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Tag Archives: pension

Pension Revision unduly delayed.

06 Wednesday May 2020

Posted by VAN NAMBOODIRI in AIBDPA - BSNL DOT Pensioners, Pension

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AIBDPA, pension

Granting pension revision to BSNL retirees w.e.f. 01.01.2017 is delayed for more than three years. There has been no increase in pension for last 13 years except increase of due DA. (It is also being denied to a section of pensioners).

Many pensioners have passed away since 2017 without getting their pension revision. Centre continuously speaks about the need to look after the aged people, especially during Covid 19. After meeting more than 200 Members of Parliament including Central Ministers by AIBDPA leaders, many of the concerned M.P.s have raised the matter in Parliament and also with Prime Minister.

It is unfortunate that the govt. is sitting tight on the issue without issuing orders. There is no other way but to continue our efforts as also struggles.

We demand the government to issue orders on Pension Revision with 15% fitment without any further delay. (AIBDPA website)

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Extension of Validity of CGHS Card in view of the Corona Virus (COVID-19) Infection

07 Tuesday Apr 2020

Posted by VAN NAMBOODIRI in Pension

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CGHS, pension

Extension of Validity of CGHS Card in view of the Corona Virus
(COVID-19) Infection

.15025/17/2020/ DIR/CGHS/
Govt. of India
Min. of Health & Family Welfare
Directorate General of CGHS
545-A Nirman Bhawan, New Delhi.
Dated the 1st April, 2020
OFFICE ORDER
Subject: Extension of Validity of CGHS Card in view of the Corona Virus (COVID-19) Infection.
In view of the Corona Virus Disease (COVID-19) , all out efforts are made by the Government to contain its impact by instituting measures at community as well as at individual level. Guidelines for maintaining social distancing between individuals have already been issued by the Government.
In the spirit of above guidelines, the undersigned is directed to convey that the validity of CGHS Cards expiring on 31st March 2020 may be extended in respect of CGHS pensioner beneficiaries contributing on annual basis and Central Government serving employees superannuating on 31.03.2020 , as per the details given under:

(i) In case of CGHS pensioner beneficiaries, who contribute the subscription on annual basis and whose CGHS cards are valid till 31st March 2020, the validity period may be extended till 30th April 2020 in the Data Base, by Additional Directors City/ HQ (in Delhi) on the basis of request received over e-mail from such A paper print-out may be signed and scanned copy of the same shall be sent to the beneficiary by e-mail , with a direction to submit the relevant documents and subscription before 30th April 2020.

(ii) Similarly, if a request is received by e-mail from serving employees , who superannuated on 31.03.2020 and are not in receipt of PPO, the CGHS Card may be converted as pensioner CGHS Card and validity period extended to 30th April A paper print-out may be signed and scanned copy of the same shall be sent to the beneficiary by e-mail with a direction to submit the relevant documents and subscription before 30th April 2020 . Additional Director City/ HQ (in Delhi) will verify the date of superannuation from CGHS database before processing the request. If a Govt Servant superannuating on 31 .03.20 was not a member of CGHS during service then he will have to submit a proof of superannuation.

(iii) The period of extension will be included when the card validity is regularised on depositing the subscription.

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Organise Massive Demonstration on 12th March 2020 – AIBDPA.

07 Saturday Mar 2020

Posted by VAN NAMBOODIRI in AIBDPA - BSNL DOT Pensioners, Pension

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BSNL, March, pension

Organise Massive Demonstration on 12th March 2020 – AIBDPA.
The Parliament March on 12th March called for by AIBDPA demanding Pension Revision for BSNL Pensioners w.e.f. 01-01-2017 has been deferred due to the tense and complicated situation in Delhi. AIBDPA calls upon all our units to organize massive demonstrations on the same date in front of the District / Circle authorities. Maximum participation is to be ensured.
Those districts/circles that have not yet met the M.P.s in their area are requested to meet them urgently and present the memorandum as directed earlier and send the report and photo to CHQ so that the same can be posted in the website.
K.G.Jayaraj,
General Secretary

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-78569 – It is not a mere number.

24 Friday Jan 2020

Posted by VAN NAMBOODIRI in AIBDPA - BSNL DOT Pensioners, BSNLEU, Pension

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BSNL, pension, VRS

-78569 –
It is not a mere number.
It is a harsh reality, the number of BSNL employees who were compelled to take VRS, by threat of transfer, reduction in retirement age, 12 hours work, no salary and a sugar coated offer with many pitfalls.

