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Shri.A K Dasgupta
Managing Director,
LIC of India
Yogakshema,
MUMBAI
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Dear Sir,
Re: Anomaly in computing the Basic Pension of Retiree Pensioners.
Regarding the captioned subject, we had written to you on 31-01-2011 (the letter is reproduced below). You may please recall that, as a follow up, NOIP delegation met you personally on 21-04-2011 and discussed the anomaly in detail and handed over a file to you containing the work sheets in respect of some representative cases in this regard. You were kind enough to assure that it is a matter worth consideration by you personally and sent the papers to P&IR Dept for further action. You also hinted that the matter would be decided before you retire on 31-01-2012 . We were happy that the seriousness of the matter was seized by you inviting your personal look into the matter.
As nothing was forthcoming, NOIP delegation met Director (Personnel) (we could not get your appointment then), on 26-08-2011 to know the position in this regard. To our dismay, we came to know that the matter is not yet initiated by the Dept, though D (P) assured us to do something to undo the anomaly.
Almost 80 days have elapsed since then; nothing is heard from your side. We may reiterate that it a most vexed problem which has affected thousands of pensioners retiring within 10 months from the effective date of each wage settlement. And hence your personal look into the matter is warranted and desired.
We once again implore upon you to immediately initiate action in this regard and see that before you lay office on 31st January 2012 , affected pensioners would hope to get justice.
We would again meet you shortly in this connection.
Thanking you and anticipating your earliest action,
Yours faithfully,
Ashok J Joshi
Working President, NOIP.
Letter written on 30.01.2011:
Date.30-01-2011
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Shri. A K Dasgupta,
Managing Director,
Life Insurance Corporation of India
Yogakshema, MUMBAI
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Dear Sir,
Re: Anomaly in re-fixing Basic Pension after every wage revision.
You may please recollect Sir, that when the delegation of NOIP met your good self on 19-11-2010, to discuss various pending issues relating to Pensioners, we had quoted one representative case of anomaly wherein there was reduction in gross pension for those retired in the month of August 2002 (and probably up to January 2003) on account of deficient rule in computing Basic Pension of LIC employees. We had requested to follow the CCS (Pension) Rules of Central Govt for computing the Basic Pension, to avoid the anomaly. You had advised us to refer the particular case to your personal attention for initiating steps to redress the grievance. Hence, after getting the details from one of such pensioners, we are giving here below the particulars for your kind attention and necessary action.
Name: Shri. R G Poornachandra Rao , AO (Retd), SR No.516147, Pension File No. 147
206, Seshadri Heights HYDERABAD-
Date of Retirement: 31-08-2002
As on 01-09-2002 his gross pension was Rs.8991-27
After wage revision effective from 01-08-2002 , his revised gross pension was re-fixed at Rs.8149-88 resulting in reduction of gross pension of Rs.841.39
Consequent upon wage revision, DA payable was reduced, resulting in reduction of gross pension and in his case an amount Rs.98253-73 was recovered as DA difference.
We have enclosed herewith the calculation sheets to elaborate the anomaly, for your ready reference.
After closely perusing such type of anomaly, it is proved beyond doubt that the method of computing pension in LIC for retired officials suffers from a major deficiency. The relevant paragraph reads as “In the case of an employee retiring in accordance with the provisions of the service rules or of the Staff Regulations after completing a qualifying service of not less than 33 years the amount of basic pension shall be calculated at 50% of the last 10 months’ average emoluments prior to the date of retirement.”
This method of calculation of basic pension suffers from severe deficiencies especially at the time of every wage revision for existing employees. Those employees retiring within say about 6 months from the date of new wage revision suffer reduction in gross pension for three reasons (1) Rate of DA will be lesser (2) DA at the beginning is zero (3) For average emoluments old basic is counted for a majority of months (in total 10 months).
This may be the reason the Central Govt came with amended rules.
After the Vth Pay Commission for Central Govt employees, the Central Govt came out with the OM of 17-12-1998 that with effect from 01-01-1996, pension of all pensioners irrespective of their date of retirement shall not be less than 50% of the minimum pay in the revised scale of pay introduced with effect from 01-01-1996 of the post last held by the pensioner/deceased Govt Employee.
This position was further reviewed by the VIth Pay Commission for the Central Govt Employees which came into effect from 01-01-2006 .
The Commission modified the CCS (Pension) Rules, 1972 that will enable payment of pension at the rate of 50% of average emoluments for the past 10 months / last pay drawn whichever is beneficial without linking to the qualifying service of 33 years for full pension.
Justice, Equity, Pragmatic approach demand that the pension of retirees of LICI be computed as per the modified definition of VIth Pay Commission, quoted above.
Rule 56 of LIC (Employees’) Pension Rules- Residuary Provisions, expressly say that ‘Matters relating to pension and other benefits in respect of which no express provision has been made in these rules shall be governed by the corresponding provisions contained in the Central Civil Services (Pension) Rules, 1972 or the Central Civil Services (Commutation of Pension) Rules, 1981 applicable for Central Govt Employees.
In view of the above facts and legal provisions, it is incumbent upon the LIC management to compute the Basic Pension as per the VIth Pay Commission’s amended provisions, so that the anomaly in question can be done away with.
The above case of Mr.Poornachandra Rao is only a representative case and there are more such cases of anomaly with every wage revision in LIC.
As such, Justice, Equity, Fair Play demand that the Basic Pension be fixed as per the provisions of VIth pay Commission as detailed above.
In view of the above we pray as follows,
(1) Initiate the steps to amend the LIC (Employees’) Pension Rules, 1995 regarding computation of Basic Pension, taking 50% of the average emoluments of last 10 months or 50% of last pay drawn, whichever is beneficial to the retiring employee,
(2) Arrange orders to re-fix the Basic Pension of Mr.Poornachandra Rao in the captioned case by taking 50% of last pay drawn for computing the Basic Pension and,
(3) Pass orders to review all such cases of anomaly right from wage revision effective from 01-08-1997 and thereafter 01-08-2002 and the latest 01-08-2007 , where retirees have suffered reduction in Gross Pension.
We fervently hope that your good self would view the matter with all the seriousness it deserves and take steps to pass necessary orders as prayed above.
With regards and thanks,
Yours Sincerely,
Ashok J Joshi
(Working President, NOIP-BMS)
Encl: As above.
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