MEMORANDUM ON PENSION AND OTHER RETIREMENT

BENEFITS
CHAPTER I
Introduction
The Government of India, Ministry of Finance, Department of Expenditure,
Resolution No.!!"#$%EIII&'( dated ")
th
Fe*ruary, "#+ in its ,ara "&f( has
included the follo-in. terms of reference of the /
th
0entral ,ay 0ommission1
(f) To e!"ine t#e $rinci$%e& '#ic# &#ou%d (o)ern t#e &tructure of Pen&ion
!nd ot#er retire"ent *enefit&+ inc%udin( re)i&ion of $en&ion in t#e c!&e of
e"$%o,ee& '#o 'ere retired $rior to t#e d!te of t#e&e reco""end!tion&+
-ee$in( in )ie' t#!t t#e retire"ent *enefit& of !%% Centr!% .o)ern"ent
e"$%o,ee& !$$ointed on !nd !fter /01/012//3 !re co)ered *, t#e Ne' Pen&ion
Sc#e"e (NPS)14
." The principles that should .overn the structure of pension etc have to *e
evolved ta2in. into account the relevant constitutional provisions as -ell as 3udicial
pronouncements *y the 4upreme 0ourt of India in this re.ard.
.$ Artic%e 566(07) of the 0onstitution of the 0ountry defines pension as under1
Pen&ion8 Pen&ion "e!n& ! $en&ion '#et#er contri*utor, or not+ of !n,
-ind '#!t&oe)er $!,!*%e to or in re&$ect of !n, $er&on !nd inc%ude& retired
$!, &o $!,!*%e9 ! (r!tuit, &o $!,!*%e !nd !n, &u" or &u"& &o $!,!*%e *, '!,
of t#e return+ 'it# or 'it#out intere&t t#ereon or !n, ot#er !ddition t#ereto+ of
&u*&cri$tion to ! Pro)ident Fund14
From this what is to be inferred is that the gratuity as well as commutation are
also part of the pension as a whole. These are also to be treated as pensionery
benefits.
.+ The I: CPC -ent into the conceptual question of pension in detail. 4ome of
the o*servations contained in their report are relevant in understandin. the purport in
the *ac2.round in -hich the 0entral Government employees are placed today.
5 P!r! 21051 P!rt II1 6ut the concept of 7pension8 ho-ever old in its ori.in, had
the latent and real desire to provide for an eventuality 9 2no-n and un2no-n. The
2no-n eventuality -as old a.e and pro*a*le reduction in earnin. po-er, -hile the
un2no-n eventuality -as disa*ility *y disease or accident or death. Its real purpose
-as security, even thou.h the *e.innin. -as o*li:ue, indiscerni*le and faint. 6ut the
.erm of an effort to provide security ran throu.h the provision and it is natural that it
should have .ro-n and flo-ered -ith the development of human understandin. and
desire to loo2 after and provide for those -ho deserved it for man has constantly
*een see2in. means *y -hich to enhance his economic security. 6ut the extension
of the pension provision from military service to civilian pu*lic employment, resulted
lar.ely from consideration for the employees and the pressure of their or.anisations.
4ome *enevolent employer .oes to the extent of re.ardin. pensions as an
a*solutely indispensa*le complement of -a.es 9 a terminal *enefit. That ho-ever, is
apart from another aspect *earin. on pension 9 the social aspect. The demo.raphic
structure of the population is chan.in. *ecause of the .reater expectation of life.
Thus, those -ho are no- in middle a.e are .oin. to *e nearly t-ice as *i. as
economic *urden to their children as their parents are to them. The pro*lem in such
cases, has *een tac2led as a social o*li.ation, includin. social insurance for citi;ens
.enerally.<
5P!r! 21078 In the very nature of thin.s, every employee, -ho lives lon. enou.h,
reaches a sta.e of diminished outturn of -or2 or -hat may .enerally *e called non%
productive years. That may, spea2in. .enerally a.ain, *e set to *e the responsi*ility
of his employer for -hom he has spent the *est years of his life. In a -elfare state
that may also *e set to *e the responsi*ility of the Government &-here he is not in
his employment( and, in more modern society, it may also *e set to *e the
responsi*ility of the individual. 4o all three namely, the employer, the Government
and the employee or one or the other of them, may *e expected to contri*ute
to-ards the pension accordin. to the social or administrative set up of the country or
society -here the individual underta2es the service *ut the one common feature and
o*3ect of pension is to provide for the old a.e of the employee for the simple reason
that time has eroded his capacity to earn and he is una*le to provide for himself. In a
country li2e ours, -here -e have solemnly resolved to constitute it into a 54ocialist<
Repu*lic and to secure to us all social and economic 3ustice &,ream*le(, it *ehoves
the Government to ta2e care of its employees *y providin. terminal *enefit li2e
retirement pension -hen they *ecome entitled to them. =e may refer to the directive
principle of the 4tate ,olicy enshrined in 'rticle $> &a( of the 0onstitution that the
4tate shall in particular direct its policy to-ards securin. that the citi;ens have the
ri.ht to an 5ade:uate means of livelihood< ?.. If+ &uc# ! citi;en i& !n e"$%o,ee of
t#e St!te+ i& it out of ordin!r,+ !nd not !& of ! Con&titution!% directi)e+ t#!t t#e
St!te &#ou%d !$$reci!te it& dut, to $ro)ide for #i" *, "e!n& of ! $en&ion
!nd<or ot#er ter"in!% *enefit&= &emphasis added( ?. The concept of pension,
therefore carries -ithin it the .erm of certainty, periodicity, and 5ade:uacy<. ??.
@urs is a 4ocialist 4tate and the fundamental aim of 4ocial security is to .ive
individuals and families the confidence that their level of livin. and :uality of life -ill
not, in so far as, *e .reatly eroded *y any social or economic eventuality, includin.
the a.e of superannuation or oncomin. disa*ility<
.A The concept of pension has *een explained more precisely in the
Enc,c%o$!edi! of 4ocial 4ciences, :o%100 as under1
5administrators and civic leaders interested in the improvement of
Government services formulated the idea of pension as an efficiency device
necessary for the orderly and humane elimination of superannuated and disa*led
employees no lon.er a*le to function efficiently for the proper operation of the
system of promotions, for the attraction of *etter type of employees and for the
improvement of -or2in. morale<
.B @n the doctrinal approach the Encyclopaedia further states that1
5 ' doctrine recently advanced and more far reachin. in its implications re.ard
the ,u*lic 4ervice as the lo.ical pioneer in the meetin. of the old a.e pro*lem as it
affects -a.e earner in modern society. This doctrine considers a pension as a
compensation paid to the employee for the .radual destruction of his -a.e earnin.
capacity in the course of his -or2. Retirement *ein. a proper char.e a.ainst the
employees, entire period of active service, the employer should ma2e contri*ution
to-ards the employees eventual retirement durin. each year of service of the
employee, in a manner similar to that in -hich he annually sets aside a reserve
a.ainst depreciation and o*solescence of his plant and machinery. ,ensions,
accordin. to this doctrine, are an a*solutely indi&$en&!*%e co"$%i"ent of '!(e&.<
./ In para "."# the IC ,ay 0ommission has o*served1
5*ut even thou.h the Government service pension scheme in our country is
non%contri*utory, it has *een contended a.ain *y -ay of doctrinal approach, that this
is not really so and that some allo-ance is made for the missin. contri*ution -hile
determinin. the salaries<
.) The 4upreme 0ourt in their Dandmar2 Eud.ment &-hich has *een approvin.ly
:uoted *y the A
th
0,0 in D1S1N!-!r! !nd ot#er& :& Union of Indi! (AIR 0>?5 SC
05/) held that ,ension is neither a *ounty nor a matter of .race dependin. upon the
s-eet -ill of the employer. It is not an ex%.ratia payment *ut payment for past
services rendered. It is a social -elfare measure renderin. socio economic 3ustice to
those -ho in the hey%days of their life ceaselessly toiled for their employer on an
assurance that in their old a.e they -ould not *e left in lurch. The A
th
0,0 payin.
due respect to the a*ove o*servation of the Fonoura*le 'pex 0ourt in ,ara "/.B of
its report has stated that the $en&ion i& t#e &t!tutor,+ in!%ien!*%e+ %e(!%%,
enforce!*%e ri(#t of employees -hich has *een earned *y the s-eat of their *ro-.
's such the pension should *e fixed, revised, modified and chan.ed in -ays not
entirely dissimilar to the salaries .ranted to servin. employees.
.> =hile examinin. the .oals that a pension scheme should see2 to su*%serve,
the Fonoura*le 'pex 0ourt held that 5a pension scheme consistent -ith availa*le
resources must provide that the pensioner -ould *e a*le to live1
(i) free from want, with decency, independence and self respect, and
(ii) at a standard equivalent at the pre retirement level
The Court observed that we owe it to the ensioners that they live, not merely
e!ist.
.# From the a*ove o*servation of the 4upreme 0ourt it is clear that pension is
paya*le *y the employer i.e., the 0entral Government to its retired employees -hich
is their statutory and le.ally enforcea*le ri.ht from -hich they cannot *e deprived.
That the amount of pension must *e enou.h to ena*le a pensioner to live free from
-ant -ith decency, independence, and self%respect and at a standard e:uivalent at
the pre%retirement level.
. Geepin. the a*ove o*servations and principles and 3udicial pronouncements
in vie-, -e su*mit *elo- our su..estions for restructurin. the existin. pensionery
scheme in appropriate chapters. =e have made our su*missions only in respect of
issues -here -e -ant 0ommission to consider improvements in the existin.
provisions.
