or Minimum pension, whichever is higher, thereafter.
Additional Pension:
5.6 In the case of family pensioners also taking into account
their solitude and inability to earn and the ever rising cost of living etc we
request for the enhancement of the family pension at the following rates:
On attaining age of Additional Quantum of
Family Pension
65 Years 5%
of Family pension
70 Years 5%
of Family pension
75 Years 5%
of Family pension
80 Years 6%
of Family pension
85 Years 6%
of Family pension
90 Years 6%
of Family pension
Extra Ordinary Pension
5.7 The 5th CPC in Para 135.17 of its Report has recommended that
regulation of compensation or disabilities categorized under (b) and (c) should
be:
“II – Cases of disability (100%) resulting in discharge from
service”
“Normal pension and gratuity admissible under CCS (Pension) Rules,
1972, without insisting on the requirement of minimum service of ten years plus
Disability Pension equal to the normal Family Pension, i.e., 30% (as per our
proposal 50%) of the basic pay”.
5.8 The Department of Pension & Pensioners Welfare, while issuing
orders on acceptance of the recommendation vide OM No.45/22/97-P&PW(C)
dated 3.2.2000 (incorporated in Appendix-3 of Swamy‟s Pension
Compilation) the well-meaning recommendation has been altered as follows:
“III – Disability Pension – for cases covered under categories „B‟ and „C‟.
“(1) Normal pension and
gratuity admissible under the CCS (Pension) Rules, 1972 plus – Disability
Pension equal to 30% of basic pay for 100% disability.” This has resulted in a
Group „D‟ employee with 6 years‟ service, who
has been invalidated (with 45% disability) and boarded out of service not
getting the minimum pension towards “Service element”. This injustice is
required to be set right.
5.9. Extension of Family Pension Under CCS (Pension) rule, 1972 to
CPSU absorbees who were compulsorily covered by the “Employees Family Pension
Scheme, 1971 on their absorption in Centyral Public Sector undertaking and to
those absorbees who were not eligible for family pension since they were
drawing more pay than the prescribed limit
for eligibility under the scheme.
Central Government employees who were on deputation to Central
Public Sector Undertaking / Autonomouns Bodies (AB) and who were subsequently
permanently absorbed in the CPSU / AB were compulsorily covered by the ‘Employees
Family Pension Scheme, 1971 framed under the Employees Provident Funds and
Miscellaneous Provisions Act, 1952 (Administred by the Provident fund
Commissioners), if the said scheme was in operation in the CPSU / AB in which
the Central Government employees was absorbed. And such of those absorbees who
were drawing more pay then the prescribed limit under the scheme not for family
pension under EFPS – 1971.
Government of India , Department of Pension & Pensioners
Welfare vide its O.M No. 1-18/86-P&PW (D) dated January, 1990 accepting the
request of the Staff Side in the 29th ordinary meeting of the National
Council (JCM), revised the family pension entitlement of the absorbed employees
and allowed them an option to choose either Family Pension Scheme of the
Central Government (i.e. CCS (Pension) Rules) or by that of the CPSUs /Abs (ie
Employees Family Pension Scheme, 1971). These modifications to family pension
entitlements of absorbees were given effect to from the date of issue of the
O.M. ie 22.1.1990 and were extended to only such of those absorbed employees
who were in service on the said date and who were permanent and had a
qualifying service of not less than 10 years in the Government. all other
absorbees were compulsorily covered by the Employees Family Pension Schem,
1971.
The Central Government Employees who were permanently obsorbed in
CPSUs / Abs and who satisfied the conditions of qualifying service in the
Government, but had retired before 22nd January, 1990 could not opt
to come over to the Central Family Pension Scheme (CCS (Pension) rules, 1972)
and were compulsorily covered by the Emplyees Family Pension Scheme, 1971.)
As a result of the above, there are now 3 categories of retired
CPSU Absorbees. (1) Absorbees eligible for family pension under Employees
family pension scheme, 1971, (2) Absorbees who are eligible for family pension
under CCS (Pension Rules, 1972 and (3) Absorbees who are not eligible for
family pension under any Scheme.
The VII Central Pay Commission is requested to recommend removed
of the disparity existing between the 3 categories of CPSU Absorbees stated
above by extending the provisions of CCS (Pension) Rules, 1972 to all the
Absorbees uniformly making them eligible for family pension.
