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Friday, June 28, 2013


This is Part-2 of the article 'CONFUSION' by Shri Prakasarao.
The subject and the details have been already dealt with.  -  Some of the readers have onceagain asked us these details.  -  For the benefit of such readers, we are placing this article here. - Ed.





LIC FELT NEED TO RATIONALISE DR - IN THIS BACK GROUND, L.I.C FELT  THE NEED TO RATIONALISE THE DEARNESS RELIEF TO PENSIONERS RETIRED BEFORE 1ST AUGUST 1997. THE RULE ON DEARNESS RELIEF CREATED GROUPS AMONG PENSIONERS. THIS IS FOUND TO BE DISCRIMINATORY AND VIOLATIVE OF THE CONSTITUTIONAL PROVISIONS. SO THE E.D(P) PREPARED A FOUR PAGES NOTE TO BE CONSIDERED BY THE LIC BOARD AT ITS 492ND MEETING HELD ON 24-11-2001.

BOARD DISCUSSION AND DECISION - AFTER DUE DELIBERATIONS THE BOARD  APPROVED THE "PROPOSAL" AND DECIDED TO IMPLEMENT IT PROSPECTIVELY AFTER OBTAINING THE GOVT APPROVAL. SO NOW LET US SEE THE  "PROPOSAL" CONSIDERED AND OKAYED BY THE BOARD ON 24-11-2001. THIS IS OF GREAT IMPORTANCE BECAUSE THE HON. SINGLE JUDGE OF JAIPUR H.C DIRECTED THE L.I.C TO IMPLEMENT THE RESOLUTION DATED 24-11-2000 PASSED BY THE BOARD.

SO WHAT IS THE PROPOSAL AS MADE OUT IN THE NOTE OF E.D(P). IT IS VERY INTERESTING TO NOTE THAT E.D(P) WROTE A LETTER TO FINANCE MINISTRY, REF: PER/ER/A/G/3457 GOVT.V/MMS DT.29.8.2001 INFORMING THE MINISTRY OF THE PROPOSAL OF RATIONALISATION OF D.R AND UPGRADATION THE PENSION. THEN E.D.(P) PREPARED THE NOTE TO THE 492nd BOARD MEETING DT. 24-11-2001.

I DO NOT HAVE THE 4 PAGE NOTE OF E.D.(P) WITH ME.  BUT I WENT THROUGH THE  AIIPA NOTE ON JAIPUR BENCH. “THE NOTE POINTED OUT TO THE DIFFERENT STRUCTURES OF DEARNESS RELIEF AS PER ANNEXURE IV OF PENSION RULES AND THAT IT RESULTED IN EROSION OF REAL VALUE OF PENSION OVER PERIOD OF TIME AND ALSO CAUSED ADMINISTRATIVE INCONVENIENCE .THE NOTE SAID IT HAS BECOME NECESSARY TO RATIONALISE DEARNESS RELIEF STRUCTURE AND PROVIDE SUITABLE UPDATION FORMULA TO UPGRADE THE BASIC PENSION TO THE EMPLOYEES WHO HAD RETIRED PRIOR TO AUG.1 1997.THE NOTE SAID THAT PROVISION TO UPGRADE DUE TO PERIODICAL REVISION IN CASE OF CENTRAL GOVT. EMPLOYEES IS INCORPORATED IN CENTRAL CIVIL SERVICES (PENSION) RULES ON THE BASIS OF WHICH LIC EMPLOYEES’ PENSION RULES HAVE BEEN DRAFTED.

(THIS IS THE RULE 56 OF L.I.C PENSION RULES.)

THE PROPOSAL INCORPORATED IN THE NOTE WAS TO UPGRADE PENSION AT 600 AND 1148 BY MERGING DEARNESS RELIEF PAYABLE UPTO 1740 POINTS AND TO PAY DEARNESS RELIEF ON THE UPDATED PENSION AT .23% OVER 1740 POINTS.”
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SO THE OBJECTIVE OF THE NOTE IS TO HELP THE PENSIONER OF PRE-AUGUST 1997 WHO USED TO GET TAPERING D/R BY ALLOWING THEM 100% NEUTRALISATION AT 1740 POINTS I.E.  UP TO THE WAGE REVISION EFFECTIVE FROM 1ST AUG. 1997. ALSO TO UPGRADING OF BASIC PENSION TO PENSIONERS WHO RETIRED BEFORE 1-8-1987, 1-8-1992, 1-8-1997 I.E.  GIVING THEM THE BENEFIT OF RESPECTIVE WAGE REVISION TO BE CLEAR RETIREES BEFORE 1-8-87 WILL GET THE BENEFIT OF THE WAGE REVISION OF 87,92,AND 97. PENSIONERS WHO RETIRED BETWEEN 1-8-87 AND 31-7-92 WILL GET THE BENEFIT OF 92 AND 97 WAGE REVISIONS. RETIREES DURING THE PERIOD 1-8-92 AND 31-7-97 WILL GET THE BENEFIT WAGE REVISION OF 1997 AND ALL PENSIONERS FROM 1-1-1986 TO  31-7-1997 WILL GET D/R .23% AS AGAINST THE EARLIER TAPERING MODE.   

