SHOULD WE FOCUS ON LIC BOARD RESOLUTION ANY MORE?

 SHOULD WE FOCUS ON LIC BOARD RESOLUTION ANY MORE?

The LIC Board Resolution dated 24.11.2001 reads as follows:

“Executive Director (Personnel) introducing the subject mentioned that there were three different rates for different groups of pensioners at present depending on their dates of retirement, which cause considerable administrative inconvenience. Chairman pointed out that he has since received a communication from Dr. S. Ram Khanna, Board Member, which refers to his meeting with the 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 1.11.1993 and upgradation by giving weightage of 11.25% as in the case of in-service employees. Chairman pointed out that these have been considered before placing the matter to the Board and it was felt that the same would increase the financial burden very substantially and may be unaffordable for the Corporation. Chairman pointed out that the implications of the proposal made have been actuarially determined at Rs. 51.37 crores and the annual outlay would 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.”

This resolution clearly acknowledges that, just as in-service employees were granted wage revision by merging Basic Pay and DA up to 1.8.1997 along with a weightage of 11.25% on the merged amount, a similar methodology should be applied to pre-August 1997 retirees. Of particular note is the phrase “giving effect to the proposal from 1.11.1993,” highlighting the intention to address the anomalies in the Dearness Relief (DR) formula outlined in Appendix IV for both categories of pre-August 1997 retirees.

Unlike post-July 1997 retirees, who received 100% DR neutralization on Basic Pension similar to the serving employees’ DA on Basic Pay, the earlier group received disproportionately lower DR due to the tapering slabs being set at half the Basic Pay levels. Thus, from 1.11.1993 to 31.7.1997, there was no equitable DR/DA neutralization.

The Board Resolution, therefore, appears to serve a dual purpose:

1. To rectify the DR anomaly from 1.11.1993 onwards, and

2. To revise the Basic Pension by merging the appropriate DR with Basic Pension up to 1.8.1997 and applying a weightage of 11.25%.

Subsequently, an illustrative chart was prepared and sent on 11/8/2003 by the Executive Director (Personnel) to the Joint Secretary (Insurance), detailing pension revisions for various cadres as of 1.8.2003. However, the calculation failed to correct the DR anomaly or include the 11.25% weightage.

Although the Board's recommendation remains pending approval by the Central Government, LIC’s interpretation and implementation have not been consistent with the spirit of the resolution. On occasions where the Supreme Court directed LIC to deposit funds in the Jaipur and Chandigarh High Court Registries, as well as while paying interim reliefs to pre-August 1997 retirees, LIC confined itself merely to merging the anomalous DR with existing Basic Pension, without addressing the root cause of the anomaly or applying the recommended weightage.

Now that five more wage revisions have been implemented for LIC’s serving employees since 2001, I have recalculated the projected pensions using LIC’s own methodology and extrapolated the data up to 28.2.2025. The results are presented below:

Cadre Existing Basic Pension Revised Basic Pension (1.8.2022) Gross Pension (28.2.2025) Gross Pension Drawn Post-1.8.2022 Monthly Loss % Loss

ED 7000 53033 61179 174382 113203 64.9%

ZM 6325 48673 56149 156455 100306 64.1%

SDM 5725 44805 51687 139566 87879 63.0%

DM 5225 41586 47974 124656 76682 61.5%

ADM 4975 39970 46109 117428 71319 60.7%

AO 4485 36808 42462 102974 60512 58.8%

AAO 4255 35327 40753 97494 56741 58.2%

HGA 3695 31285 36090 78373 42283 54.0%

Assistant 3210 27338 31537 62560 31023 49.6%

DO 3760 31808 36694 86128 49434 57.4%

RC 2235 19321 22289 46311 24022 51.9%

Driver 1995 17250 19900 41235 21335 51.7%

Peon 1710 14783 17054 33178 16124 48.6%

Sweeper 1610 13919 16057 32662 16605 50.8%

Even under this limited upgradation model based on the Board Resolution, the increase in gross pension ranges only from around ₹2,100 (lowest cadre) to a little over ₹8,100 (highest cadre), revealing the inadequacy of such an approach.

Conclusion:

In light of the above, we must reconsider whether continued emphasis on the 2001 Board Resolution is truly in the best interests of pensioners. Rather than pressing for its implementation, we should now firmly urge the Hon'ble Supreme Court to direct the application of Rule 56— as is already being done for the Chairman and Managing Directors under Rule 55B. The precise mechanism and implementation methodology may be left to LIC and the Government of India, ensuring the process is equitable and free of anomalies.

– C.H. Mahadevan