CHAPTER – VI
Gratuity And Commutation Of Pension
Gratuity
6.1 Retirement Gratuity is paid at ¼ of basic pay for each
completed six monthly period of qualifying service subject to a maximum of 16.5
times of the emoluments. There is also a monetary ceiling of 10 lakhs. This is
applicable to all Government Servants who retire on completion of 5 years of
service. However, if a person dies in harness his family is granted the
gratuity at certain prescribed rates:
6.2 We suggest that the gratuity may be calculated on the basis of
25 effective days as against 30 days in a month. We make this suggestion
because the Government Servant should not be paid at a rate lesser than what is
admissible under the Gratuity Act.
6.3 The ceiling of 16.5 times should also be removed. This is
because under existing rules gratuity is reduced in the case of a Government
Servant who has put in less than 33 years of service. In the banking industry
there is no such ceiling of 16.5 months‟ salary but the
retiring bank employees are getting at the rate of ½ a month salary for every
year of service even over and above 33 years of service. Therefore, it is but
logical that for a service span exceeding 33 years, the gratuity should be higher
and the above ceiling be withdrawn.
Commutation of Pension and its Restoration
6.4 Central Government employees are permitted to commute up to
40% of their basic pension. We have no suggestion to make in this regard.
6.5 In the light of Supreme Court decision, commuted value of
pension is restored on completion of 15 years or on reaching 75 years of age
whichever is later. Most of the State Governments are restoring full pension
after 12 years or on reaching 70 years of age. We, therefore, propose that full
pension be restored after 12 years, or on reaching the age of 72 years,
whichever is earlier. From the table given below it will be seen that the
entire commuted value gets repaid to the Government by the Pensioners within 12
years.
Sl.No Details
Age next birth day = 61 years
1 Commutation
factor 9.81
2 Amount
commuted Rs. 100
3 Commuted
value received Rs.11,772
4 Amount
recovered in 12 years Rs.14,400
5 Amount
recovered in 15 years Rs.18,000
6 Excess
recovered in 12 years Rs. 2,628
7 Excess
recovered in 15 years Rs. 6,228
6.6 Now when the commutation factor has been reduced and is
applicable after 2008, the restoration of commuted pension should be after 10
years. It will be seen that entire commuted value gets repaid within 10 years
as could be clear from the table given below.
Sl.No Details Age
next birth day = 61 years
1 Commutation
factor 8.194
2 Amount
commuted Rs.100
3 Commuted
value received Rs.9,833
4 Amount
recovered in 10 years Rs.12,000
5 Amount
recovered in 15 years Rs.18,000
6 Excess
recovered in 10 years Rs.2,167
7 Excess
recovered in 15 years Rs.8,167
6.7 Taking all these factors into account, we suggest that the
commuted pension may be restored on completion of 10 years or reaching the age
of 70 years, whichever is earlier.
CHAPTER – VII
Medicare
7.1 The following landmark judgments of the Supreme Court of India
have held that the enjoyment of highest attainable standard of health is
recognized as a fundamental right of all workers / pensioners in terms of
Article 21 read with Article 39, 41, 43 and 48 of the Constitution:
(i) Consumer
education and Research Central and others Vs Union of India (AIR 1995 Supreme
Court 922)
(ii) Laxman Thammappa
Kothagiri Vs General Manager Central Railway & Others [2005(1) SCALE)
(iii) Indian Medical
Council Vs V.P.Shantha & Others (1995(6) SCC651)
Therefore
improvements in the existing Medicare systems are absolutely essential. “Health
is not a luxury”and “not be the sole possession of a privileged few”. It is a Fundamental Right of all present and
post Employees. The enjoyment of the highest attainable standard of health is
recognized as a fundamental right of all workers in terms of Article 21 read with
Article 39 for a 41, 43, 48A and all related Articles as pronounced by the
Supreme Court in Consumer Education and
Research Centre & Others vs Union of India (AIR 1995 Supreme
Court 922) The Supreme court has held that:
“the right to
health to a worker is an integral facet of meaningful right to life to have not
only a meaningful existence but also robust health and vigour. Therefore, the
right to health, medical aid to protect the health and vigour of a worker while
in service or post retirement is a fundamental right-to make life of a worker
meaningful and purposeful with dignity of person. Thus health care is not only a welfare measure but is a Fundamental Right”.
We suggest that, all the pensioners,
irrespective of pre-retiral class and status, be treated as same category of
citizens and the same homogenous group. There should be no class or category
based discrimination and all must be provided Health care services at par. We
also request the commission to recommend to govt. to make preventive health
care an essential ingredient of all
health care schemes for retired Persons. CGHS and RELHS should be expanded and
improved also CSMA Rules 1944 be extended to pensioners residing outside CGHS
Area.
