Monday, 4 September 2017

7th CPC Pension Fixation - Anomaly arising from the rejection of Option No. 1 for Pre-2016 Pensioners: Agenda Item for NAC Meeting

7th CPC Pension Fixation - Anomaly arising from the rejection of Option No. 1 for Pre-2016 Pensioners: Agenda Item for NAC Meeting
7th CPC Pension Fixation - Anomaly arising from the rejection of Option No. 1 for Pre-2016 Pensioners: Agenda Item for NAC Meeting

Item No 7

Anomaly arising from the decision to reject option No.1 in pension fixation

The 7 CPC on considering various demands raised by the employees and Pensioners, while rejecting most of them at the instance or opinion tendered by the Department of Pension and Pensioners Welfare as also by the Defence Ministry in Para 10.1.67 recommended the following formulation for civilian employees including CAPF personnel who have retired prior to 01.01.2016.

The Govt in its resolution dated 4th August 2016 made its stand on the recommendation as under:

11.Revision of Pension of pre 7m CPC retirees The Commission recommend the following pension formulation for civil employees including CAPF personnel who have 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 may be given the option of choosing whichever formulation is beneficial to them. It is recognized that the fixation of pension as per formulation in (i) above may take a little time since the records of each pensioner will have to be checked to ascertain the number of increments earned in the retiring.Both the options recommended by the 7th Central Pay Commission as regards pension revision be accepted subject to feasibility of the implementation. Revision of pension using the second option based on fitment factor of 2.57 be implemented immediately. The first option may be made feasible after examination by the Committee comprising Secretary (Pension) as Chairman and Member (Staff). Railway Board, Member (Staff), Department of Posts, Additional Secretary & Financial Adviser, Ministry of Home Affairs and Controller General of Accounts as Members
The doubt over the feasibility of implementation of the said recommendations had arisen due to the report tendered by the Secretary (Pension). It was no doubt an unprecedented step taken by Secretary (Pension).

The Govt., unfortunately and unethically too, set up a committee under the chairmanship of the same Secretary (Pension) to go into the very matter of feasibility, who had expressed that very doubt at the beginning and prior to the issuance of the resolution.

The Staff side was provided with an opportunity to represent before the Committee. They had pointed out that it was feasible to implement the recommendation with relevant official records that was supposed to have been kept alive by the Government. The submissions made by the Staff side is annexed. On the specious plea that the Service Books were not available in respect of all pensioners, the committee came to the conclusion that the recommendation is not feasible to be implemented. In fact the committee made a random study on the availability of the records and came to the conclusion that of the 100 cases they had taken up, in the case of 86, the relevant records were available. In other words, the Committee itself found that only 14% of the cases the records, i.e. the Service Books will not be able to be traced. The very fact that there are other equally relevant official records from where the requisite information of the number of years of service the pensioner has put in a cadre/Grade/scale of pay etc at the time of retirement was available, was not considered by the Committee. The Committee thus erroneously came to the conclusion that the recommendation is not feasible to be implemented.

The Committee then went on to suggest an alternative proposal, which was identical to what the 5th CPC had recommended but not acted upon due to huge financial outflow by the then Government. The staff side appreciating the fact that the said recommendation of 5 CPC, if implemented even now will not only benefit the pensioners but also will be capable of removing certain anomalies that might arise if option No 1 is implemented in the case of a few pensioners, suggested that apart from the two options recommended by the 7 CPC, the Committee’s suggestion could be considered as 3rd Option.
The rejection of the suggestion of the staff side and the recommendations of 7 cpc by the Govt regarding option No. 1 on the ground of “infeasibility” is untenable and creates a bad precedent in as much as a Govt Servant or a pensioner is made to suffer financially for the fault of the Govt of not maintaining the requisite official records for verification. For the fault of the Govt not having the records, the pensioners or the employees cannot be punished. The finding that the recommendation is not feasible for implementation is faulted as the committee itself has come to the conclusion that in 84% of the cases, the relevant records are available. The decision amounts to denial of benefit for a vast number of pensioners for the simple reason that in the case of small segment of pensioners the records are stated to be not available. The Committee’s findings are also erroneous on the ground that it did not consider whether alternate documents other than Service Books are available from where the claim of the pensioner could be verified.

From the above, it could be seen that Govt’s decision not to implement option No 1 recommended by 7 CPC is flawed and based upon factually erroneous premises and constitutes a clear cut anomaly. The said decision of the Govt requires to be revisited and pensioners given the benefit of option No 1.

We give a chart indicating the financial loss suffered by pensioners on account of the Govt decision in not implementing the recommendation of 7 CPC concerning option No 1.

Comparison of Basic Pension – option I vis-à-vis new Formula

Year of retirement
Scale of Pay At the time of retirement
Last Pay Drawn
No. of increments earned in the level
Pension as Per Option -1 Of 7 CPC
Pension as per New formula Dt 12.05.2017
Loss of Account of denial of Option -1
(Pay Matrix Level-5)
(Table No. 18)
(Pay Matrix Level-6)
(Table No.25)
(pay matrix level-6)
(Table No.31)
15600-39100+ GP5400
(Pay Matrix Level-10)
9300-34822+ GP 5400
(pay Matrix Level-9)


Copy of letter No NC-JCM-2016/7th CPC (Pension) dated October 17, 2016 addressed to the Secretary, Department of Pension & Pensioners Welfare, Govt. of India, Sardar Patel Bhawan, New Delhi.

