MY
SUPPLEMENTARY RESPONSE TO MR SN’s POST ON ‘APPLICABILITY OF CCS PENSION RULES’
Mr SN, sometime ago, has more or less
penned his thoughts on the same wave length of mine. However, I thought I can
supplement his views by conveying my thoughts based on my understanding of the
issues in the context of the case before the Supreme Court. I could not respond
immediately because of some other urgent pre-occupations.
THE DHC JUDGMENT
The DHC judgment although
disappointing to pensioners as a whole, provided some partial relief to
pre-August 1997 retirees in the form of an improved DR formula, non-refund of
40 % interim relief paid by LIC and upgradation in minimum pension. Basically,the
Bench rejected the prayers of the six petitioners for upgradation of the
pensionagainst which SLPs have been filed before the Supreme Court for
adjudication.
Although pre-August 1997 retirees
have got some benefit by some improvement in the DR formula ordered by DHC,an
anomaly has been created in regard to the principle followed for modification
of the DR rate followed in the wage revisions effective from 1/8/1992 where the
DR rate fixation for each tapering slab
had followed a pattern depending on the
change in AICPI which has been unsettled by the DHC judgment. The only
anomaly that had to be rectified was the disparity between the DR formula for
retirees and the DA formula for in-service employees for the same period, which
the DHC failed to do.100% DR neutralisation
happened after 1/8/1997 and so what is of crucial relevance for
pre-August 1997 retirees is equitable neutralisation of DR with that of in-service employees for the period upto
31/7/1997.What is of importance from 1/8/1997 is the need for
upgradation of pension for all generations of pensioners,past,present
and future.
The relief provided by the DHC by way
of upgradation of minimum pension although intended to remove violation of
Article 21 has in its wake created another discrimination in the sense that
borderlineregular and family pensioners who are drawing just a few rupees above
the minimum pension are not fortunate enough to get the relief but instead have
to draw less gross pension than the ‘minimum pensioners’ besides being deprived
of arrears. This effectively means that Article 21 continues to be violated
because right to life extends beyond sustenance to ‘right to living with
dignity’ which is denied to the pensioners who are on upper borderline to
‘minimum pensioners’. While the number of minimum pension cases may be confined
to a small number of regular pensioners in the lower cadres with substantially
lower period than that of the required qualifying service of 33 years, the
number affected among family pensioners may be much more because of the
dismally low rate provided by the family pension formula which-like everything
else- remains static in our Pension Rules. Interestingly, the fixation of
minimum pension for post July 2012 retirees has been done in such a manner that
the retirees of the period 1/8/2007 to 31/7/2012 are better off without
upgradation in minimum pension.
The distinction drawn between ‘Pay as
you go’ approach and ‘Actuarial and Annuity Method’ makes very little legal
sense considering that both are different approaches to fulfil the same object,
viz, that of fulfilling a legal obligation of payment of pension to employees,
be it the Central Government or LIC.
Much is made of the so called
“self-funded’ scheme.Let us be clear that LIC Employees’ Pension Scheme is not
a self funded scheme, but an additionally funded scheme as is evident from
additional contributions made to the Pension Fund every year as a result of the
annual actuarial valuation. Being a funded scheme is not an impediment for
upgradation; if it is so, it also makes the existing pension payment unsustainable.
The basic question is whether upgradation of pension is warranted or not in
terms of Article 14 and 21 of the Constitution. If this question is answered in
the affirmative, then whether it is a funded scheme or any other kind of scheme
makes no difference.
The Rule 55B seems to have been kept
hidden from the public domain until it was discovered by the pensioners
themselves after the Jaipur Bench judgment. Even though the Notification
05/09/2005 regarding wage revision w.e.f. 1/8/2002 is appearing as a footnote
in the LIC Pension Rules 1995 which is in public domain, Rule 55 B which was
inserted by a Notification dated 13/8/2001, the section is conspicuous by its
absence in the copy displayed in the LIC web-site. Thiswas brought into public
notice only in the Writ Petitions filed before the Delhi High Court. This is
the rule that is very crucial forus in conjunction with Rule 5(3), Rule 11, and
Rule 13(b) for our current fight in the SC.
If CCS Pension Rules are applied to
LIC Pension Rules under Rule 56, the following incidental benefits beyond
upgradation should also accrue to LIC pensioners:
1.
Improvement in the formula
for computing average emoluments;
2.
Full pension after
completing 20 years of service;
3.
Increase in the family
pension rate of 30% of last pay;
4.
Increased pension after
completion of 80 years of age.
It is
settled law that pension is deferred wage in recognition of past service
rendered and is not a bounty, but a right. So, it carries with it all the
properties of ‘salary’. When there is a revision of salary periodically, there
has to be a revision of pension as well.
Mere index-
linking to pension does not compensate for the loss of capital value of the
basic pension. The quarterly or half-yearly revision of DR based on AICPI is
just to give relief to employees/pensioners against the increase in the cost of
living faced by them in the short to medium term. But inflation erodes the
capital value of the salary/basic pension which constitutes a financial asset.
For salaries ofLIC employees five-yearly wage revision off-sets the effect of
inflation. In case of Central Government employees ten- yearly revisions of
salaries as well as pension are provided for the same purpose. It defies reason
and logic that upgradation of pension has been denied to LIC Pensioners despite
Rule 56 which is crystal clear.
Let us hope
that these issues are adequately argued before the Apex Court and justice secured for LIC pensioners.
Greetings.
C H
Mahadevan
