Monday, 19 September 2011

News letter 17.09.2011

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Dispensing with linkage of full pension with 33 years qualifying service, recommended by Sixth Central Pay Commission – An Analytical Report and Plea on behalf of aggrieved Pre-1/1/2006 pensioners.

The Sixth Central Pay Commission refers to the above proposal in its introductory Paragraphs 1.2.12 (Changes in Pension rules) and 1.2.15 (Pension) and later 6.5.1 (Date of effect, etc.) of its Report, while making the actual Recommendation in Paragraph 5.1.33. The background and the reason why this recommendation was made has been clearly explained by the Commission in the last cited Para, the underlying idea being to offer an incentive to employees with minimum pensionable service for leaving Government service at an early age in pursuit of alternative career, if they so desire.

Significantly there is not a single word from the Commission in this voluminous Report as to the fate of the past pensioners (pre-1/1/2006) with less than 33 years qualifying service now drawing proportionate pension, despite they being the ones directly coming into the picture by this recommendation and also as to how the Recommendation is to be implemented, even though there had been ample scope to incorporate the same in the Paragraphs referred to above, viz., in Para 1.2.12 that has recommended modifications to be made in CCS (Pension) Rules, 1972, not to mention the main Para 5.1.33 itself, besides in Para 1.2.25 that specifically dealt with implementation of the Commission's recommendations!

The Commission states in the same Para 5.1.33 that "With this, qualifying service will cease to have any relevance as full pension will be payable once minimum pensionable service is put in without any reference to qualifying service", in the context of discussing about the prospects of serving employees. With assurance to whomsoever it may concern that it is not intended to quote this statement from the Commission out of context, it is pointed out that this has unfortunately raised a serious doubt whether the past pensioners (pre-1/1/2006) with their 21 to 32 years of faithful, onerous and distinguished services rendered to Government, now drawing proportionate pension, also ceased to have any relevance in the scheme of things recommended, since, as already stated, there has not been a single mention about them and the present situation also appears to be so. 

Pay Commissions are supposed to take care of the interests of all pensioners as a whole including the past pensioners (Pre-1/1/2006), as they have also an inherent responsibility to ensure that the existing disparity between past and present pensioners is not unduly disturbed. A line in addition in Para 5.1.33 to the effect that this recommendation, viz., dispensing with linkage of full pension with 33 years of qualifying service would apply to all pensioners, past (pre-1/1/2006) and present (post-1/1/2006), drawing proportionate pension, would have met the demands of justice to a great extent and would have also gone a long way in bringing past pensioners some relief, especially for those in lower categories. For the same reason while proposing prospective date for implementation of this recommendation, the Commission could have made it applicable to all pensioners, but barring, of course, payment of arrears arising there from up to that date. There is no intention to blame the Commission, since in its wisdom, it thought that this task was best left to the Government for its consideration. So it became the turn of the Government to implement this recommendation with that end in view amongst other things, but unfortunately the Government chose to act differently by denying any benefit to past pensioners, as stated in succeeding paragraphs. 

Three years have passed since this recommendation was brought into force and it is time for some re-appraisal, an agonising re-appraisal, so to say.  Many employees must have availed the incentive for taking up their other preferences, about which we do not know. But what we do know is the manner in which it has been implemented with regard to pensioners, past and present, drawing proportionate pension. The Government was correct in straightaway bringing the present pensioners (post-1/1/2006) with more than 20 years pensionable service into the new order, namely, granting them full pension. But why was this benevolence denied to past pensioners (pre-1/1/2006) with services rendered by them ranging from 21 to 32 years? Was it for the simple reason that they had the misfortune to have been on the other side of the so called ‘cut off date 1/1/2006’? Is this their fault?  Is it not discriminatory? It is seen that the prospective date proposed by the Commission for implementation of this recommendation is also treated as the cut off date by the authorities ignoring completely the interests of past pensioners (Pre-1/1/2006) thereby indicating absence of any due diligence on their part before taking such a conscious decision that entailed far reaching consequences. The demands of justice will have been met, if the past pensioners (Pre-1/1/2006) were also extended the benefit, inasmuch as the present pensioners (Post-1/1/2006) were actually given the benefit, whereas the Commission’s Recommendation appeared applicable only to the future retirees governed by the New Pension Scheme introduced from 1/1/2004.