7.2 Nursing Homes / All India Private Hospitals / Diagnostic
Centres to cater for the CGHS beneficiaries should be increased in such a way
that they will be nearer to the residence cluster of the beneficiaries. While
selecting great care should be taken that no beneficiary is required to travel
more than 2.5 KMs to obtain treatment. In Delhi, the recent approval for
hospitals has been done without keeping the distance of beneficiaries residence
localities. Some areas have been completely forgotten and some points have been
given more than one referrals. This appears well on paper and satisfies the
Ministry but in practical terms it is more a punishment for the beneficiaries.
7.3 We wish to invite attention of 7th CPC to the recommendation
made by the V CPC as detailed in Para 140.11 of their report regarding extension
of CGHS. Unfortunately, the well intentioned recommendation has remained still
as recommendation only. Under some plea or the other, there had been
practically no expansion whatsoever in this regard, which is regrettable. A
number of proposals had been forwarded to the government by the many pensioners
Associations but have been kept in cold storage. The 7th CPC is requested to
reiterate this important recommendation, suggesting opening of new CGHS
dispensaries as per prescribed norms securing clearance from Planning
Commission, wherever necessary.
7.4 Medical facilities to Pensioners:
Smart Cards to Pensioners: Smart Cards may be issued to all
Pensioners from all Department (including Postal Pensioners) and their
dependents for cashless and hassle less medical facilities across the country
in all Government hospitals; all NABH accredited Multi Super Speciality
Hospitals which have been allotted land at concessional rates or given any
other aid or concession by any Government; all CGHS, RELHS and ECHS empanelled
Hospitals.
·
No referral should be insisted in case of medical emergencies. For
the purpose of reference for hospitalization & reimbursement of expenditure
thereon other than in emergency cases Doctors/Medical officers working in
different Central/State Govt. department dispensaries/health units should be
recognized as Authorized Medical Attendant.
7.5 Discrimination to P&T Pensioners: The Central Government
Pensioners, whether they were beneficiaries or not while in service, are
permitted to join CGHS on retirement. However the Ministry of Health & FW
had issued an order dated 1.8.1996 according to which all P&T Pensioners
who were not participating in CGHS while in service have been debarred. This in
itself is a very grave discrimination, which is not permissible under Article
14 of the Constitution. This was therefore challenged in Courts and the latest
position achieved is that the Courts have held that the P&T Pensioners may
be permitted to participate in CGHS or alternatively covered under CS (MA)
Rules, 1944.
7.6 Postal Dispensaries: In the meantime, following the
recommendations of the V CPC and VI CPC, 19 P&T Dispensaries in 12 CGHS
Cities have been merged with the CGHS. Instead of now allowing all P&T
pensioners irrespective of the station they live, only those who are living in
these 12 Cities have been allowed to participate in the CGHS. This is also
discriminative because all other Central Pensioners are permitted to join CGHS
irrespective of the fact where they are living. It is therefore urged that the
7th CPC should recommend that the above discrimination is put an end to and all
P&T Pensioners may be allowed to participate in CGHS.
7.7 The Department of Post running its Postal (formerly P&T)
dispensaries in 45 cities for outdoor treatment to its working and retired
employees. Out of them 19 dispensaries in 12 cities have been merged with CGHS
where CGHS and Postal dispensaries co-existed, by Ministry of Health &
Family Welfare vide Notification dated 9.7.2013. Now there remains 33
dispensaries in cities namely, Vadodara, Agra, Moradabad, Saharanpur, Varansi,
Gorakhpur, Aligarh, Bareilly, Behrampur, Cuttack, Siliguri, Jalpaiguri,
Trichurapalli, Triunelveli, Ambala, Silchar, Dibrugarh, Guntur, Nellore,
Rajmundri, Vijayawada, Vishakhapatnam, Ajmer, Jodhpur, Kota, Dhanbad, Gaya,
Muzzafarpur, Chapra, Raipur, Amritsar and Jallandhar. In fact in these Postal
Dispensaries only outdoor treatment is given for serving and retired employees,
but for working employees indoor medical is given through either CS (MA) Rules
or by authorizing private hospitals like CGHS, (NO INDOOR FOR RETIRED
EMPLOYEES). From working employees no contribution is realized whereas yearly
contribution is realized from pensioners, on the other hand, in CGHS there is no
such discrimination between and retired employees with regard to treatment and
contribution both. IT IS BE NOTED THAT CGHS AND POSTAL DISPENSARIES BOTH WERE
FORMED UNDER THE CS (MA) RULES, THEN WHY THIS DISCRIMINATION EXISTS BETWEEN
CGHS AND POSTAL DISPENSARIEAS. The department of Posts is required to amend its
rules / instructions, so that the facilities / contribution is made available
to pensioners at per working employees alike CGHS.