I ALSO REPRODUCE HERE THE ITEM NO.D OF THE REPLY GIVEN BY L.I.C.  TO THE I.A NO.7-8 OF 2013.  IT IS THE ITEM NO 9 OF PROCEEDINGS OF THE 492ND MEETING OF LIC BOARD.

“(9) AMENDMENT TO LIC OF INDIA (EMPLOYEES) PENSION RULES 1995 UPGRADING OF THE BASIC PENSION TO AICIPI 1740 POINTS AND 100% DA NEUTRALISATION THEREON IN RESPECT OF RETIREES PRIOR TO 1-8-97. EXECUTIVE DIRECTOR (PERSONNEL) INTRODUCING THE SUBJECT MENTIONED THAT THERE WERE THREE DIFFERENT RATES FOR DIFFERENT GROUPS OF PENSIONERS AT PRESENT DEPENDING ON THEIR DATE OF RETIREMENTS WHICH CAUSE CONSIDERABLE ADMINISTRATIVE INCONVENIENCE. CHAIRMAN POINTED OUT THAT HE HAS SINCE RECEIVED A COMMUNICATION FROM DR.RAMAKRISHNA BOARD MEMBER WHICH REFERS HIS MEETING WITH RETIREES FEDERATION AND REQUESTED EXAMINING THE PROPOSAL IN DETAIL. THE NOTE IS IN LINE WITH THE DEMANDS MADE BY THE FEDERATION VIZ. GIVING EFFECT TO THE PROPOSAL FROM 1-11-93 AND UPGRADATION BY GIVING WEIGHTAGE OF 11.25 AS IN THE CASE OF INSERVICE EMPLOYEES.  CHAIRMAN POINTED OUT THAT THESE HAVE BEEN CONSIDERED BEFORE PLACING THE MATTER BEFORE THE BOARD AND IT WAS FELT IT WOULD INCREASE THE FINANCIAL BURDEN VERY SUBSTANTIALLY AND MAY BE UNAFFORDABLE TO THE CORPORATION. CHAIRMAN POINTED OUT THAT THE IMPLICATIONS ON THE PROPOSAL MADE HAVE BEEN ACTUARIALLY DETERMINED AT RS. 51.37 CRORES AND THE ANNUAL OUTLAY COULD BE IN THE REGION OF 6 TO 8 CRORES.  AFTER SOME DISCUSSION THE BOARD APPROVED THE PROPOSAL AND SUGGESTED THAT IT SHOULD BE IMPLEMENTED PROSPECTIVELY AND AFTER OBTAINING GOVERNMENT APPROVAL.”

THE NOTE OF E.D(P) AND THE PROPOSAL MADE BY FEDERATION OF THE RETIREES ARE IN LINE SO THE BOARD APPROVED THE PROPOSAL. (1) GIVING EFFECT TO THE PROPOSAL FROM 1-11-93 AND UPGRADATION BY GIVING WEIGHTAGE OF 11.25% AS IN THE CASE OF INSERVICE EMPLOYEES. THE HEADING OF THE ITEM (9) OF THE PROCEEDINGS WAS UPGRADATION OF BASIC PENSION TO AICIPI 1740 POINTS AND 100% DA NEUTRALISATION IN RESPCT OF RETIREES PRIOR TO 1-8-97.

SO THE AIIPA NOTE WHICH PROJECTED THE CONTENTS OF THE NOTE OF E.D(P) MENTIONED THE UPGRADATION/UPDATION OF BASIC PENSION AND REMOVING THE TAPERING EFFECT OF THE RETIREES PRIOR TO 1-8-1997. IT SHOULD BE REMEMBERED THAT BY 2001 THE WAGE REVISIONS RELEVANT TO THE PENSIONERS RELATE TO YEARS 1987, 1992, AND 1997. THE BENEFIT OF UPDATION WAS SUPPOSED TO CONTINUE FOR THESE RETIREES IN RESPECT OF WAGE REVISIONS FOR THE YEARS 2002 AND 2007.IF THAT BE SO THE RETIREES AFTER 1-8-1997 SHOULD AUTOMATICALLY BE ELIGIBLE FOR UPDATION CORRESPONDING TO THE WAGE REVISIONS SUBSEQUENT TO THEIR RETIREMENT.

( To be continued. )