7th CPC : Appeal for restoration of option 1 for Revision of Pension of Pre-2016 Pensioners

Central Government Pensioners: Appeal for restoration of Option 1 recommended by 7th Central Pay Commission for Revision of Pension of Pre-2016 Pensioners

7th CPC  :  Appeal for restoration of option 1  for Revision of Pension of Pre-2016 Pensioners

No. RSCWS/ HO / 7th CPC/2017-16

Dated: 23rd August, 2017

Shri Narindera Modi, Hon. Prime Minister India, 152, South Block, New Delhi-110001
Shri Arun Jaitley, Hon. Minister of Finance, Govt. of India, North Block, New Delhi- 110001
Shri Jitendra Singh, Hon. MOS Personnel, PG & Pension, GOI, North Block, New Delhi-110001

Dear Sir,
Subject: Appeal for restoration of Option 1 recommended by 7th Central Pay Commission for Revision of Pension of Pre-2016 Pensioners - For Parity of Pension between Pre & Post-2016 Central Government Pensioners

Reference: i) DOP&PW OM No.38/37/2016-P&PW(A) dated 12th May, 2017 & 6th July, 2017 ii) Para 10.1.67 of 7th CPC Report for grant of Parity of Pension of Pre & Post Seventh CPC Pensioners

1. We draw your kind attention to the sad plight of large majority of Central Government Pensioners – especially the Pre-2006 Pensioners and more so the Pre-1996 Pensioners, who will suffer a major financial loss in fixation of their Revised Pension on account of an unjust decision on implementation of 7th CPC Report vide DOP&PW OM dated 12 -5-2017 cited above.

2. The Seventh Central Pay Commission (CPC) in Para 10.1.67 & 10.1.68 of its Report had for the first time conceded the long pending demand of the Central Government Pensioners for Parity of Pension between the Pre and Post CPC Pensioners and had recommended the following pension formulation for civil employees including CAPF personnel who had retired before 01.01.2016:

i) All the Civilian personnel including CAPF who retired prior to 01.01.2016 (expected date of implementation of the Seventh CPC recommendations) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he/she had earned in that level while in service, at the rate of three percent. Fifty percent of the total amount so arrived at shall be the revised pension.

ii) The second calculation to be carried out is as follows. The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.

iii) Pensioners be given option of choosing whichever formulation is beneficial to them.

3. Option 1, cited above, was very much feasible to implement as recommended by 7th CPC for revision of Pension of old Pension since according to the survey conducted by the DOP&PW, it was accepted that the Service Records of over 80% of old Pensioners were available, while those of the others could be re-built as per procedure prescribed in the Rules and as was done after 5th & 6th CPC and as per orders of the Courts in numerous cases.

4. Regrettably, the Committee formed by the Government, to consider the feasibility of implementation of Option 1 recommended by the Seventh CPC, while finding it non-feasible, did not care for the interest of the more than 80% of the Pensioners merely to save the Administration from the botheration of Re-building the Service Records of the rest less than 20% Pensioners. This was a great injustice since the 80% of the Pensioners who’s Records are available, shall suffer a loss of Pension just because of missing records of the rest 20%.

5. Instead, the Government accepted the following formula vide OM Dated 12-5-2017, as recommended by the Committee on Feasibility of Option 1:

"the revised pension/family pension w.e.f. 01.01.2016 in respect of all Central civil pensioners/family pensioners, including CAPF's, who retired/died prior to 01.01.2016, may be revised by notionally fixing their pay in the pay matrix recommended by the 7th CPC in the level corresponding to the pay in the pay scale/pay band and grade pay at which they retired/died. This will be done by notional pay fixation under each intervening Pay Commission based on the Formula for revision of pay. While fixing pay on notional basis the pay fixation formulae approved by the Government and other relevant instructions on the subject in force at the relevant time shall be strictly followed. 50% of the notional pay as on 01.01.2016 shall be the revised pension and 30% of this notional pay shall be the revised family pension w.e.f. 1.1.2016 as per the first Permutation."

