Soundness of LIC Pension Fund as

Further to my write-up on the above, I feel that a word of caution and clarification is warranted.Even though the percentages of annual pension outgo to the amount in the Pension Fund as at the end of the year has been tabulated for the various years,it has to be remembered that both the set of figures are independent of each other.It is because the pension outgo to the hands of the pensioners happens after the annuities have been purchased by the Pension Trust out of the Pension Fund  as and when Pension starts becoming payable to employees on retirement.

Thus the Pension Fund by and large relates to the in-service Pension optees except to the extent of half yearly DR increases for which purchases  of annuities will be made by the Pension Trust by paying the consideration from the Fund.The said amount will get suitably recognized when  actuarial  valuation  of the Pension Fund is undertaken at the end of the year and the appropriate amount of additional contribution to be made to the Fund will be determined by LIC to include replenishment of the amount paid from the Fund in the year to purchase additional annuities for increased DR payable.Similar adjustment in the opposite direction will happen if there is any reduction in DR during the half-yearly period on account of decline  in average quarterly AICPI index when the Pension Fund will have more amount than required   for a temporary period till next due date of DR revision or  till the end of the financial year  as the case may be.

The Pension Fund may also undergo some variations in the event of death of pensioners or family pensioners during the course of the year and suitable adjustments will be made after the  annual actuarial valuation of the Fund to reduce the appropriate additional contribution  on that account.

I believe that  this must be the normal procedure based on a logical understanding of the mechanism of our Pension Scheme.

Pensioner friends are welcome to enlighten me if there is any variation from what I have stated above.

Greetings.

C H Mahadevan