The VRS offer with threats was a double edged weapon – to reduce manpower thus weakening service leading to privatisation and also deny full eligible pension to the VRS optees by not allowing them retirement on superannuation. Govt is expected to save lakhs of crores of rupees through reduced pension.

But AUAB / BSNLEU and All India BSNL DOT Pensioners Association are there to defend BSNL and the VRS pensioners.

AUAB/BSNLEU have already given excellent suggestions to improve BSNL and make it profitable.

AIBDPA has met top officers of DOT to ensure that Pension is paid to all the
78569 VRS retirees by 29th February itself. In case, all these cases could not be completed in time, then at least provisional pension should be paid, which suggestion was accepted by DOT.

There are many pitfalls in VRS. AIBDPA, the biggest pensioners organisation in BSNL is committed to safeguard the interests of all BSNL DOT pensioners including VRS pensioners.

AIBDPA is already on the struggle path. On Pension Revision issue it is approaching all M.P.s in the country to take up the matter with Prime Minister. Already more than 30 M.P.s have been met, who assured to take the matter with govt. Tens of thousands of signatures are being collected in Memorandum to be submitted to Prime Minister. Thousands will participate in Hunger Strike in front of CCAs on 12 February.

Tens of thousands of BSNL DOT pensioners will March to Parliament on 12 March on these demands.

AIBDPA welcomes all VRS retirees to its fold to unite and fight for the demands of pensioners.

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Kerala Budget – Senior Citizen Pension increased to Rs.1,200

31 Thursday Jan 2019

Posted by VAN NAMBOODIRI in General, Pension

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pension

In the Kerala Budget presented today by Finance Minister Dr. Thomas Issac, the Senior Citizen Pension which at present is Rs.1,000 will be increased by Rs.100 and fixed at Rs.1,200. During the next three  years, it will be increased by Rs.100 every year reaching to Rs. 1500. The demand raised by the Senior Citizens Friends Welfare Association was that it should be increased Rs.500 every years so as to reach Rs. 3,000 gradually.

Heart Congratulations to the Kerala LDF Government.

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Memorandum to Prime Minister by National Co-ordinating Committee of Pensioners Associations (NCCPA)

21 Friday Dec 2018

Posted by VAN NAMBOODIRI in NCCPA

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Memorandum to Hon’ble Prime Minister

NATIONAL CO-ORDINATION COMMITTEE OF PENSIONERS ASSOCIATIONS.
13-C Feroze Shah Road,
New Delhi.110 001
Website: http://www.nccpahq.blogspot.com
Email. nccpahq@gmail.com

President: Shiv Gopal Misra: Ph: 9717647594
Secretary General: K.K.N. Kutty Ph: 9811048303

Dated: 27th November, 2018.
To
The Honourable Prime Minister,
Government of India,
South Block,
New Delhi. 110 001.

Dear Sir,

We submit herewith a memorandum containing the demands, issues and grievances of the Central Government Pensioners. We request your goodself to kindly cause consideration thereof with a view to provide relief to them.

Thanking you,
Yours faithfully,

Sd/-
K.K.N. Kutty
Secretary General.

Memorandum

On behalf of the community of pensioners who retired from various Central Government establishments after putting in more than three decades of active service, we submit the following for your kind consideration and necessary direction to the concerned to evolve solutions to the issues raised therein. Before we dwell upon the issues in detail, permit us to mention sir, that NCCPA is the apex organisations of the Central Government Pensioners Associations in the country. Our affiliates also include associations of Pensioners of the Central Autonomous bodies. The grievances of the Pensioners mainly arise from the non-settlement of the following issues.

1. Implement option No.1 as per the pension fitment formula as recommended by the 7th CPC and grant MACP benefit with effect from 1.1.2006 .

