MINIMUM PENSION UPGRADATION- COMPLIANCE OR CIRCUMVENTION?

MINIMUM PENSION UPGRADATION- COMPLIANCE OR CIRCUMVENTION?

The Delhi High Court in its judgment   dated 27/4/2017, directed LIC to provide upgradation of pension for those who are placed in minimum pension as  at the time of wage revisions, when minimum pension is revised in conjunction with revision of scales of pay. As per the information secured by me under RTI Act, 2169 pensioners got the benefit of upgradation in minimum pension as a result of the judgment. But when I delve into the matter in the light of some grievances received by me from some family pensioners, I have a hunch that much more than 2169 pensioners should have deserved the benefits of DHC judgment but may have been denied their rightful benefit from LIC.

LIVE CASE OF A FAMILY PENSIONER

There was a case of a family pensioner who was the spouse of a deceased employee in the cadre of an Assistant (ex-serviceman) of Raichur Division who retired on 30/6/2003 and later unfortunately  died on 25/3/2015.Being an ex-serviceman with just 17 years of  qualified service, his Basic Pay at the time of retirement was only Rs 11800. The family pensioner was fixed at the minimum pension of Rs 2330 as per the August 2002 wage revision rate. The next wage  revision with effect from 1/8/2012 was notified  in January 2016 but as per the Pension Rules, the family pensioner was not entitled to any benefit of upgradation then.   But after the DHC judgment, it was clear that the family pensioner was eligible for upgradation in minimum pension as she had started getting family pension   much after the effective date of eligibility indicated in the DHC judgment. Because the minimum pension as at 1/8/2007 was Rs 2950 and that as at 1/8/2012  at Rs 4720 in the respective subsequent wage revisions, considering the start of her family pension from 26/3/2015, she should have been fixed at a minimum pension of  Rs 4720 right from 26/3/2015 when her gross monthly revised minimum  pension was more than her existing gross pension fixed. When the matter was taken up with Raichur DO by the family pensioner in 2018, she was informed by the DO/OS-Pension section that she was not entitled to any upgraded pension. I had even talked to SDM, Raichur  to help the family pensioner, but there was no positive outcome as a reference to ZO by the DO had evoked a negative decision from the ZO.A letter was received by the family pensioner on 7/4/2021  from the Raichur DO that as informed by ZO, she was already receiving more than the minimum pension.

Recently I again calculated her entitlement under four scenarios and found that Rs 4720 as applicable on the date of her becoming a family pensioner was the most beneficial one considering the highest gross pension as at 31/7/2021.I had even taken up with ZM who sincerely responded to me, but even that could not help as the Assistant Secretary in the ZO confirmed that the ZO calculations were correct and Central Office had also confirmed the correctness. But no calculations were furnished to the family pensioner.

While making my calculations, I had also validated my calculations with the help of Mr C T Joshi and on further discussions with Mr Joshi, one thing became clear. In order to decide whether the existing minimum pension or revised minimum pension was more beneficial,LIC seems to have compared the existing Basic minimum pension plus DR upto the effective date of wage revision( in this case 1/8/2012)  with the revised minimum basic pension on that date.The gross pension on Basic pension of Rs 2330 as at 1/8/2012 becomes 4825 which was higher than 4720 which was the total revised minimum pension. But in the first full month of April 2015, the revised gross minimum pension was Rs 5976 while the pre-revised gross pension was less at Rs 5941. Thus, the family pensioner has been denied the upgraded family pension by taking a reference date more than two years before she started receiving family pension for deciding which was higher. The gross minimum pension which was higher on 1/8/2012 became lower than the  upgradeable revised gross minimum pension as at 30/4/2015! And LIC did not provide the calculations to the family pensioner.

I understand from the son of the family pensioner that the family pensioner will seek the calculations by making an application under RTI Act.

THE GENERAL ANOMALY ARISING OUT OF LIC's INTERPRETATION OF DHC JUDGMENT

What emerges from the above is that while 2169 pensioners have received the benefit of the upgradation as per the DHC judgment, one cannot be sure how many regular pensioners and family pensioners receiving minimum pension have been denied the benefit of upgradation by LIC  adopting the faulty basis. 'Whichever is more beneficial' stated in the DHC judgment can be on the reference date taken by LIC and also subsequent  when pre-revised pension has been paid to the minimum pensioner.As time passes , with increased slabs of DR every half year the revised gross minimum progressively surpasses the gross pre-revised minimum pension at a rapid pace .In such a situation ,not LIC but the pensioner will have to exercise the option to decide which is more beneficial and there cannot be a summary denial of the court directed right of upgradation in minimum pension .

I give below trend of effect of upgradation of minimum pension in the light of the DHC judgment over the period of the last 4 wage revisions:

REGULAR PENSION

Wage revision date	Minimum Basic Pension	Minimum Basic Pension	Minimum Existing Basic Pension +DR till the date of upgradation	Gross upgraded Minimum pension in August 2021	Existing Gross Pension in August 2021	CAGR of existing gross pension   over the period of upgradation (%)	CAGR of upgraded gross minimum pension (%)
01-08-1997	1100	1480	1472	5218	5022	Not applicable
01-08-2002	1480	1880	1890	5402	5218	7.52	7.83
01-08-2007	1880	3010	3124	5442	5402	6.28	6.80
01-08-2012	3010	4070	4247	5363	5442	6.39	7.14

 

FAMILY PENSIONERS IN 15% LAST SALARY SLAB

Wage revision date	Minimum Basic Pension	Minimum  upgraded Basic Pension from next wage revision effective date	Minimum  Existing Basic Pension +DR till the date of upgradation	Gross upgraded Minimum pension in August 2021	Existing Gross Pension in August 2021	CAGR of existing gross pension   over the period of upgradation	CAGR of upgraded gross minimum pension
01-08-1997	1740	2330	2328	8214	7943	Not applicable
01-08-2002	2330	2950	2976	8477	8214	7.52	7.83
01-08-2007	2950	4720	4901	8534	8477	6.28	6.80
01-08-2012	4720	6370	6660	8393	8534	6.39	7.14

 

It will be seen from the above that the gross upgraded minimum pension gallops at a faster pace than the pre-revised gross minimum pension. So, when wage revisions take place nearly 3 to 4 years after the effective date, it will be wrong on the part of LIC to take the reference date as the effective date of wage revision , but the date of notification should be taken as reference date instead ,to determine the eligibility for upgradation .More importantly, even if the revised minimum pension-when lower- is preferred for long term benefit by the pensioner, the same should be allowed by LIC which will conform to the true spirit of the DHC judgment.

In the latest circular issued by Central Office, the rates of Minimum Pension have been decided in such a manner that as per the basis adopted by LIC , not a single regular pensioner nor family pensioner will get upgradation in minimum pension w e f 1/8/2017.This means that upgradation in minimum pension as implemented by LIC is nothing but farcical. We, from the Retired LIC Class I Officers' Association, Hyderabad have already written a letter to LIC Chairperson pointing out the anomaly. I believe that majority of pensioners affected in this process may be from Class IV & Class III cadres as well as ex-servicemen. In some way  this fact will have to be brought to the notice of the Supreme Court on 10/9/2021 when hearings resume on our SLPs.

I propose to crystallize my thoughts in the light of the above and address a letter to Chairperson after waiting for sometime for enhancement in family pension to 30% of last pay when the anomalies in family pension may get resolved. Interestingly, even though, minimum pension has been revised as at 1/8/2017, not a single pensioner will be eligible for the upgraded minimum pension as the revised minimum pension in all cases will be less than the pre-revised gross minimum pension as at 1/8/2017.

C H Mahadevan