Memorandum On Pension and Other Retirement Benefits

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25.05.2014 ---
A COPY OF THE Bharat Central Pensioners
Confederation(BCPC draft !e!orand"! #$B%&TTE' to (th
CPC &# P)ACE' BE)O* FO+ &,FO+%AT&O, OF THE
-ETE+A,#
..................
MEMORANDUM ON PENSION AND OTHER
RETIREMENT BENEFITS
CHAPTER I
Introduction
The Government of India, Ministry of Finance, Department of Expenditure, Resolution No.!!"#$%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.
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.+ 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<
PAGE****

.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
PAGE****

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.
PAGE****

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
PAGE****

-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>.$> #)$).>#
PAGE****

"#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
PAGE****

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.)
PAGE****

$.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
PAGE****

$. 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
PAGE****

$.+ Thou.h the concept of minimum pension and the method of computin. it have not *een explained *y
any of the pay commissions or the Government, it is clear that the Minimum ,ension is A#I of the Minimum
=a.e. The rationale *ehind the percenta.e has no-here *een explained. 2e however thin3 that in order to
ensure that it is adequate, -44* of the minimum wage should be the 5inimum ension. The very concept of
Need 6ased Minimum =a.e is that this is a level of -a.e *elo- -hich a -or2er8s family cannot su*sist !
survive and remain capa*le to perform. That *ein. the concept of minimum -a.e, it should also apply in the
case of Minimum ,ension on the premise that any pension lower than the 5inimum pay is insufficient to
enable a pensioner 6 family pensioner to live or survive.
F1 De!rne&& Co"$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
PAGE****

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
PAGE****

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.
PAGE****

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.
PAGE****

&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
@n attainin. a.e of Increase in I
of family
pension
BA years "#
/# years +#
/A years B#
)# years )#
)A years >#
># years ##
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<
PAGE****

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.
PAGE****

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
PAGE****

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
PAGE****

/. 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
PAGE****

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
PAGE****

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.
PAGE****

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
PAGE****

-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
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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
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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
PAGE****

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.
JJJJJJJJJJJJJJJJJJJ))

N@TE 1% =E TF'NG 60,0 F@R TFI4 0@M,REFEN4ICE MEM@R'NDLM.
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