The 7th CPC in appreciation of the demand placed by the Central Pensioners organisations jointly had recommended two distinct methodology of Pension revision leaving it to the beneficiaries to choose whichever is beneficial to them. The entire pension community was highly appreciative of the said recommendation and pleaded for the acceptance thereof to the Government. Unfortunately the Pension Department advised the Government not to accept Option No.1 on the ground that it was not feasible to be acted upon. The Government heeding to the said advice, accepted the recommendation and issued notification in which it was specified that the acceptance of the Government of the 7th CPC suggestion is subject to its feasibility of implementation. The subjective clause in the Notification was without precedence and appeared to be strange. In order to meet out the objections from large number of Pensioners, a Committee under the chairmanship of the Secretary of the same Pension Department was set up. The Committee made the same recommendation to the effect that the suggestion of the 7th CPC contained in Option Nol1 was not feasible. They however suggested to the Government an alternative formulation to replace the recommendation of the 7th CPC. This was primarily to benefit the officials in organised Group A service, where career progression was time bound. In a written submission made to the Committee, the Staff Side of the National Council JCM pleaded for offering all the three alternatives so that the pensioner would be able to choose whichever was beneficial to them. The Committee’s conclusion that option No. 1 was not feasible was flawed in as much as the document, which the official side affirmed as the bare necessity to implement Option No. 1 was available in the case of 86% of the pensioners, even according to the Committee’s own finding. The Committee’s report was heavily one sided and was conceived to favour a section of the pensioners, especially those who retired from the higher echelons of the bureaucracy. If the third alternative , which was accepted and implemented had benefited pensioners who had retired from the lower rungs of the hierarchy, it was incidental. Our submission before your goodself is that the Government, having accepted the recommendation of the 7th CPC must implement the same. The feasibility or otherwise of the recommendation must be subjected to critical scrutiny. The Committee’s finding that the Pay Commission’s recommendation was not feasible had been made to enable them to put before the Government the third alternative. There is no difficulty in disproving the Committee’s findings on the question of “feasibility”. A large number of pensioners would have been benefited and the question of parity between the past and present pensioners would have been properly addressed.

Another related issue is the date of effect of the MACP Scheme. The recommendations of the 6th CPC was implemented with effect from 1.1. 2006. However, while issuing the orders the MACP was introduced from a different date i.e. with effect from. 1.09.2008. The matter went first to the Armed Forces Tribunal, where the Govt. lost in as much as the Tribunal made it clear that the Government’s decision to implement MACP from 1.09. 2008 was wrong. The Government took up the matter before the High Court, where again they lost. The matter went upto the Supreme Court,who also confirmed the position taken by the Tribunal. Having reached a finality, the Government issued orders making the scheme effective from 1.1.2006 but only in the case of armed forces personnel, leaving out the Civilian employees and Pensioners from the ambit of their latest order. This is despite many decision of the Honourable Supreme Court that similarly placed personnel should not be dragged to the court for redressal. The Staff Side of the National Council, JCM had taken up this issue with the Government twice but are disappointed as those communications have not been responded with till date. We request that the Department of Expediture, Ministry of Finance and the Department of Personnel may be directed to issue orders extending the MACP Scheme effective from 1.1.2006 in the case of all civilian pensioners.

2. Revise the Pension of BSNL absorbed retirees with 15% fitment recommended by the 3rd PRC and approved by the Government from 1.1.2017 delinking the wage revision in BSNL.

When BSNL was formed in 2000, the entire employees working in the Department of Telecommunications were absorbed in BSNL with assurance of better prospects and pension from consolidated fund of the government of India. Rule 37A was incorporated with the CCS (Pension) Rules , 1972 to ensure them government pension and also their pay was upgraded to IDA scales. The pension revision was given to them with 30% fitment , recommended by the 2nd PRC for the PSU employees from 01-01-2007. Later, they were also granted pension revision based on the 78.2% IDA fitment at par with the working employees of BSNL. But both these revisions were much delayed due to a condition of 60:40 stipulated by the government for payment of pensionary benefits. However with much effors and struggles, this condition was annulled by the Cabinet and the order issued vide No.40-13/2013-Pen (T) dated 20-07-2016. It is stated in the order, Para 2 (b) that “The liability towards pensionary benefits including family pension to the BSNL employees (excepting those recruited after 01-10-2000), as per sub rule, 22 of Rule 37-a of CCS (Pension) Rules, 1972, lies with the government.”

The 3rd PRC has recommended 15% fitment for the pay revision of PSU employees with effect from 01-01-2017 which has been approved by the government. The BSNL absorbed government retirees are fully justified to get their pension revised with 15% fitment from 01-01-2017 without linking to the wage revision of BSNL employees. Wage revision of BSNL employees is being delayed due to the affordability condition laid down by the 3rd PRC. The pension revision of BSNL absorbed government retirees has nothing to do with the finance of BSNL, as the entire liability lies with the central government. The Department of Telecommunications, despite the assurance by the hon’ble Minister of Communications for early pension revision, is adopting a negative approach and their mindset , even after a series of discussions and struggles, is for the pension revision only after pay revision of BSNL employees. The central government pensioners have already got their pension revised from 01-01-2016 as per the recommendations of 7th CPC. So it is a great injustice being meted out to the BSNL absorbed government retirees by denying the due pension revision, even after two years of their counterparts in central service got their pension revision.