Apropos the cut off date, it would be recalled that the implementation was given effect originally from 2/9/2008 in which the present pensioners (post 1/1/2006) were also denied full pension and status quo was maintained for them. It is after some time that the order was reversed and 1/1/2006 was fixed retrospectively as the new cut off date and the present pensioners referred to above were given their due. Why was this not extended to the past pensioners, in whose case, it would have been only payment of the difference between the proportionate pension they received and the full pension that would have been only a pittance?

It is clear from the above that the policy makers were themselves a bit confused, perhaps genuinely, over the implementation of this recommendation. Reports of the consequences or rather the repercussions of what is considered as an incorrect implementation are pouring in. The DISPARITY between the homogenous groups in every category and scale between the past and present pensioners that existed before implementation has been violently disturbed due to this thoughtless implementation. There have been reports of the juniors in the set up before implementation having ended up drawing higher pension after implementation, of course without taking into account the additional benefits the present pensioners would have received thanks to the revised pay/pension structure introduced by the Commission. It is really unbelievable that such inconsistencies have been the result of a Government order. To sum up, the changes made seem to be arbitrary, discriminatory and lacking in logic.

The Government's foremost duty in pension cases, especially while implementing Pay Commission's recommendations, is to ensure that disparity between homogenous groups is not widened artificially, as in instant case. The Sixth CPC's Recommendation dispensing with linkage of full pension with 33 years qualifying service has been confirmed by a Gazetted Government Resolution dated 29/8/2008 and so it is deemed to be already in the Statute Book. So there cannot be any problem for authorities in literally following this new statutory Rule, which is supposed to be common to all pensioners, by extending the same to past pensioners also, thereby removing the old Rule from any operation with immediate effect. Otherwise, the Government, by virtue of issue of its present order, will be/is following two rules, one old and one new, meting out different treatment to two groups of pensioners, who were in one and the same homogenous group before implementation of the recommendation, which fact may not stand scrutiny in Courts. Further, despite the Commission's clear recommendation, the Government would be operating the old rule for not less than 50 years at the most under its present order, which could not have been the intention of the Commission nor of its own. So it is hoped that the Government would re-consider this particular implementation measure and set right the inconsistencies pointed out in this and the paragraphs supra without further loss of time.

As for financial implication, it is after all a small difference between the present proportionate pension and the full pension. The total outgo on this account is expected to be a very small fraction of the total expenditure on pension revisions computed after implementation of the Sixth CPC's recommendations. It will be most unfortunate and also a bit unethical, if 'savings' are shown from all pension revisions in general and on account of denial of this small benefit to the past pensioners in particular. The country will not suffer bankruptcy by the grant of this small benefit, for sure.

This write-up is only about the Commission’s recommendation for dispensing with linkage of full pension with 33 years qualifying service and its implementation by Government. It is written without prejudice to the past pensioners’ (Pre-1/1/2006) other claims for complete parity, modified parity (recommended and accepted), etc. made by them separately.

An analysis of the Judgments of the higher Courts that were in favour of the pensioners will show that almost all these were on the issue of disparity. Only wide disparity and unprincipled and illogical manner, in which the disparity aspects were abused as in the present case, have been taken up severely by the Courts.

K.S.Sitaraman, A Senior Citizen.  
(Life member RREWA)

RREWA propose following changes In the Draft National Policy on Older Persons 2011

I. Income security in old age
Following may be added:
4.With respect to Central/state Govt, Semi Govt. & PSU pensioners: A minimum Pension to ensure dignity and  self respect at a standard equivalent to the pre-retirement level shall be ensured and parity in pension of pre & post  Pay commission pay commission retirees shall be maintained to ensure compliance to the honorable supreme court judgment  in the famous  case of : D.S. NAKARA & OTHERS   Vs   :  UNION OF INDIA DATE OF JUDGMENT   17/12/1982 ( 1983 AIR  130 ,1983 SCR  (2) 165,  1983 SCC  (1) 305,1982 SCALE  (2)1213 )

5. Retired persons from Govt.& quasi Govt. bodies and industrial workers to a large extent depend on the returns from accumulation in their provident fund, gratuity etc through and safe investment of funds. Issue involved will be given careful consideration to ensure adequate secured return on Sr citizen investments. It will be ensured that settlement of Pension, Provident fund, gratuity and other retirement benefits is made promptly and superannuated persons are not put to hardship due to administrative lapses. Accountability for delays will be fixed. Redressal mechanisms for superannuated persons will ensure Prompt, fair and humane treatment. Widows will be given special consideration in the matter of settlement of benefits occurring to them on demise of their husband.

