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.
No comments:
Post a Comment