THE FOLLOWING IS THE CORRESPONDENCE EXCHANGED BETWEEN SHRI C H MAHADEVAN & SHRI SAHNI
(1)
DEAR SHRI MAHADEVAN,
I give below the formula for Group I
Pensiobersas per LIC METHODOLOGY:-
Methodology adopted by LIC for
calculating arrears due to the
pensioners between 1.1.1986
& 31.71992
LET us. assume as under:-
1. Basic Pension = A
2. DR PER SLAB.on the above Basic
Pension "A" = B.
3. No. of DR slabs as on
1.8.1992=1374. DR as on 1.8.1992= 137 *B
5. Revised Basic Pension as on
1.8.1992 =[A+137*B]=C
6. DR per slab on Revised Basic
Pension C =D
7. No. of slabs on 1.8.1997= 148
8. Revised Basic Pension as on
1.8.1997=E =[C+148*D]
9. DR per slab as on 1.8.1997 on
Revised Basic Pension= E*(0.0023)=F
10. No. of Months from 8/97 to7/15
=216
11. Total No. of DR slabs as on
31.7.2015 under Pensioners Group I who retired upto 31.7.1992. =139884
12. Total No. of DR slabs under
Pensionersy Gr Group III for those who retired between 1.8.1997 and 31.7.2015 =
78324
13. Calculation of Arrears
(a)
GROSS PENSION PAYABLE from 1.8.1997
to 31.7.2015
A=
[216 * E + 78324*F]
(b)
GROSS PENSION RECEIVED from 1.8.1997
to 31.7.2015
B=[216 *A+ 139884* B]
14.
ARREARS. = A- B
a)=. [ 216 E + 78324 F] - [
216 A +139884 B]
E= [C+148 D]=[ A+137 B + 148 D ]
Replacing E in
equation a above
=216 [ A + 137 B + 148 D] + 77324F -
216 A - 139884 B
= 216 A + 216x137x B+216x148xD -216
A- 139884xB
= 216x137xB+216x148xD +78324xF
-139884xB.
=29592xB+31968xD+78324xF-139884xB
=
31968xD+78324xF-110292xB
with regards,
rksahni
(2)
Dear Mr Sahni,
I appreciate your painstaking
efforts to arrive at a template for calculation of arrears by LIC.
But till LIC comes out with the
basis and method they have followed for the calculations, we are not sure
whether they have done the calculations
(1) according to the impugned
High Court judgments, and(2) whether the formulae adopted by them is correct or
not.
There will be two flaws if LIC
follows the method outlined by you:
1)The calculations leave out
pre-August 1997 dues which are the difference in DR between DR on following
in-service formula and the formula followed by LIC as per
Appendix IV;
2)For pre August 1992 retirees,the
two stage DR merger with Basic pension in many cases results in less revised
Basic Pension on 1/8/1997 than that would have resulted from the merher of DR
at one stage on 1/8/1997.This is because there is no weightage taken into
account on 1/8/1992, whereas those who retired
after1/8/1992(in case of Class I
Officers, retired after 1/4/1993)would have got the benefit of weightage on
1/8/1992 on wage revision.
3)These calculations do not factor
in the effect of the M C Jain case judgment which so far LIC has considered as
applicable to only one retired Class I officer.
All the above infirmities will lead
to the challenge of LIC calculations of even the interim relief if the counsel
of the three sets of petitioners choose to bring them to the notice of the Apex
Court on 23rd inst besides standing up forcefully for upgradation of pension.
Kind regards.
C H Mahadevan
(3)
Dear Shri Mahadevan,
I have derived above formula on the
basis of reply received from LIC to a RTI query wherein the LIC has given
examples in excel file separately for Group I & Group II pensioners.For
the first Group they have calculated the revised basic pension as on 1.81997 in
two stages.They have applied the existing rates of DR and not 100% DR
Neutalisation as ordered by Jaipur High Court.
I agree with you that in two stage
method in a few cases the revised basic pension as on 1.8.1997 may be less than
in straight away merging of DR as on 1.8.1997 for 285(137+148) slabs.The above
short formula derived by me is just to arrive the amount calculated by LIC for
remittances to the petitioners.
I feel that at this juncture the
quantum of interim relief is of less importance than to get the CAs of both LIC
& GOI dismissed and get categorical order of SC on both 100% DR
Neutralisation and pension up-gradation at each wage revision.
The SC also has refused to go into
the merits of computation of 20% interim relief.
with regards,
rksahni
(4)
Dear Mr Sahni,
I also got a copy of the
illustrations worked out by LIC and sent to MoF.
But it is neither in conformity with
the Jaipur judgment nor the LIC Board Resolution.It is based on LIC's own
convenient interpretation of the Board Resolution.Nowhere I have seen LIC
mentioning that they have made payment as per the Jaipur Bench judgment or the
Chandigarh High Court judgment,which if they would have done, they would have
been compelled to seek clarifications from either or both of these High Courts
for contested calculations.They have cleverly taken the Board Resolution as
their reference point and conveniently manipulated their calculations to suit
their purpose by selective misinterpretation.
I forgot to add the last point that
makes LIC's calculation formula anomalous,viz that if the method adopted by LIC
which you have elaborated is followed for a family pensioner's arrears where
the regular pensioner was a pre-August 1997 retiree and he died after
1/8/2007,it will be noticed that the revised gross
family pension will be less than the
existing gross family pension.You may try calculating a live example when this
fact will be clear.This anomaly is enough to demonstrate the flaw in the
formula devised by LIC and the method followed by them for calculating
pre-August 1997 retirees' arrears.I have verified such
situation prevailing when I verified
the family pensioners' arrears in Chandigarh cases.In all the cases there was
recovery instead of payment of arrears. Even now,if LIC calculates family
pension arrears for the family pensioners of Retd Class I Federation members
who had died,LIC will not need to pay any arrears to
them (except the regular arrears
upto the date of death after 1/8/1997). Perhaps that is the reason why LIC Class
I retirees' Federation are eloquently silent about arrears to family
pensioners.
I am attaching the calculations for
a live case of a family pensioner whose husband( a Chandigarh petitioner) -an
AAO-who retired on 30/9/1992 died in February 2014.LIC while depositing the
amount in the Chandigarh HC Registry did not show the negative amount of
arrears,but instead only showed the net amount of arrears after reducing the
regular arrears by the recovery amount for family pension arrears.
Kind regards.
C H Mahadevan
