Need Corrections in Write Up for Final Submissions Prepared by Shri R V Ramesh

Need Corrections in Write Up for Final Submissions Prepared by Shri R V Ramesh

I wish to respond on the points raised by Shri Ramesh in his detailed write up which has lot of material relevance to our desired strategy for final arguments in the Supreme Court when our SLPs come up for admission and hearing on 24/7/2018.

1.No doubt our Pension Scheme is not an additional scheme but a scheme in lieu of payment of Corporation's Contribution of PF on retirement with an option provided  for retirees and employees to join the scheme when it was notified in 1995.But the Scheme was compulsory for employees joining the Corporation from the date of the Notification.It cannot be strictly be termed a substitution scheme for the CPF Scheme because actuarially the Corporation's  10% share of  Contribution to PF is not sufficient for the Pension Fund to meet its defined benefit liabilities towards the pensioners and hence LIC is required to make additional contribution to the Pension Fund every year based on actuarial valuation of the Fund at the end of every financial year.So our ground for claiming upgradation of pension should be adduced by invoking the settled position that  pension is deferred wage and hence whenever wage revision takes place pension should also get upwardly revised.This is the rationale behind the periodical upgradation of pension for Central Government employees .As our Pension Scheme is admittedly patterned on CCS Pension Rules, it is only fair that the same rules should be made applicable to LIC Pensioners also considering the clear provisions in Rule 56.Added to that is Rule 55 B which is discriminatory as it provides benefits applicable to Central Government pensioners to officers in the cadre of Chairman and MD even though they are also governed by the same Pension Rules as pensioners from lower cadres.

2.I do not think that we can invoke the MOU dated 14/1/1994.The point of same DR as DA applicable in the Corporation was dealt with in the SB judgment of Jaipur dated 12/1/2010.The MOU has been superseded by the Notification issued by the GOI on 28/6/1995.The MOU ,in my opinion, cannot have the force of law considering that it was between the unions and the LIC Management and the GOI was no party to the MOU. The GOI notified the Pension Rules 1995 after considering the recommendations of the LIC Management.Also the MOU was not on the exclusive subject matter of Pension Scheme but also for cooperation of employees for  IT front end modules.In the Union Bank case which recently went against the pensioners,the bipartite settlement entered into  on 29/10/1993 by the Bank unions and the IBA  was not recognised by the Supreme Court.So it is better not to stress on the MOU but rather fight on constitutional grounds of violation of Articles 14 & 21 as DR anomaly  for pre-August 1997 retirees arose due to disparity in DR formula between retirees and in-service employees upto 31/7/1997 which was not the case for post July 1997 retirees.

Another point that I wish to stress is that resolving DR anomaly for pre-August 1997 retirees and upgradation of pension are inseparable as Board Resolution dated 24/11/2001  clearly provided for the same.Even the calculation of the 40% IR as also the earlier payments made by LIC in Jaipur and Chandigarh were done by merger of DR with Basic Pension and revising the Basic Pension as at 1/8/1997 although incorrectly. 

3.The Index-linked  pension simply means linking DR on the Basic Pension to the AICPI so that increase can be given in tandem with increase in cost of living once in 6 months.It does not imply upgradation of pension.But that does not mean upgradation of pension is not warranted. The capital value of basic pension has undergone an erosion at a compounded rate of 6.3% p.a over the last 22 years for the earliest generation of pensioners.The in-service employees get protection against such erosion through five yearly wage revisions while pensioners have got stuck up at  the basic pension fixed long ago.The Central Government pensioners are well protected against such erosion.This point needs to be emphasized before the Supreme Court.

Mr Ramesh has mentioned that 16000 pre-August 1997 retirees have  died during the two decades.Do we have authentic figures to prove this obtained by invoking RTI Act 2005? There were 21762 pre-August 1997 pensioners on 1/8/2003 and about 17000 pensioners were identified in 2016 by LIC for payment of 40 % IR.So probably 5000 pensioners died  between 2003 & 2016.I do not know how many pensioners were alive on 1/8/1997.I asked for the information from CO under RTI Act, but I did not get the information.

4.The rules quoted by Mr Ramesh from Chapter III  are definitely strong grounds for us to  take in our arguments in the SC.

The LIC Pension Scheme is restricted to  existing employees and closed to new recruits  from 1/4/2010 and not from 1/5/2010.

Greetings.

C H Mahadevan