3. Revise Pension of Central Autonomous Body pensioners.

There are more than 600 Central autonomous bodies. Thousands are employed in these institutions. These institutions were created as special vehicles to deliver certain goods and services for public benefit. Most of these institutions have adopted Govt. of India rules and regulations and service conditions. Some time back, the Govt. issued an executive fiat making it obligatory for these institutions to generate own funds and be self reliant. The said fiat as pointed out by the Managements of these institutions, were impracticable unless the user charges are increased manifold putting the public at large into unbearable financial burden. After the 7th CPC’s recommendations, most of these autonomous bodies revised the wages of the working employees and officers, but chose to punish the pensioners. In quite a number of cases, the pension revision has not taken place. Even the entitled dearness relief was not sanctioned in certain cases. It is our ardent plea to your goodself that the pension revision in the case of retirees from the autonomous bodies may be directed to be undertaken immediately and the funds required for the purpose being made available to these bodies.

4. Provide notional fixation of pension under Option No.3 on the basis of the pay scale/grade pay/pay level from which the pensioner retired. Provide fixation of pay in the case of all pre 2006 pensioners on the basis of the grade Pay/pay level/pay scale of the post or cadre from which one has retired as per the judgements of the court.

It is the interpretation of the Department of Expenditure that led to the denial of the legitimate quantum of pension in respect of some of the pensioners, who could not avail the benefit of pay scale revision during their service. The issue had been the subject matter of judicial scrutiny and the judgements were clearly against the interpretation of the Department of Expenditure Instead of accepting these court verdicts, the Govt. had been dragging the poor pensioners to higher courts denying them what is legitimately due to them. While the serving employees are given the benefit of revision of pay scale or grade pay, the same is denied to the Pensioners. In some cases, the Govt. has implemented the decisions of the tribunal denying the benefit to the other similarly placed personnel. The attitude of the Department of Expenditure has only led to the increase in the number of cases in the court apart from placing unbearable financial burden on the pensioners. This is also clearly against the principle/policy announced by the Government while setting up the administrative tribunals to the effect that the Govt. would abide by the decisions of these tribunals with a view to speed up the delivery of justice. It has now become a common practice for the Govt. to approach the High Court and Supreme Court whenever the decisions of the tribunals go contrary to the position taken by the Govt. We request you to kindly direct the Department of Expenditure to reverse their untenable interpretation in the matter and render justice to the Pensioners.

5 & 6. Extend the benefit of CS(MA) rules to all pensioners who are not covered by CGHS. Increase the FMA to Rs. 2000 pm as has been granted to PF pensioners. Introduce the health insurance scheme as suggested by the 7thCPC.

CGHS came into existence decades back inconsideration of the dire requirement of addressing the health cared needs of the Central Government employees. It commenced its operation in a few stations initially and was later widened to cover 26 important towns of the country including almost all metro cities. It received wider appreciation from the employees and Pensioners. However, its expansion was arrested in the post 1991 period, especially after the report of the Expenditure Reform Commission was submitted to the Government. Its service was curtailed and the budget allocation was drastically reduced. The number of empanelled hospitals at certain points of time got reduced. In a city like Mumbai, where number of Central Government employees and pensioners is huge, at some point of time, there had been only one or two empanelled hospitals. The health insurance scheme, which was one of the recommendations of the 6th CPC, did not take off. The health care has now become abysmally poor. While this is the case of the employees and pensioners in the CGHS covered areas, the situation in other moffusil stations is precarious. While the working employees have the old CCS(MA)system whereby they could get the expenses reimbursed, the poor pensioners are given a pittance of Rs. 1000 p.m.to meet out the health related expenses. Most of pensioners, being at the advanced age, require hospitalisation for continuous treatment of the ailments. Therefore, the demand for the extension of the CCS(MA) Rules had been raised continuously and persistently for many years. The Government has not responded to this demand positively. Rather on many occasions, the Govt. has expressed their inability to consider this demand fearing the huge financial outflow. We request your goodself, to kindly get the matter seriously examined from the humane angle and pending a decision thereon, kindly direct the Department of Expenditure of the Ministry of Finance to increase the FMA toRs 2000 p.m to the pensioners.
Incidentally, we may also bring to your kind notice that the 7th CPC had recommended for introduction of a health insurance scheme. This is an alternative worth considering by the Government as the insurance scheme will obviate the financial outflow from the exchequer. The Departments of Pension and expenditure may be asked to consider this recommendation seriously and evolve a scheme which would go a long way in addressing the health related problems of the pensioners to a very great extent.
7. Raise the minimum pension to 60% of the Minimum wage i.e. Rs. 10800pm.