CHAPTER II
Ne' Pen&ion Sc#e"e (NPS)
". The contri*utory pension system *rou.ht in *y the G@I throu.h their
notification dated ""."."##$, no- renamed as National ,ension 4ystem under
,FRD' 'ct, has *een imposed on Government employees -ho entered service on
or after .."##+.
"." This is an ille.al act in as much as the 4upreme 0ourt of India had held
,ension as an enforcea*le inaliena*le fundamental ri.ht. Therefore it should *e
scrapped or at least not made applica*le to Government employees. This has also
divided the 0G employees into t-o cate.ories and therefore it is discriminatory in
respect of persons -ho have entered service on or after .."##+ -ho had *een
denied the statutory pension. 'ny discriminatory scheme is ille.al and ultravires of
'rticle + of the 0onstitution. @n this count also the N,4 cannot *e made applica*le
to the Government employees.
".$ The 0entre for Economic 4tudies and ,olicy, Institute for 4ocial H Economic
0han.e, 6an.alore in a Study of Terminal Benefits of the Central Government
Employees sponsored *y the CI 0,0 had also o*served that 0ivil 4ervices ,ension
is in the nature of a deferred -a.e. It is -ell 2no-n that the principle .uidin. the pay
pac2a.e of civil servants is one of intentionally spreadin. out the compensation over
a lon. period of time, there*y the -a.es paid out durin. the course of the -or2
tenure is 2ept lo- *y desi.n, and the pension payments made durin. the retirement
phase compensate for the lo- -or2in. -a.es.
".+ The a*ove mentioned study under the headin. 5'r.uments a.ainst pension
reforms< states as follo-s1
Deferred @!(e8 In the context of civil servant pension payments, it is
ar.ued that, the principle .uidin. the fixation of pay pac2a.e is one of intentionally
spreadin. out the compensation over a lon. period of time, -here *y the -a.es paid
out durin. the course of -or2 tenure is 2ept lo- *y desi.n, and the pension
payments made durin. the retirement phase compensate for the lo- -or2in. -a.es.
The 4upreme 0ourt of India held that pension is neither a *ounty nor a matter of
.race dependin. upon the s-eet -ill of the employer. It is not an ex%.ratia payment,
*ut a payment for past services rendered. It is a social -elfare measure, renderin.
socio%economic 3ustice to those -ho in the heyday of their life ceaselessly toiled for
the employer on an assurance that in their old a.e, they -ould not *e left in the
lurch.<
5Darry =illiams o*serves 5'ctually, civil service pensions, *ecause they are
not *ased on contri*utions, are *est descri*ed as deferred -a.es. 0ivil servants
accept a lo-er current -a.e in exchan.e for the promise of a pension in their old
a.e. If this pension -ere contri*utory, they -ould insist on a hi.her -a.e and
.overnment -ould have to either increase taxes or *orro- &issue de*t( to pay it. The
real cost of civil servants is thus much hi.her than recorded under the current
system of cash accountin.. ' .ood reform -ould *e to move to a system of accrual
accountin. settin. up at least a notional fund to pay these deferred -a.es< &Darry
=ilmore, "##+(<
5,u*lic and private sector pay differentials1 ' comparison of the pu*lic and private
sector -a.es reveals that -hile the pu*lic sector -a.es for the lo-er .rades
compares -ell -ith that of the private sector, the salaries of the employees
*elon.in. to the hi.her .rades are hi.hly unfavoura*le to the pu*lic sector
employees. The post%retirement *enefits that the .overnment employees are entitled
to act as some incentive to retain them in .overnment sector.<
".A The a*ove study had pointed out that expenditure on pensions of civil
servants of hi.h income @E0D countries on an avera.e is "I of GD, &less than I
in Ireland and more than $.AI in 'ustriaJ(&J 4ource1 @E0D 4ocial Expenditure
Data*ase(. 6ut in the ) 4outh 'sian countries it is less than I of GD, &4ource1
=orld 6an2 Data *ase(. Fo-ever, in India *et-een >B+%BA and "##+%#A on an
avera.e pension payments &0ivil 4ervice pension paid *y 0entral Government( have
constituted #.AI share of GD,. The ,ension lia*ility -ould continue to increase
and reach #.A+I level *y "#>%"# and remain at that level till "#+%"A after -hich
they -ould decline as a percenta.e of GD, accordin. the the same study conducted
*y Dr.Gayatri at the instance of CI 0,0. These fi.ures ar.ue themselves in favour of
continuation of the Defined 6enefit ,ension 4cheme for all 0entral Government
employees instead of thro-in. a section of them to mar2et *ased N,4.
".A The a*ove study had su*mitted the follo-in. estimated pensionery out.o
-hich tends to increase durin. the period from "#+%"#$). It is only after "#+$ that it
starts declinin. and -ill *e reduced to ;ero only in "#)). The ta*le is .iven *elo-1
T!*%e &#o'in( e&ti"!ted $en&ioner, out(o
Ae!r E"$%o,ee
Pen&ion
P!,out (in R&
Crore&)
F!"i%, Pen&ion
P!, out (in
R&1Crore&)
Tot!% $en&ion
$!,out (in
R&1Crore&)
"##+ $##.B> ">)$.$) +")+.#/
"##) $A$".)+ $A/".B) /#A.A"
"#$ BA+>.#/ +$B).>+ "#>).#"
"#) ")B".A+ A//./> "/B$+.$$
"#"$ "//"$.B) /$>. $A#+".)#
"#") $+#/B."/ )>>B.$ +$#/".+
"#$$ $>$".B) #$).# +>/#".B>
"#$) +AB+.A# >"$.+ A/#)/.>#
"#+$ +/+/."$ #".$# A"/B).A$
"#+) $A#.>" >"+$.) ++"AA.#
"#A$ "A+#A.++ B/#/.#/ $"".A
"#A) B$#$.A +$#+.#/ "#B#/.""
"#B$ )/>.A "A>.$> #)$).>#
"#B) $A>.)) )$+.> $>>+.#/
"#/$ )##.B) ".$+ #".#"
"#/) #."B ">./ $>.+$
"#)$ $.A" #.>/ +.+>
"#)) #.## #.## #.##
".B From the a*ove pro3ection it is very clear that the *enefit of N,4 -ill
commence only after ++ years i.e. in "#++. 'nd durin. the period it -ill increase
exponentially as *ecause in addition to the 4tatutory pension lia*ility the
Government -ill *e contri*utin. to the N,4 also K #I of annual salary *ill of the
0G Employees -ho have entered service on or after .."##+.
"./ The final conclusion of this study team has *een as under1
5Mainly .iven the fact that the future lia*ility althou.h may *e lar.e in
terms of the a*solute si;e is not li2ely to last very lon. and does not
constitute an alarmin.ly *i. share of the GD, -hich is also on the decline,
it appears that pursuin. the existin. ,ay 's you Go to meet the lia*ility
-ould *e an ideal solution.<
".) 'pplyin. this conclusion -e may su..est that the N,4 may not *e made
applica*le to the Government employees and all those -ho had *een covered under
N,4 may *e reverted *ac2 to statutory pension scheme. The Government may *e
as2ed to study the experiences of this scheme in several other countries in the
-orld. In 0hile such a scheme has *een reversed as *ecause the return -hich the
lo- paid employees .ot out of the annuity purchased -as not as .ood as A#I of
D,D *ut as lo- as "#I of D,D. The LG Government had to pay out of the
exche:uer lar.e amount *y -ay of su*ventions in order to ensure that that annuities
purchased yield A#I of D,D as pension. It is -ell 2no-n that in L4' -here there
-ere similar pension schemes dependent upon the mar2et had collapsed durin. the
financial melt do-n from "##) on-ards. It is estimated that more than $.A trillion M
-orth of pension -ealth -as lost. The -or2ers not only lost their pension *ut also
their 3o*s. @ur respectful su*mission is that ta2in. into account the demo.raphic
considerations the India -hich is a country of youn. do not need any such mar2et
oriented pension scheme, particularly -hen the international experience is that such
schemes had failed and our country can afford to pay pension to civil servants -hich
stands at level of I of the GD,.
C#!$ter III
Pen&ion Entit%e"ent
A1 E"o%u"ent& for Pen&ion8
$. The entire income in form of *asic pay, special pay or personal pay if any,
deputation duty allo-ance etc are the elements of pay proper and therefore confinin.
the emoluments to the *asic pay as recommended *y the IC and C 0,0s is to *e
undone. The Dearness 'llo-ance is meant to restore the purchasin. po-er of pay is
only an addition to pay. In many countries there is no system of D'. ,eriodically the
,ay is revised ! indexed ta2in. into account the rise in cost of livin.. Fere also there
is a system of mer.in. the D' as D, for purposes of pensionery *enefits. In respect
of .ratuity already the D' is *ein. included -ith ,ay and therefore there is no reason
for excludin. the D' from the emoluments. =e therefore su..est that the
emoluments for the calculation of pension should include1
(a) "asic ay
(b) #ny $pecial pay or personal pay, or deputation duty allowance.
(c) %earness #llowance
(d) &on'practicing allowance in respect of %octors
(e) ()* of the running allowance in respect of +ailway +unning $taff
retired after ,.-..-/00.