The VII CPC may kindly consider the above state of discrimination between
serving Postal employees and Pensioners and recommend that Postal Pensioners
may also be provided indoor treatment under CS (MA) Rules.
7.8 Hospital Regulatory Authority: We suggest that a Hospital
Regulatory Authority shall be set up to ensure that the hospitals provide
reasonable care to Smart Card holders. This Authority can undertake periodical
revision of CGHS approved rates for several kinds of medical treatment as well
as for lab tests in consonance with the prevailing market conditions so that no
crisis develops like refusal of treatment by empanelled hospitals.
7.9 Fixed Medical Allowance: The Government fixed the rate of FMA
as 300/- per month to the Pensioners not covered under CGHS etc. Several
appeals for revision of this amount in a realistic manner to suite the
conditions prevailing on counts like Doctor‟s fees, cost of
medicines, rate of lab tests etc went in vain as the Government stoutly refused
to enhance this FMA in a reasonable manner. It can be seen that the Employees
Provident Fund Organisation under the Central Government’s Ministry of Labour
was paying a monthly FMA to its employees at the rate of 1200/- prior to 6th
CPC when the other Central Government employees were drawing only 100/- per month.
The same EPF Organisation came forward to enhance the said FMA from 1200/- to
2000/- per month w.e.f. 1st March, 2013 for the serving employees, EPF pensioners
and family pensioners. When an organisation under the same Central Government
has taken steps to suitably enhance the Fixed Medical Allowance in consonance
with the market conditions, there is no justification whatsoever for the Central
Government to adamantly refuse to keep this FMA at a lowest level of Rs.300/-
per month which everyone knows is totally inadequate to the medical needs of a
pensioner’s family. When pressed the Government have stated that as this
allowance was introduced by the V CPC, the enhancement of its rates will have
to be considered and recommended by another pay commission. We suggest that the
7th CPC recommend for refixation of FMA @ 2000/- per month plus DA thereon. In
addition this FMA shall be permitted to those pensioners who want to undergo
only Unani or Ayurveda or Homeopathy type of treatments even though they live
in areas covered by CGHS.
7.10 CS (MA) Rules 1944: In the interregnum period of permitting
all pensioners into the CGHS without any discrimination, the CSMA Rules, 1944
should be extended to pensioners living in non-CGHS areas and stations, which
are at present not covered by CGHS. As recommended by V CPC, vide Para 140.18
of their report, benefit of CS (MA) Rules, 1944 should be extended to
pensioners in non-CGHS areas at least to the extent of full reimbursement of
expenses incurred for hospitalization in a Government hospital or hospitals
recognized under CS (MA) Rules for the serving employees or those hospitals
recognised by State Governments for such purposes for their employees. To cite
examples, in the City of Mysore, a
number of hospitals have been recognized under CS (MA) Rules, 1944 for serving
Central Government employees. But Pensioners cannot avail the benefit merely
because there is no CGHS dispensary there. Similarly, in Udupi though the world-famous
“Kasturba Hospital” is recognised under CS (MA) Rules, 1944 for serving
employees, the Pensioners do not get the benefit merely because there is also
no CGHS dispensary available. “The benefit of the liberalised orders bearing
No. OM No.S-11011/7/99-CGHS(P) dated 27-4-20110f the MoH&FW can not be
availed by all pensioners living in non-CGHS areas as the order pre supposes
possession of a CGHS card by such pensioners.
7.11 Several cases of claims for reimbursement of medical expenses
incurred by pensioners living in non-CGHS areas have been decided in favour of
pensioners by the CATs and even the High Court of Gujrat at Ahmedabad. “All the
SLPs ( 34 in all ) filed by the government of India in this connection have
been dismissed by the Supreme court of India on 3-4-2012 and Government of
India had to issue orders directing all concerned to allow reimbursement of the
medical claims of pensioners concerned living in non-CGHS areas /Stations.7th
CPC is therefore requested to make suitable recommendation in this regard in
order that even if CGHS dispensaries are not opened, for whatever reasons they
may be, the Central Government pensioners may avail medical in-patient
facilities (in hospitals recognized under CS (MA) Rules, 1944 for serving
employees) and get reimbursement of expenses from the departments to which they
belong.