Minimum Pension is presently computed as half of the minimum wage determined by the Pay Commissions. One is entitled for full pension on completion of the specified number of years of service. Pension is computed as 50% of the last pay drawn. It is, therefore, discernible that the computation of Minimum pension at 50% had been based on the assumption that pension is normally calculated as half of the last pay drawn. This appears to be not based on any sound principle. Minimum pension is related to Minimum wage. Minimum wage is the wage determined on the basis of the minimum basic and essential requirement of a person’s existence. As per the agreed formulations as early as in 1957, the basic essential requirement is considered to be the requirement of the family of a person. Family is defined as “Husband, wife and two children” treating this as three units. The formula stipulates and provides one unit for the bread earner, 0.8 units to his spouse and 0.6 unit for each children. The point at issue is that the minimum pension cannot be less than the minimum wage. Minimum wage being the least below which a person may not be able to live on, the same analogy must apply to the pensioner. Minimum pension is the need based requirement of a pensioner, whose family includes his spouse who is fully depended upon his pension income. However, taking into account the fact that the superannuation age of retirement being 60, no pensioner in the normal circumstances may have dependent children. The logical conclusion that emerges is that the minimum pension must not be less than 60% because the family of the pensioner shall have 1.8 units which is just 60% of the family units of a working employee. We request therefore, that the concerned may be advised to determine the minimum pension at 60% of the minimum wage, which will work out to Rs. 10,800 p.m.

8. Restore the commutation value of pension after 10 years.

The restoration of the commutation value of pension is made after 15 years. The 5th CPC had pointed out that the period of 15 years is too large in as much as the Government recovers the advance with interest in less than 11 years. Accordingly the 5th CPC recommended restoring the commuted value on completion of 12 years, so that full pension is restored. After the subsequent revision of the commutation value factor, the period by which the government could recover the full amount with interest has further been reduced to 10 years. The recommendation of the 5th CPC was not accepted by the Government. With this decision, the Government is presently recovering almost one and half times of the commuted value along with interest, interest being charged on fictional amount of principal. There is absolutely no justification for the stand taken by the Government in the matter. The Pensioner community feels that the Government is behaving like a cruel and parsimonious money lender. At no point of time, the Finance Ministry has been able to advance any logical argument in support of their reluctance to reduce the period from 15 to 10 years. This apart, quite a number of pensioners will not be able to receive the benefit of restoration as they may not be able to live even up-to 75 years. We, therefore, request you to kindly direct the Finance Ministry to issue orders for the restoration to 10 years.

9. Provide increased rate of pension on attainment of 70 years of age.

Taking into account, the increased financial requirement of a pensioner, the earlier Pay Commission had recommended to raise the pension by 20% on attainment of age of 80. This recommendation was implemented. Many of the pensioners are compelled to spend huge sums of money on health related problems and other debilities once they attain the age of 70. The Pensioners Associations had represented before the 7th CPC to increase the pension by 20% on attaining the age of 70 and a periodic rise to reach 100% on attaining the age of 90. The CPC however, on obtaining the opinion from the Defence Ministry turned down this request, even though the Pension welfare department had suggested to increase the pension on attainment of the age of 75. On such a crucial issue, it was unfortunate that the Pay Commission instead of arriving at an independent decision relied upon the opinion of the Defence Ministry. We are not aware of the circumstances under which the Defence Ministry came to such an unhelpful conclusion. Over the years, as your goodself is aware, the Government had been reducing the rate of interest on fixed term deposits, which had adversely affected the Pensioner community as most of the Pensioners have chosen to invest their retirement benefits on these instruments. While the constant reduction of interest rate by the RBI and consequently by the Financial institutions may be in consonance of the sound macro economic policy matters, there is no way the pensioners could compensate for their reduction in monthly income. They face a piquant situation in as much as they face reduction of their income and an increase in their financial requirement simultaneously. At the advance age, there is no cushion for them to absorb the unanticipated expenditure. Having recognised the fact that the advanced age poses problems it would be in the fitness of things, that the pensioner is granted a small increase in their pension income. We, therefore, request that the suggestion put forth by the Pensioner Community to increase the pension as suggested above.