B1 A)er!(e e"o%u"ent&8
$." The CI 0,0 has already recommended that the ten monthly avera.e
emoluments or the last pay dra-n, -hichever is more *eneficial, should *e the *asis
of computation of pension. =e have therefore no further su..estion to place *efore
the 0ommission on this issue.
C1 Bu!%if,in( &er)ice for $en&ion8
$.$ The CI 0,0 has done a-ay -ith the re:uirement of $$ years of :ualifyin.
service for full pension. They have said that full pension may *e .ranted to those
-ho have the :ualifyin. service of "# years. Therefore -e have no further
su..estion to place *efore the 0ommission on this issue.
D1 R!te of Pen&ion8
$.+ =e should 2eep in mind the o*servation of the 'pex 0ourt that the pension
scheme must provide so much that the pensioner should *e a*le to live1
(i) Free from want, with decency, independence and self'respect,
and
(ii) #t a standard equivalent at the pre'retirement level.
(The Court had further observed that we owe it to the pensioners that
they live1 not merely e!ist.)
$.A Therefore ta2in. into account that on superannuation an employee is left -ith
a Ct'o unit f!"i%,D .enerally and therefore if he is to *e ena*led to maintain a
standard equivalent to the pre'retirement level, the rate of pension should *e 67% of
the last pay drawn. =e therefore su..est that full pension should *e at the rate of
B/I of D,D or # months avera.e emoluments, -hichever is more *eneficial.
$.B It is pertinent to point out that several countries in the -orld pay hi.her rate of
pension to their civilian pensioners. France is payin. /AI of last six months avera.e
emoluments as pensionN 6el.ium is payin. /AI of last five years avera.e as
pensionN 0yprus is payin. B/I of final salary as pensionN Malta is payin. )#I of
avera.e of *est A years -a.es as pensionN @ur nei.h*our 4rilan2a -hich is also in
the lo-er middle income .roup of countries li2e India in 4outh 'sia, is havin. a
scheme called 5,u*lic 4ervants ,ension 4cheme &Defined 6enefit 4cheme(
esta*lished in >#, as a mandatory scheme financed *y the Government *ud.et is
payin. )AI to >#I &for $# years of service( of last one y ear annual salary at
retirement as pension &4ource1 4rilan2a ,ension Department 0ircular No.$!"##+
dated B.#."##+(N The life expectancy in 4rilan2a at B# is "#."I -hich is $.AI
hi.her than India.
$./ In ,a2istan -hich is another nei.h*our and remains in the same lo-er middle
income .roup of countries is calculatin. pension on the follo-in. formula1
5Num*er of years of service O Dast 6asic ,ay O / and divided *y $##. If an
employee has served $A years of service and received last *asic pay as Rs.#,###!%
then that employee shall .et a pension of ).B/!% &i.e., ).B/I(.
$.) In 6an.ladesh the retirement a.e is A/. The life expectancy at B# in
6an.ladesh is /.> -hich is same as in India. This country also remains in lo-er
middle income .roup of countries li2e India. 6ut 6an.ladesh pays )#I of last pay as
pension. In the -ar devastated country of 'f.hanistan,, pension is calculated on last
$B months avera.eN for each year it is "I and a maximum of )#I is .iven as
pension in that country.
$.> From the a*ove comparison -ith some of the -orld countries of *oth
European as -ell as our o-n 4outh 'sian countries, it is clear that all those
countries are payin. *etter percenta.e of pension to their 0ivilian employees. India
appears to *e one of the less pension payin. country despite its ima.e of one of the
faster developin. economies in the -orld. =e therefore su..est that the *asic
pension to *e determined should *e B/I at least on the *asis of the last pay dra-n
or the # months avera.e emoluments, -hichever is more *eneficial to employee.
$.# It has already *een -ell reco.nised that as the a.e after superannuation
further advances, not only the pensioner *ecomes -ea2 in lim*s *ut also *ecomes
more suscepti*le to various .eriatric diseases. Fe -ill have to incur additional
expenses for his up2eep. There are also the social o*li.ations and increased
expenses on medical treatment etc.
E1 Addition!% Pen&ion
$. The Government of India has accepted and implemented the B
th
0,0
recommendation of a.e%related additional pension *eyond the a.e of )#. Fo-ever
the B
th
0,0 did not recommend any addition to the pension for a period of "# years
after superannuation at the a.e of B#. Their ar.ument -as that every pensioner .ets
increase in his ! her pension after A years -hen the commutated portion of his
pension is restored. This is not at all a valid .round. Even durin. these A years the
Dearness Relief is calculated on his .ross pension and not on his net pension after
commutation and he earns interest on commuted value of pension. Therefore there
is no increase in pension on account of restoration of commuted pension after A
years.
$." In our opinion this needs certain revision. 'ccordin. to 44@ survey &"##/%
#)( /.AI population only is a*ove the a.e of B#. Naturally this may reflect amon.
the pensioners also. Dife expectancy at B# is only /.> and at /# it is only .)
&4ource1 4ample Re.istration 4ystem @!o the Re.istrar General India(. This means
a Government servant is receivin. pension for ) to "" years. In the a.e .roup of B#
to />, in Rural areas AI and in Lr*an areas A.AI is confined to *ed. In the same
a.e .roup "".+I in Rural areas and "#."I in Lr*an areas is confined to home due
to physical immo*ility &4ource1 National 4ample 4urvey, B#
th
Round, "##+(. 'fter
retirement, their income from pension is nearly !$
rd
of their .ross salary at the time
of retirement. 6ut they have to spend more on medical care. This a.e%.roup
therefore also needs some relief *y -ay of additional pension. Incidentally
'f.hanistan -hich is one of the lo- income countries in 'sia, is havin. a retirement
a.e of BA -ith a formula of .rant of additional pension at the rate of $I for each year
after BA years of a.e and the maximum )#I additional pension is paid.
$.$ Therefore -e see2 the /
th
0,0 to consider addition to the pension after
.rantin. B/I of last pay dra-n &D,D( ! 'vera.e of emoluments as full pension on
superannuation at B# years of a.e as under, *ecause of prevailin. life expectancy of
Indian 0iti;en '.e is B>.B &assessed durin. the year "#%A( and the old pensioner
-ho is also considered to *e senior citi;en has to -ait for a period of t-enty years on
his retirement to .et an increase at his a.e of )# maintainin. his health from disease
*urden.
@n attainin.
'.e
Increased to the I of D,DJ ! 'vera.e @f # months
emoluments
BA Pears /#
/# Pears /A
/A Pears )#
)# Pears )A
)A Pears >#
># Pears ##
D,D Q Dast ,ay Dra-n
E1Mini"u" Pen&ion
$.+ Thou.h the concept of minimum pension and the method of computin. it have
not *een explained *y any of the pay commissions or the Government, it is clear that
the Minimum ,ension is A#I of the Minimum =a.e. The rationale *ehind the
percenta.e has no-here *een explained. 2e however thin3 that in order to ensure
that it is adequate, -44* of the minimum wage should be the 5inimum ension. The
very concept of Need 6ased Minimum =a.e is that this is a level of -a.e *elo-
-hich a -or2er8s family cannot su*sist ! survive and remain capa*le to perform. That
*ein. the concept of minimum -a.e, it should also apply in the case of Minimum
,ension on the premise that any pension lower than the 5inimum pay is insufficient
to enable a pensioner 6 family pensioner to live or survive.
F1 De!rne&& Co"$en&!tion
$.A =e have no su..estions for improvement of this issue except that ,ensioners
may *e paid the same dearness compensation vi;., at the same rate as it is *ein.
paid to the servin. employees. It should *e periodically mer.ed -ith the *asic
pension so that deficiency in the ##I neutrali;ation in the cost of livin. is partially
compensated.
.1 Mer(er of De!rne&& Re%ief 'it# B!&ic Pen&ion
$.B 's on #.#."#+, the Dearness Relief compensation stands at ##I. The
su..estion for mer.er of DR to partially compensate the erosion in the real pension
-as first su..ested *y the Gad.il 0ommittee in the post "
nd
0entral ,ay 0ommission
period. The $
rd
0,0 had recommended such mer.er -hen the cost of Divin. Index
crossed over "/" points i.e. /" points over and a*ove the *ase index adopted for the
pension revision. In other -ords, the recommendation of the $
rd
0,0 -as to mer.e
the Dearness Relief -hen it crossed $BI. The Government in the national council
E0M at the time of ne.otiation initially a.reed to mer.e B# I Dearness Relief and
later the -hole of the DR *efore the +
th
0,0 -as set up. The A
th
0,0 mer.ed >)I
of DR -ith pension.
$./ The methodolo.y adopted for compensatin. the erosion in the real value of
pension in the interre.num period had al-ays *een throu.h the mechanism of
mer.er of a portion of Dearness Relief. The A
th
0,0 had recommended that the
Dearness Relief must *e mer.ed -ith *asic pension as and -hen the percenta.e of
Dearness compensation exceeds A#I accordin.ly even *efore the settin. up the B
th
0,0 the Dearness Relief to the extent of A#I -as mer.ed -ith pension.
$.) It -as totally ironic to note that deviatin. from all other ,ay 0ommissions,
the B
th
0,0 had made a reversal and recommended that no Dearness 'llo-ance !
Dearness Relief should *e mer.ed -ith the 6asic ,ay of employees ! 6asic ,ension
of ,ensioners. The recommendation had dealt a severe *lo- *elo- the *elt as this
recommendation denied everyone from havin. any cushion a.ainst the erosion
caused in the real value of pension in *et-een t-o pay commissions. Fad the
recommendation of C 0,0 *een continued, there -ould have *een t-o automatic
mer.ers of Dearness Relief *y this time as C 0,0 recommended such a mer.er
automatically -henever the dearness relief index crosses A#I mar2.