7.12 It is a fact that ESIC medical scheme caters for more than 35
millions of beneficiaries in the private factory employment sector. If the ESI
System with a network of 144 hospitals,
42 Annexes, 1400 dispensaries and tie up with 2041 private medical
practitioners besides with a large number of Super Specialty Hospitals can
provide medicare, why should not CGHS / CSMA cater for the medicare needs of
more than 40 lakhs of employees and more than 30 lakh of pensioners spread all
over the country like the ESIC beneficiaries? The 7th CPC may kindly examine
the feasibility of improving the present CGHS / CSMA formats to ensure Medicare
to all Central Government employees and Pensioners. There is no need absolutely
to scout for alternate method. The recommendation of the 5th CPC for suitably
amending CS (MA) Rules, 1944 for providing indoor medical attention to a very
small segment of Central Government Pensioners residing in non-CGHS areas
should not pose any insurmountable hurdles. It is fortunate that the nodal
Ministry viz., Ministry of Health and Family Welfare, has accepted the need for
Medicare to 60 plus retired personnel that they should not be deprived of the
medicare and the Judiciary have taken cognizance of this principle, there
should be no hesitation in amending the CS(MA)Rules, 1944 for providing in-door
attention to the retired employees.
CHAPTER – VIII
Miscellaneous
8.1 Pension and Dearness Relief and Fixed Medical Allowance to be
net of Income Tax.
The purchase value of pension gets reduced day by day due to
continuous high inflation and steep rise in cost of food items and medical
facilities. Retired persons / Senior citizens do not enjoy fully public goods
and service provided by Government for citizens due to lack of mobility and
many other factors. Their ability to pay tax reduced from year to year after
retirement due to ever-increasing expenditure on food, medicines and other
incidentals. Their net worth at year end gets reduced considerably compared to
the beginning of the year. Inflation, for a pensioner is much more than any
tax. It erodes the major part of the already inadequate pension. To enable
pensioners, at the fag end of their lives, to live in minimum comfort and to
cater for ever rising cost of living, they may be spared from paying Income Tax
on Pension and the DR – as recommended by 5th Pay Commission in para
167.11 of their report.
8.2 Housing: Central Government employees in occupation of
Government Staff Quarters on retirement are constrained to hire private
accommodation at exorbitant and prohibitive rental. They are per force to spend
a sizable portion of the pension on rent alone. While in services, though they
are entitled to get house building advance etc, most of them are unable to
avail the facility and construct house for the salary income they earn is
incapable of making the both ends meet. It is therefore necessary that a
provision is made for reserving a percentage of the number of residential units
constructed by the State / Central Housing Boards and Corporations, for outright
purchase of allotment on instalment basis to pensioners. We therefore suggest
that 10% of the total units constructed by the State Housing Boards, Central Housing
Corporations etc to be reserved for pensioners. Similarly quite a number of staff
quarters sometimes lie vacant without occupation by serving employees and such
quarters may be allotted for pensioners on payment of just licence fee only. In
addition, dormitory type single room tenements with common dining hall,
library, cultural centre, auditorium, basic medical facility etc may be
constructed at the outskirts of the cities and allotted to pensioners on
payment of a reasonable amount. Until such schemes are accepted and worked out,
HRA may be granted to the Pensioners on the same rates as is given to serving
employees.
8.3 Travel Concession: Senior Citizens on attaining the age of 60
years (Males) and 58 years (females) are given fare concession in Railway
travel at the rate of 40% and 50% respectively. We suggest that retired
Government Servants may be allowed the facility of travel concession once in 2
years to any place inside India from their place of their residence. We point
out that the purpose of granting LTC to serving employees has an in-built
advantage of encouraging tourism development, which is helpful to the economy
in several ways. Similarly any travel concession granted to Pensioners will
also boost the tourism development in the country besides bringing happiness at
their old age.