6. The above said formula will very seriously and adversely affect the Revised pension of a large majority of the Pre-2016 Pensioners on account of following reasons:

a) "Parity of Pension" between Pre and Post-2016 Pensioners - recommended by the Seventh CPC - would be denied to the Pre-2016 Pensioners.

b) In the process of notional pay fixation in successive Pay Commissions, there is a lot of dilution particularly for pensioners who retired in 4th CPC period resulting in big financial loss.

c) Irrespective of the date of retirement, Option 1 would have given the same pension to pre-2016 pensioners depending upon the number of increments earned in the last Level. By denying option 1 there will be sub-groups even within the homogenous group of pre-2016 pensioners.

d) None of the above losses would occur to the Pre-2016 Pensioners if the Option 1 recommended by the 7th CPC is implemented and if the new formula is allowed as a 3rd Option in addition to Option 1 & 2 Recommended by the 7th CPC in the interest of natural justice to all Pre- 2016 Pensioners.

2. It is, therefore, requested that the Pension of Pre-2016 Pensioners be fixed at the highest of the 3 Options - including first two Options as recommended by 7th CPC and 3rd Option as accepted by the Government and Notified vide DOP&PW OM Dated 12-5-2017.

Hoping for a favourable consideration & thanking you in anticipation. With kind regards,

Yours faithfully,
S/d,
(Harchandan Singh)

Source : RSCWS

Railway Senior Citizens Welfare Society elaborates advantages for Pre 2016 pensioners in choosing Importance of Option 1 of 7th Pay Commission for Revised Pension

Railway Senior Citizens Welfare Society elaborates advantages for Pre 2016 pensioners in choosing Importance of Option 1 of 7th Pay Commission for Revised Pension

IMPORTANCE OF OPTION 1 OF 7TH CPC FOR REVISED PENSION
- BIG LOSS IN PENSION IF IT IS DENIED

By N. P. MOHAN, President, RSCWS

Most of the Pre 2016 pensioners will suffer heavy loss in Revised Pension, if the Option 1 recommended by the Seventh CPC is denied to them.

It was after 20 years that 7th CPC recommended parity between past pensioners and those retiring after 1-1-2016 under Option 1    which means  consideration of increments earned while in service as detailed in Para 10.1.67 of  the Report. This objective of PARITY (Recommended by Commission after examining all factors in depth in Chapter 10) is fulfilled  only with  the  implementation  of  option  1  without  any  dilution/deviation.  Non implementation of option 1 on the plea of non availability of record in a few cases will have the following adverse effects:

i)    Pre 2006 pensioners, in particular, who are victim of modified parity will suffer a much bigger loss compared to the post 2006 retirees because in their case the basic pension which is multiplied by 2.57 in the interim phase takes into accounts their increments before retirement. This aspect has been examined in the case of Pre & Post S 19 pensioner as an example. From the Table 1 given below, it will be clear that  the  reduction  in  pension  for  post  2006  pensioner  is  of  a  uniform  small magnitude as compared to the loss increasing exponentially with each increment lost in case of pre 2006 pensioner. Similar is the case in other scales also

ii)  7th   CPC  has  considered  pre  2016  pensioners  as  one  homogeneous  group   (Para10.1.53 refers). It means that all pre 2016 pensioners have to be treated alike. But with denial of option 1, pre 2016 pensioners will get divided into two groups i.e. Pre 2006 and Post 2006 Pensioners - which violates the settled law of equality between the equals.

iii) In  many  cases,  Option  3  gives  much  lower  pension compared  to  option  1 recommended  by  7th   CPC.  This will  be  clear  from  Table  2  below.  Where  a comparison has been made between two options.