$.> The 0entral Government also ta2in. undue advanta.e out of the
recommendations in the name of B
th
0,0, stiffly denyin. any such mer.er of D'!
DR. This issue re:uires course correction and -e su..est that the /
th
0,0 should
recommend for automatic mer.er of D' ! DR as and -hen the index crosses the
A#I mar2 and *efore settin. up another ,ay 0ommission entire D' should *e
mer.ed -ith pay as -as done *y the C%0,0.
CHAPTER I:
P!rit, Bet'een P!&t And Future Pen&ioner&
+. The Government have recently announced that 7One R!n- One Pen&ionD
shall *e implemented in respect of Ar"ed Force& so that the .larin. disparity
*et-een the persons of e:uivalent ran2 and status do not dra- vastly une:ual
pensions if they retire at different point of time is undone. 'lready there is a complete
parity in pension amon. the Eud.es of 4upreme 0ourt, Fi.h 0ourt and the
0omptroller and 'uditor General of India, irrespective of the date of their retirement.
+." In so far as the 0ivilian Employees are concerned the principle of parity in
pension *et-een the past and the future pensioners -as implemented *y the
Government as had *een recommended *y the : CPC. The C 0,0 recommended
that 5as a follo- up of our *asic o*3ective of parity -e -ould recommend that the
pension of all pre%>)B retirees may *e updated *y notional fixation of pay as on
..>)B *y adoptin. the same formula &Revised ,ay Rules( as far as the servin.
employees. This step -ould *rin. all the past pensioners to a common platform on to
the +
th
0,0 pay scales as on ..>)B. Thereafter, all pensioners -ho have *een
*rou.ht on the +
th
0,0 pay scales *y notional fixation of pay and those -ho have
retired on or after ..>)B can *e treated ali2e in re.ard to consolidation of their
pension as on ..>>B *y allo-in. the same fitment -ei.hta.e as may *e allo-ed
to the servin. employees<. They further recommended that 5the consolidated
pension shall not *e less than A#I of the minimum pay of the post as revised *y the
0,0 held *y the pensioner at the time of retirement<. The C 0,0 further said that
5this attainment of reasona*le parity needs to *e continued so as to achieve
complete parity over a period of time<. Fo-ever the CI 0,0 totally i.nored these
recommendations of the C 0,0 and has reintroduced *y not adoptin. the same
formula for post >>B retirees, and *y not recommendin. the same fitment *enefit
and other recommendations li*eralisin. the pension rules in respect of pre%"##B
retirees. Thus a hu.e disparity *et-een pre%"##B and post%"##B retirees has *een
created *y the CI 0,0.
+.$ The CI 0,0 had ho-ever recommended a modified parity *et-een them
-hich has also actually *een slashed do-n *y the Government interpretin. it as the
P!, B!nd instead of 7P!, in t#e P!, B!ndD. Fonoura*le 0ourts have ho-ever
directed the Government that the formula of "odified $!rit, may *e implemented
as recommended *y the B
th
0,0 and -as accepted *y the Government initially.
+.+ =e therefore ur.e that pay of every pre%"#+ retiree should *e notionally re%
determined &correspondin. to the post from -hich he or she retired and not
correspondin. to the scale from -hich he or she retired( as if he or she is not retired
and then the pension *e computed under the revised li*eralised rules -hich are to
*e applica*le to the post%"#+ retirees.
CHAPTER :
F!"i%, Pen&ion
A1 F!"i%, Pen&ion
A. 't present the family pension is .iven at the rate of $#I of ,ay last dra-n.
Fo-ever, family pension shall *e e:ual to A#I &B/I as proposed *y us( of pay last
dra-n or t-ice the rates .iven a*ove, -hichever is less and the amount so
admissi*le shall *e paya*le from the date follo-in. the date of death of the
Government 4ervant for period of / years or for a period up to the date on -hich the
deceased Government 4ervant -ould have attained the a.e of B/ years had he
survived ! # years in case of death in harness. The family pension is not less than
Minimum ,ension.
A." The a*ove Rule is applica*le to a Government 4ervant -ho is not .overned
*y =or2man 0ompensation 'ct, >"$, if he dies -hile in service, after havin.
rendered not less than / years of continuous service.
A.$ The prescri*ed period for -hich the family pension is paya*le is as under1
&i( In the case of a -ido- or -ido-er, up to the date of death or
remarria.e
-hichever is earlier.
&ii( In the case of a 4on until he attains the a.e of "A years.
&iii( The unmarried ! -ido-ed ! divorced dau.hter.
&iii( The disa*led mentally retarded child of the Government
4ervant.
A.+ =e su..est as under1
&a( The period of / years may *e raised to # years ! A years in case of
death in harness. The period of / years is inade:uate for sta*ilisation of a family
after the death of a Government 4ervant.
&*( The :uantum of family pension for the period of # years should *e
e:ual to the pension of the Government 4ervant -as entitled as per Rules.
&c( 'fter the expiry of the a*ove # years period, the family pension may
*e reduced to /AI of full pension or A#I of last pay dra-n -hichever is hi.her.
&d( In case of a 4on, the family pension may *e allo-ed up to the a.e of
") years. This is su..ested *ecause the recruitment a.e has *een raised in certain
cases to ") years.
&e( The concession extended to a disa*led mentally retarded child to
receive family pension until his ! her death is su*3ect to the condition that the said
disa*ility should have manifested *efore the death of Government employee. =e
su..est that this condition may *e removed.
A.A ' Government 4ervant retired on medical invalidation after renderin. less
than # years of service & A years as per our proposal( .ets no pension. =e su..est
that he should *e .ranted full notional pension &i.e., B/I of his emoluments !
Minimum pension, -hichever is hi.her. @n death of such a Government 4ervant his
family should .et1
&a( Full notional pension ! Minimum pension durin. first # years after his
death.
&*( /AI of the a*ove or Minimum pension, -hichever is hi.her, thereafter.
6. Addition!% Pen&ion8
A.B In the case of family pensioners also ta2in. into account their solitude and
ina*ility to earn and the ever risin. cost of livin. etc -e re:uest for the enhancement
of the family pension at the follo-in. rates1
On attaining age of Increase in %
of family
pension
65 years 20
70 years 40
75 years 60
80 years 80
85 years 90
90 years 100
C1 Etr! Ordin!r, Pen&ion
A./ The A
th
0,0 in ,ara $A./ of its Report has recommended that re.ulation of
compensation or disa*ilities cate.ori;ed under &*( and &c( follo-s1
5II 9 0ases of disa*ility &##I( resultin. in dischar.e from service<
5Normal pension and .ratuity admissi*le under 004 &,ension( Rules, >/",
-ithout insistin. on the re:uirement of minimum service of ten years plus Disa*ility
,ension e:ual to the normal Family ,ension, i.e., $#I &as per our proposal A#I( of
the *asic pay<.
A.) The Department of ,ension H ,ensioners =elfare, -hile issuin. orders on
acceptance of the recommendation vide @M No.+A!""!>/%,H,=&0( dated $."."###
&incorporated in 'ppendix%$ of 4-amy8s ,ension 0ompilation( the -ell%meanin.
recommendation has *een altered as follo-s1
5III 9 Disa*ility ,ension 9 for cases covered under cate.ories 768 and 708.
A.> Extra @rdinary Family ,ension1
5&( Normal pension and .ratuity admissi*le under the 004 &,ension( Rules,
>/" plus 9 Disa*ility ,ension e:ual to $#I of *asic pay for ##I disa*ility.<
This has resulted in a Group 7D8 employee -ith B years8 service, -ho has *een
invalidated &-ith +AI disa*ility( and *oarded out of service not .ettin. the minimum
pension to-ards 74ervice element8. This in3ustice is re:uired to *e set ri.ht.
CHAPTER :I
.r!tuit, And Co""ut!tion Of Pen&ion
A1 .r!tuit,
B. Retirement Gratuity is paid at R of *asic pay for each completed
six monthly period of :ualifyin. service su*3ect to a maximum of B.A times of the
emoluments. There is also a monetary ceilin. of # la2hs. This is applica*le to all
Government 4ervants -ho retire on completion of A years of service. Fo-ever, if
a person dies in harness his family is .ranted the .ratuity at certain prescri*ed
rates1
B." =e su..est that the .ratuity may *e calculated on the *asis of "A
effective days as a.ainst $# days in a month. =e ma2e this su..estion *ecause
the Government 4ervant should not *e paid at a rate lesser than -hat is
admissi*le under the Gratuity 'ct.
B.$ The ceilin. of B.A times should also *e removed. This is *ecause
under existin. rules .ratuity is reduced in the case of a Government 4ervant -ho
has put in less than $$ years of service. In the *an2in. industry there is no such
ceilin. of B.A months8 salary *ut the retirin. *an2 employees are .ettin. at the
rate of S a month salary for every year of service even over and a*ove $$ years
of service. Therefore, it is *ut lo.ical that for a service span exceedin. $$ years,
the .ratuity should *e hi.her and the a*ove ceilin. *e -ithdra-n.
B1 Co""ut!tion of Pen&ion !nd it& Re&tor!tion
B.+ 0entral Government employees are permitted to commute up to
+#I of their *asic pension. =e have no su..estion to ma2e in this re.ard.