Dear Sir,

Sub: 7th  CPC recommendation. Pay determination in the case of Pre-2016 pensioners. Option No.1. Examination of feasibility.

Ref: Minutes of the meeting of the Committee in F.No. 38/37/2016 P&PW(A) Dated 10th October, 2016.

We refer to the discussions held on 6.10.2016 in the matter of feasibility of acting upon th 7th CPC recommendations (Option No.1) in the matter of pension computation and the minutes circulated under cover of the letter cited. At the outset, we would like to state that the members of the Staff Side, who were associated with the discussions, gained an impression that the Pension Department would not like to implement the recommendation of the 7th CPC connecting Option No. 1 provided to the Pensioners in determination of the revised pension. As has been pointed out by us during the discussions on 6th October, the Government has accepted the said recommendation with a rider of its feasibility of implementation. The attempt, therefore, must be to explore the ways and means of implementing the said recommendation, which benefits a large number of retired personnel, especially those retired prior to 1996. It is, therefore, highly doubtful how any alternate proposal in replacement of the accepted recommendation would be tenable.

We have the matter considered by various Pensioners Association as also the Federations of the Serving employees. We enumerate here under the feed-back we have received.

Even according to the exercise carried out by the Pension department, only in 18% of the cases, the service Books are reported to have been not available. Conversely it means that in 82% of the cases the records are available to operationalize option No.1. Besides, we find that on the basis of a random scrutiny that only 40% (Percentage varies from Department to Department depending upon the then prevailing career prospects) generally will opt to have pension fixation under the provisions of option No.1. It will work out to hardly 7% of the cases, where Service Books might not be available. As has been pointed out in the last meeting,

Gradation/Seniority list is maintained for each Cadre by the Concerned Department, where the date of promotion to the cadre inter alia is indicated. The said gradation list will reveal may other details viz, the date of birth, date of entry into government service, date of promotion to the present cadre, whether eligible for next promotion, date of superannuation etc. This apart there are several other documents maintained by the Department, which will come in handy for apart there are several other documents maintained by the Department, which will come in handy for verification of the clam, viz, the pay bills, Establishment files containing promotion orders etc.

In other words it is possible to verify the claim of any individual pensioner or family pensioner and take appropriate decision. In other words, there is no infeasibility question at all. It was also pointed out by many organisations that the retention period of Service Books in all major Departments of the Government of India is 5 years after the death of the Pensioner/ Family Pensioner and not 3 years after retirement as indicated by the Official side at the meeting. This apart, it may also be noted that the option has to be exercised by the concerned individual pensioner and he has to make a formal application to the concerned authorities. He is bound to substantiate his claim with documentary proof, whatever that is available with him.

As was pointed out by some of us in the last meeting, the non-implementation of an accepted recommendation on the specious plea of infeasibility will pave way for plethora of litigation. Apart from the administrative difficulties, the Pension Department would be saddled with if such litigations arise, it would be sad and cruel on the part of the Government to compel the pensioners to bear huge financial burden to pursue their case before the courts of law.

In view of this the Staff sife is of the firm view that the Government issue orders for implementation of Option No. 1 as there is no room for stating that the recommendation is impossible to be implemented for those who are benefited by the said option.

We are aware that certain anomalies are bound to arise on implementation of option No.1 Anomalies have arisen in the past too. What is needed is to examine those anomalies and ensure that those are genuinely addressed.

It may be noted that even under the present dispension, no two Government servants are entitled for the same pension despite they being retired on superannuation from the same grade on the same day. The promotion in lower cadres especially Group B, C and D had been few and far between a decade back in many departments and continues to be the same situation in certain organisations of the Government of India.

The vacancy based promotion system, one must admit, operates in a fortuitous manner. For no fault of the individual employee, he/she may retire without getting a promotion whereas his colleague due to sheer luck might get the promotion at the fag end of the career. The case of those employees who retired prior to the advent of ACP or MACP is really pathetic. They had to remain in certain departments in the same cadres for years together. They are in receipt of a paltry amount of pension through there is nothing distinguishable in their service careers for such deprivation. To deny them the benefit provided by the 7th CPC on the specious plea that the relevant records are not available with the Government may not only be unreasonable but also will not stand the test of judicial scrutiny.

As we have stated in the meeting, the alternative suggestion put forth by the official side is a welcome feature, for it might be a step in the right direction to remove the anomaly pointed out by the Official side when Option No.1 is implemented and will benefit those pensioners who got their promotion at the fag end of their career.. It is also likely to bring about certain extent of parity, if not full, between the old and the present pensioners. However it cannot be in replacement of the recommendation in respect of Option No.1 made by the 7th CPC. The alternate suggestion of the Pension Department may be offered as another option to the pensioners who are not benefited either by Option No.1 or 2 recommended by the 7th CPC. Such an option will eliminate to a great extent the anomalies that might arise from the implementation of option No.1.
In fine, we request that:
The Pensioners/family pensioners may be allowed to choose any one of the following three options;

(a) 2.57 time of the present pension if that is beneficial.

(b) Option No.1. Recommended by the 7th CPC, if that is beneficial for them.

(c) To determine the Pension on the basis of the suggestion placed by the Pension Department on 6.10.2016 i.e. extension of pension determination recommended by the 5th CPC (viz. arriving at notional pay in the 7th CPC by applying formula for pay revision for serving employees in each Pay Commission and consequent pension fixation) to all pre-2016 Pensioners/family pensioners, if that becomes beneficial to them.


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