After retirement, most of the pensioners spend the
time on spiritual activities. They like
to visit important religious places in the country. The Commission’s attention is drawn to the
fact that Government of Punjab is granting Travel Concession to all its
pensioners by paying one month’s Basic Pension for every block of 2 years. It was introduced from 1/1/1989 and the
payment is made in January every two years (Source: Punjab Government letter
No.1/15/89-IFP-II/8078 dated 31/8/1989). In the past 25 years the cost of
everything has gone up. The Commission is requested to
recommend to the Government to pay 3 months Basic Pension as Travel concession and the
facility may be extended once in 2 years to all those pensioners/Family
Pensioners including family Pensioners other than spouse, who are at present
not getting travel facilities as departmental advantage.
8.4 In the last decade, the social fabric has undergone a drastic
change. The Indian Parliament had to
enact a law for the kith and kin to look after their parents. After the death of a pensioner,
cremation/burial has to take place in an honorable manner. Each religion has got its own custom and
rituals and the cost is very high. It is
to be noted that Andhra Pradesh Government is granting an amount of Rs.10,000/-
as ‘Death Relief’ to its pensioners, Family pensioners (Source: AP Govt. G.O.
MS.No.102 Finance (Pen.I) Department dated 6/4/2010 & G.O. M.S. No.136
dated 29/6/2011). The Commission is
requested to recommend an amount of Rs.10,000/- as ‘Death Relief’ in the event
of death of pensioner, pensioner’s spouse or Family Pensioner.
8.5 Family Security Fund: The family of the Pensioner shall be
granted a lump sum of 1,00,000 on the death of the Pensioner by introducing a
scheme for Family Security Fund with the arrangement for contribution by the
pensioners. At present such scheme is in existence in states like Tamilnadu,
where the Pensioner is contributing a monthly contribution of 80/- and in the
event of his / her death, the spouse is given a sum of Rs.50,000 as family
security fund. Therefore the 7th CPC is requested to examine this proposal for
framing such a scheme for facilitating payment of at least 1,00,000 rupees on
the demise of the pensioners to their spouses.
8.6 Pension Adalats: The system of Pension Adalat was introduced
initially by Department of Pension and Pensioners Welfare and later on adopted
by Railways, Defence, P&T
Departments. The V CPC in Para 139.17 had recommended that this system is very
effective in finalising disputed cases of pensions and should be introduced in all the departments. These
adalats should also function for settling the cases of field formations and
meet at least once in quarter. The representatives of he Pensioners Associations should be allowed
to present the cases of the concerned pensioner who may not be conversant with
the rules. The above recommendation which were not mandatory has not been
implemented. We therefore request 7th CPC that it should be made mandatory on
all the Ministries and Departments of Indian Government to conduct these
Adalats periodicaly and without fail. We also suggest that these Adalats may be
conducted at different levels with the following frequency:
i) Divsional level Once in 3 Months
(ii) Zonal / Regional level Once in 6 Months
(iii)Head quarter level Once in a Year
(iv)Ministerof State in DOPT level Once in 2 years
“The OM No. 44013/2/2010-Coord dated 25-3-2011 issued by the
Department of Pension & Pensioners’ Welfare is required to be amended
suitably.
8.7 SCOVA: The forum of SCOVA (Standing Committee of Voluntary Associations)
is facilitated by the Central Government for interaction with the Pensioners’
Organisations for discussing the issues of pensioners. This forum has no
statutory authority as negotiating forum
founded for negotiating issues of Central Government employees viz., the
National Council JCM with mandatory facility for compulsory arbitration and
other benefits like National Anomaly Committee to sort out the anomalies
arising out of implementation of Pay Commission reports etc. Similarly there is
no system of granting recognition to representative organisations of Pensioners
and at present it is at the pleasure of the Central Government to nominate any
representatives from any pensioner Associations. Some of the Pensioners
Organisations are invited to SCOVA as Members on a rotational basis only. The
number of central government pensioners belonging to various departments is no
doubt in great numbers and therefore there is necessity to establish a forum
with formal authority for discussing and negotiating issues of pensioners. It
can be seen that there are hundreds of pensioners’
federations, associations, organisations in the country like
mushroom growth and there is no orderliness amongst them and each and every
pensioner organisation is raising its own demands. There is no orderliness in
this system. Therefore, we suggest, that the VII CPC may recommend to the
Government to upgrade the status of the SCOVA like the other forum of National
Council JCM with separate Rules framed for granting recognition to Pensioners
Organisations to give them representation in the SCOVA. All the All India
Pensioners Associations/Federations may be accorded recognition & extended
such facilities as have been granted to the serving employees
Association/Unions/Federations. The SCOVA may be renamed as Joint National
Council of Pensioners Organisations. It should be a two tier system one at
National level and other Departmental Level.
