LIC caught in its own web?

Pl  see the attached post.
Greetings.
C H Mahadevan

LIC CAUGHT IN ITS OWN WEB IN CHANDIGARH?

The   double faux pas  by LIC  committed in calculating the dues (according to them) twice  has not only exposed the  game played by LIC  by  trying  to bulldozie its way in the Chandigarh HC,but also a fresh ammunition  for us to push our case for upgradation with greater force. Firstly, LIC made a fresh calculation for pre- August 1992 retirees and secondly the difference payable was wrongly informed before the High Court as interest for the ten petitioners.

In actuality, the recalculation was necessitated for the following reasons:

Reason No 1

The earlier method involved  the calculation of DR from the  date of retirement  upto  1/8/1992 and merging the same with the existing Basic Pension  on 1/8/1992.This merged  total was taken as a notional  revised pension  as at 1/8/1992.On this notionally revised  Basic Pension on 1/8/1992, DR based on the  August 1992-revised DR formula was applied  to arrive at DR as at 1/8/1997 and the same was merged  with the  earlier notionally revised  Basic Pension and the merged total was taken as the revised Basic Pension on 1/8/1997.

When revision was effected in this manner, the basic step of removing the DR anomaly which existed in the form of dual DR formula for retirees and in-service employees was not taken. For this reason the revised Basic Pension on merger   done straightaway at one stage on 1/8/1997 worked out more than as per their earlier calculations.LIC was  compelled to  remove this inconsistency  by  working out a higher revised Basic Pension.

Reason No 2

When ,in respect of 10 pre-August 1992 retirees,LIC undertook  two stage revision  viz on 1/8/1992(notional), and 1/8/1997,it had per force to  convert the notionally revised pension of 1/8/1992 into the actual revised pension on 1/11/1993, which would have had implications of  liability  to pay difference  in commuted portion  pension  with  interest  for delayed portion from June 1995 till date of payment. It was in effect an acceptance of the  principle of upgradation albeit without weightage  As a corollary, LIC cannot escape adopting similar process on 1/8/2002,1/8/2007 & 1/8/2012,Not adopting this principle  is already  hitting the family pensioners hard  with reduction in pension.

LIC decided to play safe by taking the one stage-merger route -of course without removing the DR anomaly and freezing the pension so revised thereby perpetuating the anomalies. If only LIC had   adopted a uniform DA/DR formula for in-service employees and retirees as was done after 1/8/1997, even without  going through elaborate calculations  based on their own erroneous interpretation of the Board Resolution, the existing pension without upgradation would be more.

The LIC Counsel  erroneously tried to explain away the difference  that arose between the above two calculations as interest  payable  which also got recorded in the HC Order dated 16/2/2016.Now that  the HC has ordered on 1/3/2016 that LIC has to file a reply  to our application, the onus is on LIC to   do the explaining   the difference of  Rs 1.29 lks which it has undertaken to deposit  in  the Court .If truth is admitted LIC will be caught and we have to wait and see what untruth will be invented  by LIC   to wriggle out of this predicament.Of course they have  respite upto 5/5/2016 when the COCP will come up for hearing.But it has to be explored how well we can make use of  this  on 10^th March 2016 in our favour.

One thing that clearly emerges from all the above trial-and-error calculations resorted to by LIC is, if the LIC Board Resolution has to be meaningfully implemented, the following steps have to be necessarily taken by LIC:

1.      The DR formulae for retirees from 1/11/1993 to 31/7/1997 will have to be amended on par with DA formula for in-service employees during that period. This is a basic  condition that should dictate any effort to remove DR  anomaly;

2.      Weightage has to be provided for revision of pension on 1/8/1997, 1/8/2002, 1/8/2007, 1/8/2012 and every wage revision date if the DR merger method (with the right DR)is followed on 1/8/1997.

This in effect is OROP. If OROP comes for pre-August 1997 retirees; can upgradation for post-July 1997 retirees be far behind?