Calculation of 40% IR

Yes,it is true,but in the Chandigarh contempt case,LIC calculated an additional amount for 10 pre-August 1992 petitioners by merging DR at a single stage as at 1/8/1997.

Two stage merger reduces the revised pension compared to one- stage merger which is proved in this case.

Also,now as per para 27 of the SC judgment dt 31/3/2016, LIC will have to calculate IR  by taking DR as para 3A of Appendix IV.This means that pre-August 1997 retirees will have to be fixed at a Basic Pension as if their pay scales are revised on 1/8/1997.Otherwise how can para 3A be used which is applicable only for those who retired or died after 1/8/1997(&before 1/8/2002) and who had got the benefit of wage revision on 1/8/1997?

We have to wait and see whether LIC will adopt this approach.If they don't,It has to be considered whether SC can be approached and what will be the outcome.If SC directions are followed,there will have to be an one-time upgradation of pension with weightage on 1/8/1997 before calculating IR.

Kind regards.

C H Mahadevan

On Saturday, April 9, 2016, Rksahni <rksahni278@yahoo.co.in> wrote:

1. Earlier you have informed that LIC merged DR at two stages for pre-01.08.1992(31.03.1993).

2. Kindly check up..

With kind regards,

Rksahni

278 Sector 5, Urban Estate,

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On 08-Apr-2016, at 11:03 pm, Colinjivadi Mahadevan wrote:

Dear Mr Sahni,

You have to merge the DR of 10.905x285 on 1/8/1997 to arrive at revised  basic pension of 4818 on 1/8/1997.

REVISED DR/SLAB=4818*.0023=10.814

Total arrears as at 30/4/2016 will be 15516 ***& 40 % will be 6266/-

CHM
***

=[225*REVISED BP+87861*REVISED DR/SLAB]-[225*CURRENT BP+151986*CURRENT DR/SLAB]

=[225*4818+87861*10.814]-[225*1710+151986*10.905]

=[1084850+973623]-[384750+1657407]

=2057673-2042157

=15516 & 40% IS=Rs 6266

On Friday, April 8, 2016, Rksahni wrote:

Dear Shri Mahadevan .
I have made the following calculation of IR as per LIC formula of merging of DR as on 01.08.1997.
I request you to kindly verify my calculation.

1. Shri X
2. DO
3. DOR  30.11.1989
5. Basic pension =   1710=A
6. DR/ Slab.  =10.905=B
7. Total DR as on 01.02.2016 =10.905*1386=15114
8. Gross Pension as on=₹ 16824
9. Total DR Slabs as 01.04.1993=137
10. Total DR as on 01.04.1993=137*10.905=₹ 1493.99
11. Revised Basic Pension as on 01.04.1993=1710+1494=₹ 3204=C=[A+137B]
12. Revised DR/per Slab=₹ 10.7316=D
13. DR slabs as on 01.08.1997=148
14. Total DR as on 01.09.1997=148*10.7316=₹ 1588.28
15. Revised Basic Pension as on01.08.1997=3204+1588=₹ 4792=E=[C+148D]
16. Revised DR / Slab=4792*0.0023=11.0216=F
17. Total No. Of slabs as on 01.02.2016=1101
18.  Total DR as on 01.02.2016=1101*11.0216=₹ 12134.78
19. Total Revised Pension=4792+12135=16926.
20. Increase in Gross Pension as on 01.02.2016=₹ 102 only.
Now you can well imagine how much will be 40%.
21. Now let us calculate total arrears wef 01.08.1997 to 30.04.2016
22. Total No. of Months from 01.08.1997 to 30.04.2016=225
23.  Total no. of DR slabs wef 01.08.1997 to 30.04.2016 for which DR was received =151986.
24. Total No. of DR SLabs after revision of Basic Pension as on 01.08.1997 from 01.8.1997 to 30.94.2016=87861.
25. Total Pension received=225*A+151986*B
26. Total Revised Pension Receivable =225*E+87861*F
27. DifferencE-
=[225*E+87861*F]-[225*A+151986*B]

=[225*4792+87861*11.0216]-[225*1710+151986*10.905]

=225*(4792-1710)+87861*11.0216-151986*10.905

=225*3082+87861*11.0216-151986*10.905

=693450+968369-1657407

=4412                OR
=225[A+137*B+148*D]+87861*F-225A-151986B
=225A+225*137*B+225*148D+87861F-151986B
= 30825B+33300D+87861F-151986B
=33300D+87861F-121161B
= 33300*10.7316+87861*11.0216-121161*10.905
=357362+968369-1321261=-4470

IR=40% OF 4470

=1788

IF ONLY DR IS REVISED AS 100% , THE REVISED DR/ SLAB IN THE ABOVE EXAMPLE WILL BE==11.457
DIFFERENCE OF DR/SLAB =11.457-10.905=0.552
HENCE DIFFERENCE=151986*0.552=Rs 83896.

With kind regards,
Rksahni