8.8 Improvement of
ex-gratia to CPF/SRPF (C) retirees and their families:-
a)
Ex-Gratia payment to CPF / SRPF (C) pre 1.1.2006 retires and their
families / dependent children was sanctioned earlier as follows:-
CPF/SRPF (C) retirees Rs.600pm
+ Dearness relief from 1.11.1997
Widows and dependent
Children of deceased Rs.
605 pm + Dearness relief from CPF/SRPF (C) retirees 1.11.1997
b)
Subsequently these have been revised as follows:-
CPF/SRPF (C) retirees at time of retirement EX- Gratia
Group “A” Service Rs.3000
pm + DR
Group “B” Service Rs.1000
pm + DR
Group “C” Service
Rs.750
pm + DR
Group “D” Service Rs.650
pm + DR
Effective date: 1.11.2006
SRPF (C)
4.6.2013
CPF
Widows and
dependent
Children of
deceased Rs.645
pm + DR
CPF/SRPF (C) from
4.6.2013
Dearness ex-gratia as above is reckoned before applying dearness
relief.
c)
These amounts are utterly inadequate even for hand to mouth living
in the resent scenario of high cost of living and spiraling inflation. Request
were earlier made to grant one more pension – option to the surviving CPF/SRPF
(C) retirees or to grant them 1/3 rd pension as given to PSU absorbees, but the
same have not been agreed to.
8.9 We submit that VII
CPC may consider our following suggestion
Period for
service for granting ex-gratia in their cases should be brought down to 10 ears
as in the case of eligibility for pension. They should be granted one time
option for pension as recommended by the IV CPC . Minimum ex-gratia to the
beneficiary well as the family should be equivalent to minimum pension / family
pension of the grade in which they retired as revised from to time. It need to
be appreciated that they also had rendered satisfactory service to the
government. they worked in more arduous circumstances when the country was
relatively undeveloped with low salaries, incremental rates and promotional
avenue. They and their families should not be condemned with low rates of
ex-gratia and denial of several benefits extended to pensioners / family
pensioners for error of judgment on their part in not opting for pension when
options were extended because of their inability to foresee the development of
the country and the vast changes that have been taking place after their
retirement. They are a fast disappearing category and grant of full benefits on
par with pensioners will not cause any undue financial burden to the
government. in addition to revision of ex-gratia rates on par with pensions and
family pensions, they have also to be extended benefits such as same rates of
DR granted from to time, ex-gratia to their dependent unmarried / widowed /
divorced daughter above 25 years of age, fixed medical allowance, widow passes
to the families of deceased SRPF beneficiaries etc. India is a welfare state
and the discrimination going on against them all these years is against the
very letter and spirit of constitution of India and the concept of welfare
state embedded in the directive principles of state policy.
Admissibility of Ex-Gratia
to widowed / divorced / unmarried daughters
Family pension under CCs
(Pension) Rules, 1972 is being paid to eligible widowed / divorced / unmarried
daughtersbeyond the age of 25 years for life if they continue to be eligible
for payment of family pension. But in respect of the dependent widowed /
divorced / unmarried daughters of CPF / SRPF beneficiaries, payment of family
pension is stopped when they complete the age of 25 years. Hence it is
requested that the VII CPC my please recommend extension of the benefit
admissible to the above category of Central family pensioners to the dependent
of CPF / SRPF beneficiaries also.
8.10. Representations
in various committees : As recommended vide Vth CPC report
Vol III para 141.30 Pensioners’ representatives should be included in various
committees & other Fora of Govt where issues relating to the welfare of
pensioners are likely to be discussed & debated :
Discussing and deciding the matters relating to Pensioners, with
representatives other than those of pensioners, is unfair & against the
Rules of ‘Natural Justice’. At present various Committees like National Anomaly
Committee (NAC) and JCM (on Pensioner matters), are there, wherein matters /
policies relating to pensioners’ welfare are discussed and decided, but they do
not have pensioners’ representatives with the result their viewpoints,
hardships & anomalies are not properly represented. As pensioners are a
homogenous class, there is an urgent need to constitute separate Committees for
pensioners wherein matters / policies / anomalies relating to pensioners of all
Groups, categories & departments may be discussed.
8.11. Lingering Litigation on Pensioners matters
due to uncalled for Appeals by Government: Govt. should not indirectly
pressurize courts by appealing again & again to get judgments reversed in
its favor & must implement all
court judgments in
case of all similarly placed persons.