6.Article 27 to 32 of the existing NPOP need to be retained i.e.
6 Following .Articles( 27 to 31) of the existing NPOP need to be retained i.e.
27. Pension is a much, sought after income security scheme. The base of pension coverage needs to be considerably expanded. It would be necessary to facilitate the establishment of pension schemes both in the private as well as in the public sector for self-employed and salaried persons in non-governmental employment, with provision for employers also to contribute. Paramount considerations in regard to pension schemes are total security, flexibility, liquidity and maximization of returns. Pension Funds will function under the watchful eye of a strong regulatory authority which lays down the investment norms and provide strong safeguards.
28. Taxation policies will reflect sensitivity to the financial problems of older persons which accelerate due to very high costs of medical and nursing care, transportations and support services needed at home. Organizations of senior citizens have been demanding a much higher standard deduction for them and a standard annual rebate for medical treatment, whether domiciliary or hospital based, in cases where superannuated persons do not get medical coverage from their erstwhile employers. There are also demands that some tax relief must be given to son or daughter when old parents co-reside and also allow some tax rebate for medical expenses. These and other proposals of tax relief will be considered.
29. Long term savings instruments will be promoted to reach both rural and urban areas. It will be necessary for the contributors to feel assured that the payments at the end of the stipulated period are attractive enough to take care of the likely erosion in purchasing power due to erosion. Earners will be motivated to save in their active working years for financial security in old age. Pre-retirement counseling programmes will be promoted and assisted.
31. Employment in income generating activities after superannuation should be the choice of the individual. Organisations which provide career guidance, training and orientation, and support services will be assisted. Programmes of non-governmental organizations for generating incomes of old persons will be encouraged. Age related discrimination in the matter of entitlement to credit, marketing and other facilities will be removed. Structural adjustment policies may affect the older workers in some sectors more adversely, specially those in household or small scale industry. Measures will be taken to protect their interests.

II. Healthcare

Revise Article 7 as follows ;
7. Healthcare needs of senior citizens will be given high priority. Old age will be classified as a disability. The goal would be good, affordable health service, heavily subsidized for the poor and a graded system of user charges for others. It would have a judicious mix of public health services, health insurance, health services provided by not-for-profit organizations including trusts and charities, and private medical care. While the first of these will need to be promoted by the State, the third category given some assistance, concessions and relief and the fourth encouraged and subjected to some degree of regulation, preferably by an association of providers of private care.
Problems of accessibility and use of health services by the elderly arise due to distance, absence of escort and transportation. Difficulties in reaching a health care facility will be addressed effectively. By empanelling more hospitals & Diagonestic laboratories under Govt. Health schemes like RELHS,CGHS ,ECHS etc .For persons other than retirees from Govt/PSU/Industrial workers .
Difficulties in reaching a public health care facility will also be addressed through mobile health service,Special Camps.Ambulance services by Charitable institutions & not for profit organizations. Hospitals will be encouraged to have separate welfare fund which will receive donations &grants for providing free treatment and medicines to poor elderly patients

Add the Following :

23.The honourable Supreme court in the case of CONSUMER EDUCATION & RESEARCH CENTRE AND OTHERS  Vs. UNION OF INDIA & OTHERS
DATE OF JUDGMENT27/01/1995 CITATION:  1995 AIR  922 ,  1995 SCC  (3)  42 ,  JT 1995 (1)   636,        1995 SCALE  (1)35
The said judgment will be implemented in the letter & spirit by covering all past employees under Govt. Health Schemes like CGHS,RELHS,ECHS,ESI & Govt.  sponsored Health Insurance etc.

 Er.S C Maheshwari
Former DEN C.Rly.
Secretary (Railway)
Bharat Pensioners Samaj (Member SCOVA)
Genl. Secy. RREWA
490A/16 Gurudwara Road;Civil Lines .Gurgaon-122001
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