BCPC Final Memorandum to 7th CPC
BHARAT CENTRAL PENSIONERS CONFEDERATION
13-C,Ferozshah Road, New Delhi-110 001
Mobile No. 9868244035
Dated 20th June, 2014
To
All Pensiioners
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
or
We have not included departmental specific issues like RELHS/BSNL etc., in this
common draft.
Concern 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
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
A.
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.
B.
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.
C.
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.
D.
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.
E.
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
F.
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.
G.
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.
H.
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.
BCPC Final Memorandum to 7th CPC
BHARAT CENTRAL PENSIONERS CONFEDERATION
13-C,Ferozshah Road, New Delhi-110 001
Mobile No. 9868244035
Dated 20th June, 2014
To
All Pensiioners
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
or
We have not included departmental specific issues like RELHS/BSNL etc., in this
common draft.
Concern 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
A.
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.
B.
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.
C.
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.
D.
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.
E.
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
F.
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.
G.
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.
H.
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.
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.
Exp:56%
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