Enlcs: 2 Tables

TABLE- 1 SHOWING LARGE REDUCTION IN REVISED PENSION OF PRE-2006 PENSIONERS COMPARED WITH POST-2006 PENSIONERS IF OPTION 1 IS DENIED ILLUSTRATIVE EXAMPLE OF LEVEL 11 (Scale S 19 - PB3)
POST 2006  PENSIONER						PRE 2006 PENSIONER
Increments	Pay with increments @ 3% pa	Corres- ponding Existing pension(col. 2/2)	Revsd pensionwith MF of 2.57	Pension for L 11 as per matrix table	Reductionin pension with denial of Option 1 (col 5-4)	Revsd pensionwith MF of 2.57	Reductio n in pension with denial of Option 1 (col 5-7)
1	2	3	4	5	6	7	8
0	25200	12600	32382	33850	1468	32382	1468
1	25956	12978	33353	34850	1497	32382	2468
2	26735	13367	34354	35900	1546	32382	3518
3	27537	13768	35385	37000	1615	32382	4618
4	28363	14181	36446	38100	1654	32382	5718
5	29214	14607	37540	39250	1710	32382	6868
6	30090	15045	38666	40450	1784	32382	8068
7	30993	15496	39826	41650	1824	32382	9268
8	31923	15961	41021	42900	1879	32382	10518
9	32880	16440	42251	44200	1949	32382	11818
10	33867	16933	43519	45550	2031	32382	13168
11	34883	17441	44824	46900	2076	32382	14518
1. From the above table it will be clear, that pre-2006 pensioners, as victims of Modified Parity will stand to lose more in pension compared to post -2006 pensioners if Option 1 of counting increments is not accepted by Govt. 2. The loss in pension for post 2006 pensioners is in the range of Rs.1700 (from 1468 to a max of 2076 as per col. 6) only and is nearly constant , whereas for pre-2006 pensioners  the loss in pension increases  by almost Rs.1000/- for every one increment (Refer cols. 6 & 8). 3. For example, the loss suffered in pension of pre 2006 pensioner in losing 5 increments works out to 6868 as against 1710 for post 2006 pensioner. N. P. MOHAN 29-9-2016

TABLE 2 SHOWING REVISED PENSION OF SCALE S 29-PB 4 (LEVEL 14) PENSIONERS OF 4th CPC REGIME WITH & 3rd  OPTION BASED ON NOTIONAL PAY OF SUCCESSIVE PAY COMMISSIONS (Para 5 of minutes of meeting  held on 6th October, 2016) vs  OPTION 1 BASED ON INCREMENTS EARNED
Pay on retirement	Notional pay-5th CPC	Notional pay-6th CPC (Fitment table-6th CPC)	Notional pay-7th CPC with MF OF 2.57-3rd option (col.3xMF)	Operative Pay of col. 4 in the next cell of pay matrix (MOF OM dt   25-7- 2016)	Pay based on option 1 with increments ( as per pay matrix)	Pension as per option 3 (col.5/2)	Pension as per option 1 (col.6/2)	Loss of Revised pension if Option 1 is not given (Difference between Option 1 &  3) (col.8-7)
1	2	3	4	5	6	7	8	9
5900	18400	54700	140579	144200	144200	72100	72100	0
6100	18400	54700	140579	144200	148500	72100	74250	2150
6300	18400	54700	140579	144200	153000	72100	76500	4400
6500	18900	56050	144049	144200	157600	72100	78800	6700
6700	18900	56050	144049	144200	162300	72100	81150	9050
6900	18900	56050	144049	144200	167200	72100	83600	11500
7100	19400	56050	144049	144200	172200	72100	86100	14000
7300	19400	56050	144049	144200	177400	72100	88700	16600
NOTE: 1.3rd Option is not suitable at all. The loss in pension is clear from col. 9. 2. Notional pay in 6th CPC in col. 3 has been taken from the Fitment table issued by MOF (DOE) on 30-8-2008. -  Compiled by: N. P. MOHAN 24-10-2016

Source : RSCWS