Need for 100% DR neutralisation for pre- August 1997retirees

RETIRED LIC CLASS I OFFICERS` ASSOCIATION

HYDERABAD

( REGD NO: 934 /2014)

President: Y Venkateswarlu          Vice-President: CH Mahadevan     Secretary: M V Ramana

             (9440467768)                                   (9349314013)                              (9848590636)

                                                                                                              

To                                                                                                    DT: 30.07.2013

The Chairperson,

LIC of India,

'Yogakshema',

Mumbai

Dear Sir,

                                    Re: Need for 100% DR neutralisation 

             for pre- August 1997retirees

We wish to inform for  your kind information that there is a report that a Memorandum of Understanding has been signed between IBA and the United Forum of Bank Unions on 28/7/2023 ( a copy of which is attached for your ready reference) whereby it has been agreed that there will be 100%  neutralisation of DR in respect of employees retired before 1/11/2002 subject to approval by the Department of Financial Services. 

The situation in respect of LIC employees retired before August 1997 is similar with a tapering formula for calculating the DR slabs but for the fact some improvements have been affected as per the Delhi High Court judgment dated 27/4/2017. Even with the improvements so effected and implemented by LIC, the retirees drawing basic pension of more than Rs 1250 in case of   Class I Officers retired before 1/4/1993 and those drawing more than Rs 2400 in case of those retired between 1/4/1993 and  31/7/1997 are drawing  less Dearness relief  than if 100% neutralisation of Dearness Relief would have been provided. 

We give below illustrations taking the example of an ADM retired before 1/4/1993 & that of an ADM retired between 1/4/1993 and 31/7/1997 comparing the present DR drawn by them with that with 100% DR neutralisation as at 31/7/2023 on the maximum of the scale:

Illustration - 1

  ADM retired between 1/1/1986 and 31/3/1993

  Basic Pension =2525

DR per slab as calculated by LIC based on Delhi High Court judgment dated  27/4/2017=1250*0.0067+750*0.0055+ 130*0.0033+395*0.0023 =13.8375 ( In fact the DHC had ordered a rate of 0.29% for basic pension from 2131 to 3850 but LIC has applied 0.23%  only).

                                                                                                             Contd……2

--2--

The total number of DR slabs from 1/2/2023= 2026

Total DR for the month of July 2023 = 13.8375*2026= Rs 28034.775

If the DR is neutralised 100%, the rate of DR will be 0.67% of 2525

The DR per slab   for will then be = 2525*0.0067= 16.9175

Total DR at 100% neutralisation = 16.9175*2026= Rs 34274.855.

The loss due to lack of 100% DR neutralisation is thus 34274.855-28034.775= Rs 6240.10  for July 2023.

  Illustration - 2

ADM retired between 1/4/1993  and 31/7/1997

  Basic Pension = 4975

DR per slab as calculated by LIC based on Delhi High Court judgment dated  27/4/2017=2400*0.0035+1450*0.0029+ 1125*0.0023 =15.1925

The total number of DR slabs from 1/2/2023= 1889

Total DR for the month of July 2023=15.1925*1889= Rs 28698.6325

If the DR is neutralised 100%, the rate of DR will be 0.35% of 4975

The DR per slab   for will then  be = 4975*0.0035= 17.4125

Total DR at 100% neutralisation = 17.4125*1889= Rs 32892.2125

The loss due to lack of 100% DR  neutralisation  is thus 32892.2125-28698.6325= Rs 4193.58 for July 2023

We therefore urge upon you in the light of the MOU between the IBA and UFBU to kindly place before the LIC Board a proposal for 100% neutralisation of DR  for pre- August 1997 retirees of LIC so that the anomaly as illustrated above can be removed.

The DHC while granting the partial relief had ordered payment of benefits from the date of the first Writ Petition filed. The first Writ Petition was filed by Mr K M L Asthana on 18/12/1998  and hence the  100% DR neutralisation may kindly be effected w e f 18/12/1998 and the difference in DR may be paid to all eligible pensioners. All the surviving retirees of the period before 1/8/1997 are super senior octogenarians and a good  number of thousands of them have also passed away in the course of the last 26 years. So it is   necessary that the nominees of the deceased retirees and the family pensioners are also paid the admissible amount of arrears after effecting 100% DR neutralisation. The matter may kindly be taken up actively before the LIC Board and approved recommendations may kindly be sent to the Department of Financial Services for their final approval.

Thanking you,

Yours faithfully

Secretary

Encl: As above

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E-mail; m.ramana1956@gmail.com  

Address:  H.NO: 16-2-836/A/16, LIC Colony, Saidabad, Hyderabad  500059