B.A In the li.ht of 4upreme 0ourt decision, commuted value of pension is
restored on completion of A years or on reachin. /A years of a.e -hichever is
later. Most of the 4tate Governments are restorin. full pension after " years or
on reachin. /# years of a.e. =e, therefore, propose that full pension *e restored
after " years, or on reachin. the a.e of /" years, -hichever is earlier. From the
old ta*le .iven *elo- it -ill *e seen that the entire commuted value .ets repaid to
the Government *y the ,ensioners -ithin " years.
4l.No Details '.e next *irth day Q B
years
0ommutation factor >.)
" 'mount commuted Rs. ##
$ 0ommuted value received Rs.,//"
+ 'mount recovered in " years Rs.+,+##
A 'mount recovered in A years Rs.),###
B Excess recovered in " years Rs. ",B")
/ Excess recovered in A years Rs. B,"")
B.B No- -hen the commutation factor has *een reduced and is applica*le after
"##), the restoration of commuted pension should *e after # years. It -ill *e seen
that entire commuted value .ets repaid -ithin # years as could *e clear from the
ta*le .iven *elo-.
4l.No Details '.e next *irth day Q B
years
0ommutation factor ).>+
" 'mount commuted Rs.##
$ 0ommuted value received Rs.>,)$$
+ 'mount recovered in " years Rs.",###
A 'mount recovered in A years Rs.),###
B Excess recovered in " years Rs.",B/
/ Excess recovered in A years Rs.),B/
B./ Ta2in. all these factors -e su..est that the commuted pension may *e
restored on completion of # years or reachin. the a.e of /# years, -hichever is
earlier.
CHAPTER :II
Medic!re
/. The follo-in. landmar2 3ud.ments of the 4upreme 0ourt of India have held
that the en3oyment of hi.hest attaina*le standard of health is reco.ni;ed as a
fundamental ri.ht of all -or2ers ! pensioners in terms of 'rticle " read -ith 'rticle
$>, +, +$ and +) of the 0onstitution1
&i( 0onsumer education and Research 0entral and others Cs Lnion of India
&'IR >>A 4upreme 0ourt >""(
&ii( Daxman Thammappa Gotha.iri Cs General Mana.er 0entral Rail-ay H
@thers T"##A&( 40'DE(
&iii( Indian Medical 0ouncil Cs C.,.4hantha H @thers &>>A&B( 400BA(
Therefore improvements in the existin. Medicare systems are a*solutely essential.

/." Nur&in( Ho"e& < A%% Indi! Pri)!te Ho&$it!%& < Di!(no&tic Centre& to cater
for the 0GF4 *eneficiaries should *e increased in such a -ay that they -ill *e
nearer to the residence cluster of the *eneficiaries. =hile selectin. .reat care should
*e ta2en that no *eneficiary is re:uired to travel more than ".A GMs to o*tain
treatment. In Delhi, the recent approval for hospitals has *een done -ithout 2eepin.
the extent of *eneficiaries residence localities. 4ome areas have *een completely
for.otten and some points have *een .iven more than one referrals. This appears
-ell on paper and satisfies the Ministry *ut in practical terms it is more a punishment
for the *eneficiaries.
/.$ C.HS8 =e -ish to invite attention of /
th
0,0 to the recommendation made *y
the C 0,0 as detailed in ,ara +#. of their report re.ardin. extension of 0GF4.
Lnfortunately, the -ell intentioned recommendation has remained still as
recommendation only. Lnder some plea or the other, there had *een practically no
expansion -hatsoever in this re.ard, -hich is re.retta*le. ' num*er of proposals
had *een for-arded to the .overnment *y the 'll India 0entral 0onfederation of
,ensioners 'ssociations, Delhi and others *ut have *een 2ept in cold stora.e. The
/
th
0,0 is re:uested to reiterate this important recommendation, su..estin. openin.
openin. of ne- 0GF4 dispensaries as per prescri*ed norms securin. clearance
from ,lannin. 0ommission, -herever necessary.
71E Di&cri"in!tion to PFT Pen&ioner&8 The 0entral Government
,ensioners, -hether they -ere *eneficiaries or not -hile in service, are permitted to
3oin 0GF4 on retirement. Fo-ever the Ministry of Fealth H F= had issued an order
dated .).>>B accordin. to -hich all ,HT ,ensioners -ho -ere not participatin. in
0GF4 -hile in service have *een de*arred. This in itself is a very .rave
discrimination, -hich is not permissi*le under 'rticle + of the 0onstitution. This -as
therefore -as challen.ed in 0ourts and the latest position achieved is that the 0ourts
have held that the ,HT ,ensioners may *e permitted to participate in 0GF4 or
alternatively covered under 04M' Rules, >++.
/.B PFT Di&$en&!rie&8 In the meantime, follo-in. the recommendations of the C
0,0 and CI 0,0, > ,HT Dispensaries in " 0GF4 0ities have *een mer.ed
-ith the 0GF4. Instead of no- allo-in. all ,HT pensioners irrespective of the
station they live, only those -ho are livin. in these " 0ities have *een allo-ed to
participate in the 0GF4. This is also discriminative *ecause all other 0entral
,ensioners are permitted to 3oin 0GF4 irrespective of the fact -here they are
livin.. It is therefore ur.ed that the /
th
0,0 should recommend that the a*ove
discrimination is put an end to and all ,HT ,ensioners may *e allo-ed to
participate in 0GF4.
/./ S"!rt C!rd& to Pen&ioner&8 4mart 0ards may *e issued to all ,ensioners
from all Department &includin. ,ostal ,ensioners( and their dependents for
cashless and hassle less medical facilities across the country in all Government
hospitalsN all N'6F accredited Multi 4uper 4peciality Fospitals -hich have *een
allotted land at concessional rates or .iven any other aid or concession *y any
GovernmentN all 0GF4, REDF4 and E0F4 empanelled Fospitals.
/.) Ho&$it!% Re(u%!tor, Aut#orit,8 =e su..est that a Fospital Re.ulatory
'uthority shall *e set up to ensure that the hospitals provide reasona*le care to
4mart 0ard holders. This 'uthority can underta2e periodical revision of 0GF4
approved rates for several 2inds of medical treatment as -ell as for la* tests in
consonance -ith the prevailin. mar2et conditions so that no crisis develops li2e
refusal of treatment *y empanelled hospitals.
/.> Fied Medic!% A%%o'!nce8 The Government fixed the rate of FM' as $##!%
per month to the ,ensioners not covered under 0GF4 etc. 4everal appeals for
revision of this amount in a realistic manner to suite the conditions prevailin. on
counts li2e Doctor8s fees, cost of medicines, rate of la* tests etc -ent in vain as
the Government stoutly refused to enhance this FM' in a reasona*le manner. It
can *e seen that the Employees ,rovident Fund @r.anisation under the 0entral
Government8s Ministry of Da*our -as payin. a monthly FM' to its employees at
the rate of "##!% prior to B
th
0,0 -hen the other 0entral Government employees
-ere dra-in. only ##!% per month. The same E,F @r.anisation came for-ard to
enhance the said FM' from "##!% to "###!% per month -.e.f.
st
March, "#$ for
the servin. employees, E,F pensioners and family pensioners. =hen an
or.anisation under the same 0entral Government has ta2en steps to suita*ly
enhance the Fixed Medical 'llo-ance in consonance -ith the mar2et conditions,
there is no 3ustification -hatsoever for the 0entral Government to adamantly
refuse to 2eep this FM' at a lo-est level of Rs.$##!% per month -hich everyone
2no-s is totally inade:uate to the medical needs of a pensioner8s family. =e
su..est that the /
th
0,0 recommend for refixation of FM' K "###!% per month
plus D' thereon. In addition this FM' shall *e permitted to those pensioners -ho
-ant to under.o only Lnani or 'yurveda or Fomeopathy type of treatments even
thou.h they live in areas covered *y 0GF4.
/.# CS (MA) Ru%e& 0>338 In the interre.num period of permittin. all pensioners
into the 0GF4 -ithout any discrimination, the 04M' Rules, >++ should *e
extended to pensioners livin. in non%0GF4 areas and stations, -hich are at
present not covered *y 0GF4. 's recommended *y C 0,0, vide ,ara +#.) of
their report, *enefit of 04 &M'( Rules, >++ should *e extended to pensioners in
non%0GF4 areas at least to the extent of full reim*ursement of expenses
incurred for hospitali;ation in a Government hospital or hospitals reco.ni;ed
under 04 &M'( Rules for the servin. employees or those hospitals reco.nised *y
4tate Governments for such purposes for their employees. To cite examples, in
the 0ity of Mysore, a num*er of hospitals have *een reco.ni;ed under 04 &M'(
Rules, >++ for servin. 0entral Government employees. 6ut ,ensioners cannot
avail the *enefit merely *ecause there is no 0GF4 dispensary there. 4imilarly, in
Ldupi thou.h the -or2%famous 5Gaastur*a Fospital< is reco.nised under 04
&M'( Rules, >++ for servin. employees, the ,ensioners do not .et the *enefit
merely *ecause there is also no 0GF4 dispensary availa*le.
/. 4everal cases of claims for reim*ursement of medical expenses incurred *y
pensioners lvin. in non%0GF4 areas have *een decided in favour of pensioners
*y the 0'Ts and even the Fi.h 0ourt of Gu3rat at 'hmeda*ad. /
th
0,0 is
therefore re:uested to ma2e suita*le recommendation in this re.ard in order that
even if 0GF4 dispensaries are not opened, for -hatever reasons they may *e,
the 0entral Government pensioners may avail medical in%patient facilities &in
hospitals reco.ni;ed under 04 &M'( Rules, >++ for servin. employees( and .et
reim*ursement of expenses from the departments to -hich they *elon..