Fifth CPC recommended in para 126.5 that any Court Judgment
involving a common policy matter of pay/pension to a group of
employees/pensioners, should be extended automatically to similarly placed
employees/pensioners without driving every affected individual to the Courts of
law. This recommendation is never followed by GOI, with the result Pensioners
in the evening of their life, are forced to approach the legal forums,
seeking the same relief. This in turn, bulges court dockets.
The Commission is requested to recommend to the Government to
strictly follow the provisions on “filing of appeals in the National Litigation
Policy document dated 26.3.2010 issued by the then Hon’ble Minister for Law.
Seventh CPC is requested to look into this matter once again and
to issue suitable guidelines as deem fit and necessary.
8.13 Pension Act, 1871
(Act 23 of 1871):
The CCS (Pension) Rules,
1972 were notified under the powers vested under proviso to Art. 309 of the
Constitution and not under the Pension Act, 1871.
The Act is a legacy of the
former colonial Government The Pension Act 1871 is in the Statute Book but has
no relevance or reference to the pension format of the Central Government
employees but the Government is sticking to the archaic Act. it is to be
remembered that the Government, committed in the Parliament that it will be
revised and reflect the latest developments of social security. (refer Lok Sabha discussion on 10th
and 16th April 1981). Neither the Monitoring Committee of the
Parliament on Assurances nor the Government had taken any concrete steps in
revsing 1871 Act.
The Gajendragadkar Law
Commission had advised the Government of India to change the Pension Act, 1871
in 1972 but nothing was done.
S/Sri V.N. Gadgil and
Parulekar (the then, MPs) moved a substitute bill in the budget session of
Parliament in replacement of the Pension Act, 1871. The issue was discussed on
16th and 30th of April, 1981 Shri P. Venkatasubbiah, the
then Minister of State for Home Affairs gave an assurance of bringing in an
amendment to the Pension Act. (Incidentally, 82 MPs had s upported this move.)
Pensioners Association had
brought matter to the notice of the Government of India through SCOVA meeting.
The Following sections of
this Act violate the Constitution of India
(a) Section – 4: No Civil
Court shall entertain any suit relating to any pension.
(b) Section – 6: Shall
entertain suit only on receipt of a certificate from the Collector / Deputy
Commissioner that the case may be tried, but the court shall not make any order
by which the liability of Government to pension is affected.
The Following go against
the CCS (Pension) Rules, 1972:-
(a) Section - 5 :- The claim
for pension to be made to the collector / Deputy Coommissioner.
(b) Section – 8:- The Pension
payments to be made by the Collector / Deputy Commissioner
(C) Section – 15:- Confers
powers to the Central Government to make rules only to provide for nominations
under Section – 12 A.
The following are outdated
/ have no relevance to pension matters:
(a) Section – 7:- Relates to
pension for lands held under grants in perpetuity.
(b). Section – 9;- Relates to saving of rights of grantee of Land revenue.
(c) Section – 13:- Relates
to Grant of reward equivalent to amount of pension to those who inform about
persons receiving pension fraudulently or unduly.
No doubt, the subject
“Repeal of Pension Act, 1871” comes within the purview of the Law Commission. Two
years ago, the Department of Pension and Pensioners Welfare called for opinion
of Pensioner s Associations on this, but it stopped at that. Since this Act has
been used by the Government to frame the “Payment of Arrears of Pension
(Nomination) Rules, 1983, exercising Power under Section – 15 of this Act and
since Section – 11 of the Act is also current on date, it appears to be in the
fitness of things that the VI CPC suo moto examine this aspect and make
suitable recommendations to the Government”
The Vi CPC did not touch
the legal aspect of New pension Scheme and simply referred the matter to a
study team as mentioned in para 2.3, 2.4, and 2.5.
It is further to add that
the New pension Act 2013 was placed without repealing the pension Act1871, nor
repealing the CCS (Pension) rule 1972 which have been introduced in our country
as per provision of Article 30 of the Constitution of India. This action of the
Government of India appears to be in taking away the rights and privileges
guaranteed under the provision of Article 19 (i) (i), Article 39 of the Constitutioon
of India and is liable to be challenged before the country. The Apex Court has
already accepted a petition of land Acquisition Act and kept the new act
pending operation till judgment is delivered. The VII CPC may kindly examine
the need for contrivance of Pension Act 1981 as also the PFRDA Act 2013 and
recommend for their Repeal.
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