10. Withdraw the contributory pension scheme and restore the defined benefit pension to all
Central Govt. employees.

The main objective of introducing the new contributory pension scheme in 2004 was stated to be to arrest the financial outflow on account of the constant increase in the pension liability of the Government. The IMF had earlier advised the Government to do so as a measure to contain the fiscal deficit in the Union Budget. The employees organisations had been consistently opposing this move and had been presenting the obvious fact that the pension liability of the Government would not be abated by this move, rather it would only register an increase. The 6th CPC set up a Committee to go into the matter headed by Dr. Gayatri. The Committee’s conclusion was akin to what the employees organisations were all along making. The matter came up for the consideration of the 7th CPC again as by that time the new scheme had been in operation for more than a decade. The Commission received many complaints and suggestions from the stake holders. These had been enumerated in their report. Instead of making any recommendation, the Commission suggested to the Government to set up a Committee to go into these complaints and take remedial measures. Govt. set up such a committee under the Chairmanship of the then Secretary, Pension, who heard the presentations made by the Service organisations and the Pensioners Associations. One of the suggestions made before the committee was to guarantee a minimum pension or a minimum return for the investments being made by the employees during their service career. It is reported that the Committee has submitted its report to the Govt. But the same has not come to the public domain so far. The Pensioners are, rightly so, apprehensive of the continuation of the present defined benefit pension system, they enjoy. The employees, who are recruited after1.12004 are highly agitated as the new scheme guarantees no mimum annuity nor does the projection made by the PFRDA gives them any hope for a decent return for the contribution they make every month which is presently 10% of their Pay + DA. The facts now available with the Government over the financial outflow from the exchequer both in respect of the Pension liability of the employees who were recruited prior to 1.1.2004 and the contribution the Government is to make under the new contributory scheme must convince that the decision taken to introduce the new scheme in replacement of the erstwhile defined benefit scheme had been flawed. If that be so, the scheme requires to be scrapped lock stock and barrel as it has not benefitted the Govt, nor the subscribers, i.e. the employees. The discontent over this ill advised decision is growing day by day and the younger generation of workers and officers have become highly critical. We, therefore, request you to kindly cause a revisit with a view to bring back the defined benefit pension scheme for all Central Government employees.

K.K.N.KUTTY
Secretary General

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Big Demonstration of Pensioners in Athens

07 Sunday Oct 2018

Posted by VAN NAMBOODIRI in Pension

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Athens, pension

Big Demonstration was held on October 4th by the Athens Pensioners’ Unions. The mobilization is part of the new round of action with which the pensioners’ struggle against the policy of the government that hits pensioners and pensions, against old and new pension cuts. Pensioners claim to abolish all reactive health and insurance policies as well as they demand increases in pensions.

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INDIA PENSION SCANDAL – Article by Prabhat Patnaik

07 Sunday Oct 2018

Posted by VAN NAMBOODIRI in General

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NPS, pension

Incredible as it may seem, the union government of India provides a pension to the elderly which amounts to an absurd sum of Rs 200 each per month, and even for accessing this the beneficiary must belong to the BPL population which, as is well-known, is notoriously underestimated. True, the state governments add something to this amount, but, their resources being meagre, the additions cannot be large. What is more, this figure of Rs 200 has remained unchanged since 2006-07; even the elementary courtesy of indexing it to inflation has not been accorded to the elderly.

This is truly a scandalous state of affairs, not just because the sum is laughably paltry, the beneficiary list absurdly truncated, and even elementary protection against inflation missing, but above all because of what it reveals about the government’s attitude. This attitude sees the payment of pension as a largesse on the part of the State, an act of charity towards a set of mendicants. But an adequate old-age pension is actually a right. It is a right not just in an abstract “ought”-sense, but in the concrete sense of being an integral part of the social philosophy which underlay India’s anti-colonial struggle and upon which the Indian constitution is founded.

This philosophy which the Left has always espoused holds that the plight of an individual in society is determined by the social arrangement within which he or she lives. For instance unlike the colonialists of the pre-independence era who attributed the misery of the Indian people to their “laziness”, or lack of enterprise, or subservience to tradition, the anti-colonial struggle advanced the proposition that it was the colonial arrangement that caused the abject poverty afflicting India, whence it followed that this arrangement had to be altered by overthrowing colonial rule and erecting an alternative social arrangement that would guarantee a minimum standard of life to every Indian. The Karachi Congress Resolution in 1931, which outlined what free India would look like, held out this promise, among others. The mass participation in the freedom struggle that occurred in the 1930s was fired by this promise, which thus became a sort of “freedom charter”, upon which the new nation was founded. It acted as a precursor to the constitution.