/." It is a fact that E4I0 medical scheme caters for more than $A millions of
*eneficiaries in the private factory employment sector. If the E4I 4ystem -ith a
net-or2 of ++ hospitals, +" 'nnexes, +## dispensaries and tie up -ith "#+
private medical practitioners *esides -ith a lar.e num*er of 4uper 4pecialty
Fospitals can provide medicare, -hy should not 0GF4 ! 04M' cater for the
medicare needs of more than +# la2hs of employees and more than $# la2h of
pensioners spread all over the country li2e the E4I0 *eneficiariesU The /
th
0,0
may 2indly examine the feasi*ility of improvin. the present 0GF4 ! 04M'
formats to ensure Medicare to all 0entral Government employees and
,ensioners. There is no need a*solutely to scout for alternate method. The
recommendation of the A
th
0,0 for suita*ly amendin. 04 &M'( Rules, >++ for
providin. indoor medical attention to a very small se.ment of 0entral
Government ,ensioners residin. in non%0GF4 areas should not pose any
insurmounta*le hurdles. It is fortunate that the nodal Ministry vi;., Ministry of
Fealth and Family =elfare, has accepted the need for Medicare to B# plus retired
personnel that they should not *e deprived of the medicare and the Eudiciary
have ta2en co.ni;ance of this principle, there should *e no hesitation in
amendin. the 04&M'(Rules, >++ for providin. in%door attention to the retired
employees.
CHAPTER :III
Mi&ce%%!neou&
). ,ension should *e net of income tax. 4uch a recommendation -as made *y
the C 0,0 in ,ara B/. of their report *ut the Government did not accept it. It
should reiterate -ith emphasis this demand for reconsideration.
)." C!&u!% G!*our < Contin(ent P!id E"$%o,ee&1 't present 0asual la*ourers !
0ontin.ency paid employees are allo-ed to count their service to-ards pension K
A#I of the total period fallin. *et-een ac:uirin. the temporary status and
re.ulari;ation and full service thereafter. The a*ove *enefit is also su*3ect to further
condition that such employees should *e re.ulari;ed and a*sor*ed a.ainst a re.ular
post. The operation of this condition is so harsh that there are many cases in -hich
the entire service rendered non pensiona*le *ecause the employee may *e retired !
retrenched ! die *efore such re.ulari;ation. =e therefore propose that the A#I of
service *efore ac:uirin. temporary status and full service after ac:uirin. temporary
status irrespective of -hether he ! she -as re.ulari;ed or not should count to-ards
pension. 4imilarly these employees have to remain for lon. durations -ithout any
re.ularisation and are deprived many amenities -hich a re.ular employee .ets. Not
to treat their service pensiona*le for a considera*le period leaves them -ith very
mea.re pension and in some cases -ith no pension. This is a.ainst the principle of
social 3ustice and therefore our a*ove su..estion should *e considered *y the /
th
0,0.
).$ Pen&ion!*%e &er)ice of C!&u!% !nd .DS8 Recent 3udicial pronouncements
have directed the Government to ta2e into account the date of entry in the service as
a casual la*ourer or a temporary status Ma;doors etc into criterion and not the date
of re.ularisation to determine as to -hether he or she is to *e *rou.ht under the
004 &,ension( Rules, >/" or under the N,4. Therefore -e propose that all casual
la*ourers, Gramin Da2 4e-a2s in the Department of ,osts etc are to *e *rou.ht
under the Defined 6enefit ,ension 4cheme under the 004 &,ension( Rules, >/"
for .rant of pension on their re.ularisation in the services, even thou.h they are
.ettin. re.ularisation after .."##+ *ecause they should *e treated as havin.
entered the services *efore .."##+ as per the 3ud.ment of 0ourt. =e therefore
propose that entire service rendered as a casual la*our irrespective of the fact
-hether he -as .ranted temporary status or ultimately re.ularised should *e treated
as pensiona*le service and the service rendered as GD4 in Department of ,osts
also should *e treated in the similar fashion.
).+ Interru$tion c!u&in( forfeiture of &er)ice for $en&ion8 The existin.
provisos definin. interruptions in service causin. forfeiture of past service for
purposes of pension are :uite anti:uated, unnecessary and unreasona*ly harsh,
-hich should *e removed from the statue *oo2. In formative years -hen the 6ritish
'uthorities -ere recruitin. Indians in their 'dministrative 4ervices, it -as noticed that
durin. so-in. and harvestin. seasons, a lar.e num*er of employees used to .o
*ac2 to the fields -ithout any re.ular leave etc. 's a deterrent, the rules re.ardin.
interruption in service had *een le.islated then. 4ince most of the employees have
no- lost their rural roots, such fre:uent and recurrin. interruptions are no lon.er
there. Interruption as and -hen rarely caused is due to reason mostly *eyond the
control of an employee. =e therefore, propose that instead of treatin. interruption to
cause an automatic forfeiture of past service for pensions, it should *e dealt -ith
under 00' Rules. The provision causin. forfeiture of service for pension purposes
on account of interruption may, therefore,, *e deleted.
).A Hou&in(8 0entral Government employees in occupation of Government 4taff
Vuarters on retirement are constrained to hire private accommodation at exor*itant
and prohi*itive rental. They are per force to spend a si;a*le portion of the pension
on rent alone. =hile in services, thou.h they are entitled to .et house *uildin.
advance etc, most of them are una*le to avail the facility and construct house for the
salary income they earn is incapa*le of ma2in. the *oth ends meet. It is therefore
necessary that a provision for reservin. a percenta.e of the num*er of residential
units constructed *y the 4tate ! 0entral Fousin. 6oards and 0orporations, for
outri.ht purchase of allotment on instalment *asis to pensioners. =e therefore
su..est that #I of the total units constructed *y the 4tate Fousin. 6oards, 0entral
Fousin. 0orporations etc to *e reserved for pensioners. 4imilarly :uite a num*er of
staff :uarters sometimes lie vacant -ithout occupation *y servin. employees and
such :uarters may *e allotted for pensioners on payment of 3ust licence fee only. In
addition, dormitory type sin.le room tenements -ith common dinin. hall, li*rary,
cultural centre, auditorium, *asic medical facility etc may *e constructed at the
outs2irts of the cities and allotted to pensioners on payment of a reasona*le amount.
Lntil such schemes are accepted and -or2ed out, FR' may *e .ranted to the
,ensioners on the same rates as is .iven to servin. employees.
).B Tr!)e% Conce&&ion8 4enior 0iti;ens on attainin. the a.e of B# years &Males(
and A) years &females( are .iven fare concession in Rail-ay travel at the rate of
+#I and A#I respectively. =e su..est that retired Government 4ervants may *e
allo-ed the facility of travel concession once in + years to any place inside India from
their place of their residence. =e point out that the purpose of .rantin. DT0 to
servin. employees has an in%*uilt advanta.e of encoura.in. tourism development,
-hich is helpful to the economy in several -ays. 4imilarly any travel concession
.ranted to ,ensioners -ill also *oost the tourism development in the country *esides
*rin.in. happiness at their old a.e.
)./ Re&i(n!tion !& retire"ent1 Resi.nation is tendered *y a Government
4ervant in varyin. circumstances. It is felt, therefore, that resi.nation need not
al-ays result in forfeiture of past services &Rule "B of ,ension Rules( and denial of
,ension. 'n o*3ective vie- is re:uired to *e ta2en *y the appointin. authority in the
case of all those -ho tender resi.nation after completion of "# years of service.
4uch resi.nation may *e treated as voluntary retirement and *enefits extended
accordin.ly. In this connection -e may cite the follo-in. decisions of the Eudiciary1
&a( 0'T Mum*ai full *ench @' No.$)+!>)A decided on )./.>>/
&*( 0'T 'hmeda*ad @' No.+>)!"##" decided on ).#$."##+
&c( 0'T Ea*alpur @.4 No.B"$.>> decided on $.#.>>A
&d( 6om*ay Fi.h 0ourt =, No.BA!>>B and =, No."A)B!>>/ decided on
").#"."##".
Even A
th
0,0 in ,ara $$./> had recommended that terminal .ratuity at difference
rates *e paid to those -ho resi.n after puttin. in certain years of service and
resi.nation after "# years of service may *e treated as voluntary retirement and
pension may *e paid accordin.ly. =e, therefore, re:uest the /
th
0,0 that the a*ove
recommendation may *e reiterated.
).) There are certain employees -ho are in the 0,F 4cheme *ut could not opt
for the ,ension 4cheme in the year >)B. These are mostly -omen employees
employed in 'tomic Ener.y 0ommission etc -ho could not ma2e up their mind as to
-hether they could render the re:uisite num*er of service necessary for .rant of full
pension. In certain autonomous *odies -hile options for ,ension scheme have *een
o*tained, this is not *ein. .ranted. They may no- *e allo-ed to revise their option.
@ur su..estion is that 0,F ! 4R,F retirees may *e .ranted Minimum ,ension.
