Circulars Letters issued by All India Canara Bank

As I make out from the series of the circulars, all the pensioners retired from 1/4/1998 to 30/4/2005 will be eligible to get the benefits arising out of the SC judgment dated 13/2/2018 by way of revised pension arising out of implementation of the judgment.

As regards the arrears towards difference in commuted value of pension, it has been rightly demanded in the letter dated 21/4/2018 to Chairman, Canara Bank, that the commutation difference should be paid with interest of 9% from the date of retirement when the commutation value was paid. But when it comes to monthly deduction of difference in commuted portion of pension, it has been demanded that it should be affected only from the date the commuted value of pension is credited.

I see an inconsistency in the demand as while interest of 9% is payable also on the difference of commuted pension, the monthly recoveries of the difference in commuted portion of pension should also commence from the original date of payment of commuted value of pension and the interest at 9% p.a of such monthly instalments should also be offset against the total interest paid. This way the total amount towards commuted portion of pension would also have been completely deducted over 15 years (except in case of deceased retirees before 15 years). This is how it would be actuarially justifiable.

In the LIC case where Mr M C Jain, a retired LIC Officer   got a judgment in his favour from the Jaipur Bench of the Rajasthan High Court that entitled him to revised salary from 1/8/1992 as he had retired on 31/1/1993(before 1/4/1993 from which date wage revision was applicable to Class I Officers in service) and revised pension from 1/11/1993. The SLP filed against the Division Bench judgment of the HC  was dismissed in July 2014.Not only similarly placed about 325 officers were not paid the benefit of the judgment, but also the benefits paid by LIC while 'implementing' the judgment were grossly inadequate. The difference in commuted value of pension was not paid with interest, while the monthly deductions of difference towards commuted portion of pension were commenced from the date the original deductions commenced. This resulted in the mismatch because the amount of total deductions far exceeded the difference in commuted value of pension considering that a rate of about 8% is factored in the commutation factor and interest at this rate had been denied to the pensioner for over 19 years. Against the correct amount of over Rs 2 lks plus due to  the retired officer got just about Rs 12200 by way of arrears.

The point I want to make is that there should be an actuarial fit between the commuted value paid and the monthly deductions towards commuted portion of pension for 15 years for surviving retirees.

In other words commuted value of pension can be treated as a loan given to the retiree of which repayment is made in EMI over 15 years with a provision for waiver of EMI on death of retiree within the period of 15 years.

Greetings.

C H Mahadeva

NOTE :

IN MY VIEW IT IS A LOSS FOR SERVING PENSIONERS TO ASK FOR COMMUTED VALUE FROM THE DATE OF RETIREMENT INSTEAD IT SHOULD BE ASKED ON THE DATE OF PAYMENT OF ARREARS AT THE FACTOR APPLICABLE ON THE DATE OF ARREARS PAYMENT. 

IN CASE OF MC JAIN, LIC PAID DIFFERENCE OF COMMUTED VALUE FROM THE DATE OF RETIREMENT EQUAL TO  9.81 YEARS AND DEDUCTED FOR 15 YEARS RESULTING A LOSS OF 5.19 YEARS. 

R K SAHNI