Even though the constitution did not explicitly codify a set of fundamental economic rights, as it codified a set of fundamental political rights, the former cannot just be wished away, both because they form part of the “freedom charter” underlying the new nation, and also because the latter cannot be enjoyed without the citizen also enjoying a set of de facto economic rights. The assertion of one’s role as a citizen in a democracy cannot occur unless one enjoys a degree of economic security. Hence even though economic rights are not codified as such in the constitution, they are implicit and as fundamental as the explicitly-codified fundamental rights.

Adequate pension to the elderly is one such economic right. It is inherent in the promise underlying the constitution of free India which is visualised as a fraternity of equal citizens. Within this fraternity of equal citizens, nobody is doing anyone else a favour by accepting a legitimate demand for a minimum livelihood.

If adequate pension is an economic right, then it must be universal, like the fundamental political rights enjoyed by all. The pension scheme cannot be either contributory or means-related. It cannot be targeted, not just because any targeting invariably leaves out many deserving beneficiaries, but, more importantly, because it violates the principle of universality that must characterise all rights of citizens. To be sure, in fixing the amount of pension, the fact that a person is already drawing a pension from some other source must be taken into account; and once deduction is made on that score some will automatically get excluded or drop out, but that does not amount to an infringement on a person’s right. Likewise the pension paid by the State to every elderly person as a right must have nothing to do with any contribution from the person concerned. If someone is part of some other contributory pension scheme, he or she may opt out of the State-funded pension, or the pension amount may be suitably adjusted to prevent double benefits; but State-funded pension must be a right for every person, and it must be financed by budgetary sources, unrelated to any contribution from the beneficiary.

The provision of a laughable pittance as pension, as is the current state of affairs, is therefore a violation of the spirit of the Indian constitution, a throwback to feudal times when rulers occasionally showed kindness to the ruled by bestowing favours upon them, of the sort that our governments think they are doing in providing a pittance for a pension.

The Pension Parishad, a network of several groups, organised a dharna in Delhi on September 30 and October 1 to demand an adequate universal rights-based pension. The principle enunciated by the Pension Parishad is that the amount should be half the minimum wage, but in concrete terms the demand was for a pension of Rs 3000 per person per month. The Pension Parishad has organised a similar dharna in 2012 when the demand had been for a universal pension of Rs 2000 per month. Taking into account the price-rise in the interim, the current demand of Rs 3000 is roughly equivalent to the demand of Rs 2000 at that time.

The appropriateness of this figure can be seen from a different angle. Since poverty in India is defined in terms of a daily calorie-intake norm, namely 2100 calories per person per day in urban India and 2200 calories in rural India, the monthly per capita expenditure at which the calorie intake just met these norms could be taken as the pension amount. NSS data from quinquennial consumer expenditure surveys were used to determine these cut-off levels, and, expressed at prevailing prices, they came, in round numbers, as a weighted average between urban and rural areas, to Rs 2000 per month in 2012, which would work-out to around Rs 3000 today.

The number of potential beneficiaries was estimated by the Parishad in 2012 to be around 8 crores, which by now might have increased to about 10 crores. The annual amount required for providing old-age pensions at Rs 3000 per month to these beneficiaries would therefore come to Rs 3.6 lakh crores; allowing for a 5 percent deduction on account of voluntary drop-outs, what is required is just about 2 percent of the country’s current GDP for financing a universal rights-based pension plan.

The question often raised against such a plan is that the country cannot afford this amount. But 2 percent of GDP, it should be noted, is less than a third of the annual increment that occurs in GDP at present. The provision of this amount of pension, if it is financed through taxes paid out of incomes, would not imply any decline in the average post-tax income of the non-pensioners compared to the preceding year. On the contrary it would still mean that compared to the preceding year their per capita post-tax income would increase by about 3 percent. The payment of pensions on this scale therefore does not require any absolute sacrifice by the non-pensioners compared to the preceding year, only a smaller increase in income than would have occurred otherwise. Nobody in short needs to be squeezed in absolute terms for paying out pensions that provide a minimum living standard to the elderly.