).> De!t# Re%ief to Pen&ionerD& f!"i%ie&8 The servin. personnel of Lnion
Government are no- .ranted death relief of Rs.####!%Immediately on their death
for meetin. funeral expenses. Even 4tate Governments li2e 'ndhra extend such
*enefit to ,ensioners8 families. 4uch a *enefit may, it is su..ested, *e extended to
,ensioners and family pensioners of the Lnion Government as the latter are also
facin. such similar contin.encies as in case of servin. employees for a sudden need
of the money for spouse or le.al hairs of the pensioner on his death. 4imilar relief
may *e extended in cases -here spouse of the ,ensioner predeceases the
,ensioner.
).# F!"i%, Securit, Fund8 The family of the ,ensioner shall *e .ranted a lump
sum of ,##,### on the death of the ,ensioner *y introducin. a scheme for Family
4ecurity Fund -ith the arran.ement for contri*ution *y the pensioners. 't present
such scheme is in existence in states li2e Tamilnadu, -here the ,ensioner is
contri*utin. a monthly contri*ution of )#!% and in the event of his ! her death, the
spouse is .iven a sum of Rs.A#,### as family security fund. Therefore the /
th
0,0 is
re:uested to examine this proposal for framin. such a scheme for facilitatin.
payment of at least ,##,### rupees on the demise of the pensioners to their
spouses.
). Pen&ion Ad!%!t&8 The system of ,ension 'dalat -as introduced initially *y
Department of ,ension and ,ensioners =elfare and later on adopted *y Rail-ays,
Defence, ,HT Departments. The C 0,0 in ,ara $>./ had recommended that this
system is very effective in finalisin. disputed cases of pensions and should *e
introduced in all the departments. These adalats should also function for settlin. the
cases of field formations and meet at least once in :uarter. The representatives of
the ,ensioners 'ssociations should *e allo-ed to present the cases of the
concerned pensioner -ho may not *e conversant -ith the rules. The a*ove
recommendation -hich -ere not mandatory has not *een implemented. =e
therefore re:uest /
th
0,0 that it should *e made mandatory onall the Ministries and
Departments of Indian Government to conduct these 'dalats periodicaly and -ithout
fail. =e also su..est that these 'dalats may *e conducted at different levels -ith the
follo-in. fre:uency1
i( Divsional level @nce in $ Months
&ii( Wonal ! Re.ional level @nce in B Months
&iii(Fead :uarter level @nce in a Pear
&iv(Ministerof 4tate in D@,T level @nce in " years
)." SCO:A8 The forum of 40@C' &4tandin. 0ommittee of Coluntary
'ssociations( is facilitated *y the 0entral Government for interaction -ith the
,ensioners8 @r.anisations for discussin. the issues of pensioners. This forum has
no statutory authority as li2e the ne.otiatin. forum founded for ne.otiatin. issues of
0entral Government employees vi;., the National 0ouncil E0M -ith mandatory
facility for compulsory ar*itration and other *enefits li2e National 'nomaly
0ommittee to sort out the anomalies arisin. out of implementation of ,ay
0ommission reports etc. 4imilarly there is no system of .rantin. reco.nition to
representative or.anisations of ,ensioners and at present it is at the pleasure of the
0entral Government some of the ,ensioners @r.anisations are invited to 40@C' as
Mem*ers on a rotational *asis only. The num*er of central .overnment pensioners
*elon.in. to various departments is no dou*t in .reat num*ers and therefore there is
necessity to esta*lish a forum -ith formal authority for discussin. and ne.otiatin.
issues of pensioners. It can *e seen that there are hundreds of pensioners8
federations, associations, or.anisations in the country li2e mushroom .ro-th and
there is no orderliness amon.st them and each and every pensioner or.anisation is
raisin. its o-n demands. There is no orderliness in this system. Therefore, -e
su..est, that the CII 0,0 may recommend to the Government to up.rade the status
of the 40@C' li2e the other forum of National 0ouncil E0M -ith separate Rules
framed for .rantin. reco.nition to ,ensioners @r.anisations to .ive them
representation in the 40@C'. 'll the 'll India ,ensioners 'ssociations!Federations
may *e accorded reco.nition H extended such facilities as have *een .ranted to the
servin. employees 'ssociation!Lnions!Federations.
PART II
CHAPTER H I
SECTIONAG MEMORANDUM ON POSTAG PENSIONERS
ISSUES
. The 'll India ,ostal H RM4 ,ensioners 'ssociation -hile endorsin. and
su*mittin. the common memorandum prepared on consensus amon.st various
,ensioners @r.anisations also su*mits this 4ectional Memorandum on ,ostal
,ensioners issues for 3udicious consideration of the /
th
0,0.
III G!r(e&t Ci)i%i!n De$!rt"ent Pen&ioner&
." The ,ostal Department is the third lar.est 0entral Government Department
follo-in. Indian Rail-ays and Defence. Naturally the ,ostal ,ensioners se.ment is
the third lar.est amon.st the 0entral Government ,ensioners. There are more than
",##,### ,ensioners on the rolls of the ,ostal Department8s pension roaster. =hile
the common issues of ,ostal ,ensioners are identical to that of the entirety of
0entral Government ,ensioners, there are certain issues and demands peculiar to
,ostal ,ensioners. This 4ectional Memorandum is an attempt to place those issues
*efore the /
th
0,0 for o*3ective consideration.
Di&cri"in!tion on (r!nt of Medic!% tre!t"ent
.$ The ,ostal ,ensioners -ho are not covered under 0GF4 &0entral
Government Fealth 4cheme( are li2e their counterparts are .ranted FM' &Fixed
Medical 'llo-ance(. 6ut those pensioners -ho -ant to *ecome *eneficiaries of
0GF4 are facin. discrimination at the hands of the Fealth Department for years.
Those ,ensioners -ho -ere already 0GF4 *eneficiaries -hile in service alone are
admitted into the 0GF4 after their retirement. The other pensioners are precluded
from 3oinin. the 0GF4. The 0GF4 is a scheme -herein every *eneficiary is payin.
at the prescri*ed rates set *y the 0GF4. Therefore there is no lo.ic or 3ustification to
deny admittance to any pensioner as a *eneficiary in 0GF4. The ,ensioners of
various 0entral Government Departments irrespective of their *ein. a 0GF4
*eneficiary or not -hile in service are admitted into the 0GF4 4cheme. The ,ostal
,ensioners alone are denied the privile.e of 3oinin. 0GF4.
.+ The reason attri*uted for this non%admittance in 0GF4 is the existence of one
or t-o ,ostal Dispensaries in the particular 4tate. The ,ostal Dispensaries &erst-hile
,HT Dispensaries( -ere recommended to *e mer.ed -ith 0GF4 *y the C 0,0. The
Government did not act on that recommendation. The CI 0,0 also recommended
similar mer.er of ,ostal Dispensaries -ith 0GF4. The Government had
su*se:uently mer.ed only > ,ostal Dispensaries in " 0ities on the plea that only
in those " 0ities there is 0GF4 in existence and therefore the mer.er is feasi*le
only in those cities. This is causin. a serious pro*lem *ecause no ,ostal ,ensioner
in a particular 4tate -here even one ,ostal Dispensary is existin. in any District of
the 4tate, to 3oin 0GF4. The ,ostal ,ensioners residin. under the 3urisdiction of the
,ostal Dispensary in that particular district alone can *e catered *y that ,ostal
Dispensary. Therefore there is no lo.ic or 3ustification for persistin. -ith the stand
that no ,ostal ,ensioner -ill *e allo-ed to 3oin 0GF4, 3ust *ecause there is one or
t-o postal dispensaries in existence in that 4tate.
.A The non%admittance of ,ostal ,ensioner alone into 0GF4 is a clear
discrimination *ein. perpetrated a.ainst the poor pensioners of ,ostal Department.
The 0entral Government -as *rou.ht to notice of this issue *y the 4taff 4ide
National 0ouncil E0M as -ell several ,ensioners @r.anisations had raised this issue
in the 40@C' forum also for remedy. Instead of solvin. this very important issue of
,ostal ,ensioners, the Government is ta2in. shelter under matter pre%3udice clause
since some a..rieved pensioners had already moved the 0ourts in different places.
' recommendation *y the /
th
0,0 -ill sort out this a.e old pro*lem and help the
thousands of senior citi;ens -ho are in dire need of medical needs at their fa. end of
life.
.B It is not out of place to mention that the ,ensioners -ere .iven a favoura*le
verdict in the 0entral 'dministrative Tri*unal of Gerala and upheld *y the Fonoura*le
Fi.h 0ourt of Gerala also under -hich the ,ostal ,ensioners residin. outside the
0GF4 area in the entire 4tate of Gerala are permitted to *ecome the *eneficiaries in
0GF4. Thou.h the 0entral Government had filed 4D, a.ainst this 3ud.ment, the
,ostal ,ensioners of Gerala 4tate are admitted into 0GF4 even thou.h they reside
outside the 3urisdiction of 0GF4 city and irrespective of the fact as to -hether they
-ere *eneficiaries of 0GF4 -hile in service or not. The *enefit of 0ourt Eud.ments
in Gerala should *e extended to all ,ostal ,ensioners in other 4tates as -ell.
Mer(er of !%% Po&t!% Di&$en&!rie& under C.HS
./ The stand of the Government as a.ainst the recommendations of *oth C and
CI 0,0s for mer.in. the ,HT Dispensaries -ith 0GF4 is very ne.ative. Du2e-arm
response -as sho-n after CI 0,0 recommendation and after dilly dallyin. the
:uestion for years, the Governmetn ultimately came for-ard to mer.e only > ,ostal
Dispensaries -ith 0GF4. The Government could have easily mer.ed all the
remainin. ,ostal Dispensaries also *y convertin. those infrastructures of ,ostal
Dispensaries into 0GF4 infrastructure -ith additional expenditure not
unmana.ea*le *y the 0entral Government. There is no meanin. in some
dispensaries in the name of ,ostal Dispensaries -hile a centrali;ed 0GF4 can cater
to the medical needs of all 0G Employees and ,ensioners in a much *etter manner.
