A Writeup for Final, Sharp, Penetrating Submissions to SC Bench by Sr Counsel

A Writeup for Final, Sharp, Penetrating Submissions to SC Bench by Sr Counsel

 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.

R.V.RAMESH

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