A Writeup for Final, Sharp, Penetrating Submissions to SC Bench by Sr Counsel
R.V.RAMESH
1)The LIC of India (Employees) Pension Rules 1995 is not an additional benefit to employees but an optional scheme only.
i)The
most important thing is that our lawyers and more particularly our
Senior Advocate should abundantly make it very clear to the Hon'ble
Judges of the SC that the pension offered to LIC employees under the
LIC of India (Employees) Pension Rules 1995 was not an additional benefit to the employees but only an optional scheme in lieu of the pre-existing Provident Fund Scheme and loaded with a big onerous pre-conditionthat the employees should surrender
their entireP.F accumulations along with interest accrued together with
interest thereon till the date of exercising their option.
ii)It must be emphasized before the Court that each and every employee in service or who had retired and who opted for the Pension Scheme, had
refunded his entire life time PF accumulations inclusive of accrued
interest with interest thereon up to the date of exercising the option
to LIC of India in the pious hope that in the twilight of his life, the
LIC Mgmt. would extend the same pattern of benefit to him as the benefit
that would be offered by LIC Mgmt. to the in service employees in the
successive Wage Settlements in future .
2)M.O.U. dt. 14-1-1994 signed by LIC Mgmt. with in-service Employee Unions before implementation of the Pension Scheme
i)This is a very important and sacrosanct agreement documentoutlining some lofty principles to be followed. It was agreed upon that
Dearness Relief to pensioners will be granted on basic pension at such
rates as may be determined from time to time in line with the Dearness
Allowance formula for in service employees. Under any
universally accepted Pension Scheme, '' basic pension " is generally
half of the basic pay at the time of retirement. For revising DA to in
service employees, the entire pay range in the organization irrespective
of the hierarchy / class or cadre is divided into specific slabs of
pay and a higher percentage of neutralization (of CPI Index) is
applied to the first few slabs pf pay, and a gradually reducing
neutralization to the subsequent slabs of pay to determine the DA
payable . To
be equitable, following the same pattern,the slabs of pension and the
percentage of neutralization should be the same as that of the pay slabs
mentioned above in order to determine the DR payable to the pensioners.
ii) However, the Pension Rules 1995 contained a villain in the form
of Appendix IV, which provided reduction of slabs of DR to half—as a
result, in one stroke the DR got reduced to about 50% . This was a stab
in the back of the pensioner and a gross violation of the principles
enshrined in the M.O.U. This is highly arbitrary and discriminatory and
the rectification of this truncated DR imposed on Pre 1997 LIC Retirees
still eludes them and they continue to draw during the last 2 decades
the same ''basic pension" based on the last pay fixed for them at the
time of their retirement, thus creating wide disparity among different
classes of pensioners based on their dates of retirement.
iii)Fairness and Equity demand that the pattern of DR Fixation and
Upgradation and Revision of Pension should have been the same as that of
DA Fixation and upgradation and Revision of pay for in service
employees during the successive Wage Settlements for in service
employees.
iv) Basic Principles of fairness and prudence and financial canons of
equity and justice should be strictly observed by the LIC Mgmt. Other
parameters and limits of ratios in the matter of deciding the different
pay scales between the lowest and the highest cadres and the
consequential relativity in pay scales amongst the different cadres
should be maintained for a workable solution.
3)Index linked Pension is a misnomer
i)An
index linked pension by its very nature presupposes that the "basic
pension" determined and fixed at the time of retirement of any employee
will be upgraded /revised by merging a part of DR to the "basic
pension" to arrive at the "revised pension" and the neutralization
factor based on the then prevailing CPI Index will be applied on that "
revised pension" to arrive at the consolidated pension payable to the
pensioners.
ii)It must also be noted that nowhere in the Pension Rules 1995
document it is stated that the "basic pension" will never be revised.
iii)It must also be equally emphasized that nowhere on the Pension Rule
1995 document , it is stated that only the "basic pension" fixed at the
time of retirement will be paid to the pensioner till the end of his
life.
iv)Neither do we have any amendments in this regard nor do we have any
option for the pensioner to exit or withdraw from this pension Scheme
which in its present form has become a millstone round his neck.
v)But,
LIC Mgmt. all these years has insisted that the "basic pension" fixed
at the time of retirement say for example 20 yrsback , cannot be
revised at all , and also asserts that neutralization based on the
current CPI Index will only be applied on the "basic pension" fixed at
the time of retirement 20 yrs back to arrive at the current pension
payable to him. This
is not only anachronistic and illogical, but also arbitrary, unfair,
unethical, and discriminatory and violative of the Fundamental Rights
of equity and equality and right to live with dignity under Articles
14,16, and 21 guaranteed under our Constitution.
The LIC Pensioners number is 46,000 . Many of the pre1997 pensioners
are in their 80 s and many more are in the late 70s . While our Court
cases are going on during the last 2 decades, 16,000 of them have died
without even seeing any revision in their pension and LIC Mgmt. and GOI
is solely responsible for this tragedy.
vi) It must also be mentioned here that there
was no pay revision for Class I officers for 10 long yrs from 1973 to
1983. But promotion from clerical to class I cadre of course continued.
No compensation for this huge loss has been made by LIC Mgmt. and the
pre 1997 pensioners are again the most affected group here.
vii) The
delaying tactics of the LIC Mgmt. is akin to their using a sledge
hammer to kill flies . GOI'S attitude is more despicable. It uses LIC as
a milchcow for whatever purpose and whenever it wants .
GOI is very benevolent to its own Central Government servants offering
their own very senior citizens accelerated pensions from age 80 onwards
and even allows doubling of their pensions at higher ages, while
in the case of LIC which is a Maharathna financially in every sense
of the term, they are standing in the way of LIC Mgmt. granting even the
standardized and time honoured revision of pension to LIC Pensioner
employees .viii)This
act of GOI is vindictive, patently partial, arbitrary, unfair,
discriminatory and violative of the Fundamental Rights of equity and
equality and the right to live with dignity under Articles 14.16.and 21
guaranteed under our Constitution.
4)Provisions in LIC Pension Rules 1995 for Pension upgradation/Revision
The clear provisions are :- Chapter iii of Pension Rules 1995 states:-
Rule 5(2) creating a separate LIC of India (Employee) Pension Fund, " the Rule states that the fund shall have for its
sole purpose the provisions of the payment of Pension or Family
Pension in accordance with these rules to the employee or his family".
Rule 5(3):- forcefully and specifically confirms that "the
Corporation shall be a contributor to the Fund and shall ensure that
the sufficient sums are placed in it to enable the Trustees to make due
payments to beneficiaries under the Rules".
Rule 13(b):-
The Trust shall, subject to the availability of the additional sums in
the Fund to be provided by the Corporation as required under Rule 5(3) purchase
additional annuities as and when it becomes necessary to revise upwards
the benefits payable in accordance with these Rules.
LIC
Pension Funding is strong being built and administered on sound,
prudent and scientific lines. The New Pension Scheme (NPS) had come into
force in LIC w.e.f -1-5-2010 , and all
new recruits of the last 8 yrs and further new recruitment will not
come under the purview of pension upgradation, and hence , pension
payment under the LIC Pension Rules 1995 has become a close ended
scheme.
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