The ,ostal ,ensioners covered under the existin. ,ostal Dispensaries are not
considered for treatment of hospitali;ation facilities is a clear case of discrimination
amon.st the same cate.ory of 0entral Government ,ensioners. ' -elfare state
cannot 3ustify its act on any .rounds includin. on the .round of financial *urden to
deny the medical needs for one section of Government ,ensioners -hile the same is
.ranted to ma3ority of 0G ,ensioners. It is reco.ni;ed *y one and all that the
Government -as spendin. from its o-n exche:uer to-ards runnin. the ,HT
Dispensaries for the *enefit of ,ostal and Tele.raph -or2ers -ithout any
contri*ution from employees .oes to sho- that the Medicare is a social -elfare
measure on the part of the Government to-ards its -or2 force. Therefore the 0GF4
thou.h contri*utory in nature cannot *e fully considered as a contri*utory scheme as
it is also a -elfare measure to-ards the 0G Employees and 0G ,ensioners. =e
appeal to the CII 0,0 to recommend for total mer.er of ,ostal Dispensaries -ith
0GF4 -ithout exemption so that all ,ostal ,ensioners can *e *enefited -ithout any
discrimination.
Rent free BSNG %!nd%ine P#one to Po&t!% Pen&ioner&
.) The ,ostal Department -as se.re.ated from the com*ined ,HT Department
on $
st
March, >)A. The Telecom Department later converted into 64ND is .rantin.
rent free land line phones to all Telecom and 64ND ,ensioners and also to ,ostal
,ensioners -ho have -or2ed in the com*ined department of ,HT for more than "#
years at the time of *ifurcation. This means only those employees -ho -ere in ,HT
department in the year >BA or *efore are entitled to .et this concession. The cut off
time fixed *y the 64ND is un3ustified. Most of today8s ,ostal ,ensioners -ere
employees of com*ined ,HT department entered in service only after >BA. 4ome
such pensioners have approached courts and .ot a favoura*le 3ud.ment and *ased
on those 3ud.ments .ot the concession extended to them *y the 64ND. The .eneral
.uideline of the Fonoura*le 4upreme 0ourt of India that all similarly placed persons
should *e extended the same 3ustice held out to any other person is i.nored *y the
0entral Government. This issue is continuously *ein. discussed in the forum of
40@C' *ut the *urden of decision is left on the 64ND -hich is dilly dallyin. the
:uestion for years to.ether. =e fervently appeal to the /
th
0,0 for a
recommendation to the 0entral Government for .rant of rent free land line phone
from 64ND to all ,ostal ,ensioners -ho -ere recruited -hen the department -as
com*ined one irrespective of num*er of years8 service put in *y them in the ,HT
department.
A%%ot"ent of Po&t!% St!ff Bu!rter& for Pen&ioner&
.> There is a tendency amon.st the employees of ,ostal Department to not to
see2 for residential accommodation in the ,ostal 4taff Vuarters for various reasons
includin. o-nin. of their o-n houses and not suita*le to their -or2 spots etc. Many
such ,ostal 4taff :uarters -ere left unoccupied causin. slo- dama.e to the
structure of the *uildin. itself. Instead of 2eepin. the ,ostal staff :uarters
unoccupied, it -ould *e -elcome to allot them to the ,ostal ,ensioners -ho opt for
such :uarters. The analo.y for servin. employees -ho live in 4taff Vuarters is
recoverin. FR' *esides a standard license fee. In the case of ,ostal ,ensioners the
vacant staff :uarters accordin. to the entitlement of the cadre in -hich they retired
may *e allotted to them on payment of standard license fee only as a to2en of
served the department for a num*er of years. 4imilar concession may *e extended
to family pensioners also. =e see2 the 2ind recommendation of /
th
0,0 in this
re.ards.
Free Po&t!(e f!ci%it, to Po&t!% Pen&ioner&
.# Carious 0entral Government ,ensioners li2e the ,ensioners of Rail-ays and
Defence are offered special privile.es li2e Rail-ay ,ass and Defence 0anteens. The
,ostal ,ensioners shall *e extended some such concessions *y the Government as
is availa*le to ,ensioners in 'ustralia. The 'ustralian ,ostal Department &'ustralia
,ost( has implemented a scheme called 5y !ost Concession "ccount# in -hich
postal concessions are offered to sections li2e ,ensioners holdin. ,ensioner
0oncession 0ard etc. The ,ostal ,ensioners should *e .ranted such facilities for
free posta.e in a year.
C#!$ter II
.r!"in D!- Se'!-& !nd C!&u!% G!*ourer&
Defined Pen&ion to .DS Pro"otee& on retire"ent
". The ne- entrants on or after .."##+ in the 0entral services are not covered
*y the Defined ,ension *enefit scheme *ut attached to N,4 only. Fo-ever, if any
0asual la*ourer li2e the temporary status Ma;doors etc are re.ularised even after
.."##+, they should *e treated as entered in service prior to .."##+ only as per
the 3udicial pronouncement of Fonoura*le Fi.h 0ourt of Madras. In a recent
3ud.ment the Madras Fi.h 0ourt has held that B temporary status Ma;doors -ho
-ere re.ularised in the Galpa22am 'tomic Ener.y Department after .."##+ should
*e *rou.ht under Defined 6enefit ,ension 4cheme and not under N,4 *y virtue of
their enterin. the services as a 0asual la*ourer -ell *efore the cut of date of
.."##+.
"." In the *ac2.round of the a*ove 3ud.ment -e su*mit that there are thousands
of casual la*ourers -ith or -ithout temporary status in the Department of ,osts
-ithout any scope of re.ularisation for years. Therefore -hen they .et the
opportunity to *e re.ularised, they should not *e placed under the contri*utory N,4
4cheme *ut should *e *rou.ht under the 004&,ension(Rules, >/". =e re:uest the
/
th
0,0 for a positive recommendation to the Government in this issue.
".$ Due to -ron. interpretation of the D@,T as -ell as the Department of ,osts,
hundreds of 0asual la*ourers -ho have *ecome eli.i*le to *e considered for .rant
of temporary status Ma;doors as per the scheme -or2ed out *y the D@,T in line
-ith the 4upreme 0ourt of India8s directive are deprived of the *enefit. The D@,T
order facilitates .rant of temporary status to those casual la*ourers -ho have
completed "+# days of service in a year &"#B days in the case of casual la*ourers
-or2in. in administrative offices( provided they had entered into the service as a
casual la*ourer on or *efore the cut off date vi;., The -ron. interpretation made *y
the D@,T ! Do, *ein. that only those casual la*ourers -ho have completed "+#
days of service on the cut off date itself -ill *e entitiled for the .rant of temporary
status and that the scheme is not a runnin. scheme for those -ho completes the
eli.i*ility on a su*se:uent date to the cut off date. This is not only an ar*itrary
interpretation a.ainst the spirit of the 4upreme 0ourt directive *ut also a.ainst
re.ularisation of casual la*ourers themselves in the services. They -ill *e a*le to *e
re.ularised only if they are .ranted -ith the temporary status and only if they .et
re.ularised they -ill *e a*le to *e made eli.i*le for the defined *enefit pension as
discussed in the fore.oin. para.raph. =e re:uest the /
th
0,0 for a recommendation
*y the ,ay 0ommission for set ri.htin. a .lare in3ustice to pave -ay for convertin.
the period of casual nature as pensiona*le service.
Defined Pen&ion to .DS Pro"otee& on retire"ent
".+ There are rou.hly three la2hs of Gramin Da2 4e-a2s in the Department of
,osts -ho -ere recommended *y the Eustice Tal-ar 0ommittee for the .rant of
pension *y the Government *y treatin. them as civil servants. This -as not accepted
yet *y the Government. Mean-hile as per the analo.y of the 3ud.ment of the
Fonoura*le Madras Fi.h 0ourt, -hich directed to treat the period of casual nature
rendered *y the temporary status Ma;doors re.ularised after .."##+ as employees
entered in service prior to .."##+, these Gramin Da2 4e-a2s also are to *e treated
as entered in to ,ostal 4ervices *efore .."##+ even thou.h they .et re.ularised in
the posts of MT4 ! ,ostman ! Mail.uard etc after .."##+ *y virtue of their lon.
service as GD4 that .ives them the eli.i*ility to re.ularisation.
".A In some cases there are 3udicial pronouncements to the effect that if there is
any shorta.e of service in a re.ulari;ed post for the eli.i*ility to pension &# years
service( to those employees -ho -ere promoted to those posts from the cadre of
Gramin Da2 4e-a2s, then the shorta.e should *e ad3usted from the lon. service
rendered *y them as GD4. The a*ove 3ud.ment has not *een extended to all
similarly placed employees resultin. in them retirin. -ithout any pensionery *enefit.
This is totally un3ustified and a.ainst the le.al pronouncements. =e therefore
su..est that the /
th
0,0 may recommend to the Government for allo-in. such
retirees to .et pension *y treatin. their shorta.e if any in the :ualifyin. service from
the lon. service rendered *y them as GD4 in the past.