We have assumed above that pensions would be paid out of taxes on incomes; but this is unnecessary. A Tobin Tax on currency transactions, or an increase in the existing tax-rate on stock market transactions, or a straightforward wealth tax would be a far more appropriate way of raising resources for pensions, since it would simultaneously serve other purposes such as curbing speculation or reducing wealth inequality. In fact if we assume, somewhat conservatively, that private wealth amounts to four times the GDP, and that the top 1 percent of households in India owns 62 percent of the total private wealth, then a mere 0.8 percent tax on the wealth of just the top 1 percent of households would be quite enough to finance a universal rights-based old-age pension scheme providing minimum benefits. India’s pension scandal can thus be ended quite easily; why it persists is not any shortage of resources but sheer class-antagonism, since the overwhelming bulk of potential beneficiaries are, or would have been, workers, artisans, craftsmen, peasants, and agricultural labourers.

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SCRAP NPS AND PFRDA – PENSION IS MY RIGHT – WE WILL FIGHT FOR STATUTORY DEFINED PENSION

15 Saturday Sep 2018

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Posted by VAN NAMBOODIRI | Filed under AIBDPA - BSNL DOT Pensioners, Pension

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Reintroduction of Old Pension Scheme – Minister answers Lok Sabha Question

11 Saturday Aug 2018

Posted by VAN NAMBOODIRI in General, Pension

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NPS, pension

The Central as well as state government employees’ organisations are demanding that the PFRDA should be annulled, NPS (New Pension Scheme) dropped and that the old defined benefit pension should be restored. They have called for a strike on 15th November, on demands including the above. The pension through NPS will be far less than the defined benefit pension and even is not fully assured. But the government is sticking for NPS. The reply in the Parliament shows the government’s defence of the indefensible. We fully support the demand of the central/state government employees for restoration of the old defined benefit pension scheme.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES

LOK SABHA
UNSTARRED QUESTION NO. 4075

TO BE ANSWERED ON AUGUST 10, 2018/SHRAVANA 19, 1940 (SAKA)
REINTRODUCTION OF OLD PENSION SCHEME

Shri Rakesh Singh

Will the Minister of FINANCE be pleased to state:

the details of drawbacks of the New Pension Scheme (NPS) introduced for the Government officials; whether the NPS is not as beneficial monetarily as the Old Pension Scheme (OPS) and if so, the details thereof; whether the Government employees are disgruntled with the NPS and if so, the details thereof; and whether the Government proposes to reintroduce the OPS replacing the NPS, if so, the details thereof and the action taken by the Government in this regard?

ANSWER

The Minister of State in the Ministry of Finance
(Shri Shiv Pratap Shulda)

(a) & (b) National Pension System (NPS) has been designed giving utmost importance to the welfare of the subscribers. Government has made a conscious move to shift from the defined benefit pension scheme to defined contribution pension scheme i.e. NPS, due to rising and unsustainable pension bill. There are a number of benefits available to the employees under NPS. Some of the benefits are enlisted below:

§ NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz. pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and Annuity service providers. It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interest of subscribers of NPS.

§ The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.

§ Contribution made to the NPS Tier-I account is eligible for tax deduction under the Income Tax Act, 1961. An additional tax rebate of Rs.50000 is also allowed for contributions made to NPS Tier-I under Section 80CCD (1B) of the Income Tax Act, 1961.

§ Subscribers can withdraw up to 25% of their own contributions before attaining age of superannuation, subject to certain conditions. Further, PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (First Amendment) Regulations, 2017” dated 10.08.2017 has liberalized norms for partial withdrawals which also include reduction of requirement of minimum years of being enrolled under NPS from 10 years to 3 years from the date of joining.

§ PFRDA has increased the maximum age limit from 60 years to 65 years for joining NPS-All Citizen Model and Corporate Sector Model, vide “PFRDA (Exits and Withdrawals under the NPS) (Second Amendment) Regulations, 2017” dated 06.10.2017.

§ PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (Third Amendment) Regulations, 2018” dated 02.2018 has facilitated easy exit & withdrawal in case of disability and incapacitation of the subscriber covered under NPS.

§ Transparency and Portability is ensured through online access of the pension account by the NPS subscribers, across all geographical locations and portability of employments.

(c) & (d) Representations have been received which inter alia also include the demand that the Government may revert to old defined benefit pension system. However, due to rising and unsustainable pension bill and competing claims on the fiscal, there is no proposal to replace the NPS with old pension scheme in respect of Central Government employees recruited on or after 01.01.2004.

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