IDA INCREASED 4.8% FROM 1-1-2022

Saturday, 27 July 2019

25-7-19 CENTRAL SECRETARIAT MEETING DECISION CHQ  CIRCULAR

Justification for pension revision with CPC fitment factor
 and delinking pension revision from pay revision.

Committee of BSNL/MTNL Pensioners’ Associations
H. No 6, G No 12th Street, Jogupalya, Halasuru, Bangalore 560008

Convenor – P.Gangadhara Rao
Mobile – 09448088404

Annexure I
Justification for pension revision with CPC fitment factor and delinking pension revision from pay revision

1.   C.G. employees & BSNL/MTNL employees are covered under CCS (Pension) Rules 1972

2.   Sub-rule 8 of Rule 37-A of CCS (Pension) Rules 1972 states “A permanent government servant who has been absorbed as an employee of a PSU shall be eligible for pensionary benefits on the basis of combined service rendered by him in the Govt. & PSU in accordance with the formula for calculation of pension/FP under these rules as may be in force at the time of his retirement from the PSU”.

3.    DoP&PW vide its clarificatory letter No.4/19/2009-P&PW(D) dtd.27/3/2009 to DoT stated “BSNL is the only PSU that has been granted a special dispensation under sub-rule (21) of Rule 37-A of CCS (Pension) Rules, 1972 to the effect that the pensionary benefits including family pension to the absorbed employees of BSNL is paid by the Government.  This Department is of the view that the change as per DoP&PW’s O.M. dated 02/09/2008 as mentioned in para 2 above are also applicable to IDA pensioners of BSNL”.

4.   Accordingly, 6th CPC recommendations with regard to a) emoluments for the purpose of all pensionary benefits, ) b) DCRG, c) enhancement in maximum limit of DCRG, d) new commutation table,  e) enhanced family pension for 10 years & f) age-related additional pension (DoT letters dated 15/5/2009, 12/8/2009, 23/6/2011 may be referred) were implemented to BSNL IDA pensioners from 1/1/2006. 

5.    The minimum pay in BSNL from 1/10/2000 is more than the Central Government pay.  It was Rs.4000/- and Rs.2550/- respectively at that point of time.  But the minimum pension for BSNL retirees was Rs.1275/- (DoT OM No.40-13/2002/PEN(T) dated 15/1/2003 may be referred) and Rs.3500/- (para 4.4 of  DoT OM No.F.No.40-17/2008-Pen(T)-Vol.III dated 15th March 2011 may be referred).  So, the minimum & maximum pension for BSNL retirees also is related to the minimum & maximum pay of a central government employee.

6.   C.G.Pensioners & BSNL/MTNL IDA pensioners are getting pension from civil estimate.

7.   C.G.Pensioners & BSNL/MTNL pensioners are eligible for CGHS facilities.

8.  BSNL/MTNL financial position has no relevance for pension revision. Liability of paying pension/family pension to BSNL retirees lies fully with the Government as per 5/7/2016 cabinet decision and DoT order dtd.20/7/2016 and BSNL has no liability. 

9.   There were 28,791 absorbed executives  and 1,36,071 absorbed non-executives  as on 1/11/2016 in BSNL out of which 24,117 executives would retire by 2027 and all non-executives would retire by 2026 (source – BSNL corporate office reply dt.15/11/2016 to RTI query).  But pensioners would be alive for a minimum of another 20 years beyond 2027.  By 2027, pay revision in BSNL would be irrelevant and naturally pension revision cannot be linked to that. 
 Annexure II
Formula
Let the notional conversion take place from 1/1/2016 i.e. 7th CPC implementation date.

On 1/1/2016 Dearness Relief on CDA pattern was 125% and IDA pattern 112.4%.  Take the pension as 100.  Then notional conversion factor would be
100+112.4 = 212.4 divided by 225 = 94.4

By this factor, basic pension on IDA would be multiplied by 94.4 and divided by 100. That amount would become the pre-revised basic pension as on 1/1/2016 and if it is multiplied by 2.57 factor that would be the revised basic pension from 1/1/2016. Then both CDA pension & IDA pension would be at par.  Dearness Relief on 1/1/2016 would be zero and thereafter it may be calculated in CDA pattern for every six months.

For example as on 1/1/2016 basic pension on IDA was Rs.10,000/-.  94.4% of this would be Rs.9440/-.  This amount would be the pre-revised basic pension and this should be multiplied by 2.57 factor as recommended by 7th CPC which would come to Rs.24,261/-.  That would be the revised basic pension on 1/1/2016 with zero percent DR.  Then every six months DR may be granted on CDA pattern.  This will result in an increase of Rs.3,021/- in total pension which works out to 14.22%approximately.

Instead of opening the pandoras box this would be the hassle-free conversion method which may get the nod of nodal department also.


 Annexure III
Financial Implication
Total expenditure on MH 2071 in 2015-16 for BSNL IDA pensioners/family pensioners was Rs.5,354.17 Cr. (Source – DoT letter dated 23/6/2016).
MH 2071 includes other retirement benefits like gratuity, commutation etc.  Actual expenditure exclusively for pension would be approximately 70% of the total which works out to Rs.3,748 Cr.

14.22% of this works out to Rs.533 Cr. Approximately per annum.  This cannot be considered as a big liability for the Central Government because it has saved more from BSNL/MTNL employees viz.

a) pension contribution at the maximum of the scale instead of actual pay (Rs.90/- crore more than their counterpart in Central Govt.); 

1)   Though they are entitled to get gratuity as per sec 2 of Payment of Gratuity Act 1972 (this was upheld by Hon. High Court of Allahabad, Lucknow Bench on 3/8/2017) they got the gratuity under CCS (Pension) Rules 1972 which is much less.

To illustrate the gain to the Govt. we give the following 3 examples:-
Employee/ LPD+DA     Due asper          Recd asper         Gain to the
Q/sce                                PG Act      CCS (P) Rules     Govt.
A  40y       Rs.17403   Rs.4,01,608       Rs.2,87,150       Rs.1,14,458
B  39y       Rs.15231   Rs.2,51,312       Rs.3,42,698       Rs.91,386
C  34y       Rs.29715   Rs.5,82,896       Rs.4,90,298       Rs.92,598

Nearly 1.5 lakh BSNL employees have retired during this period and Govt. has gained more than thousand crores.

         Annexure IV
Number of beneficiaries

Total employees as on 1/10/2000         3,63,000 (Cabinet Note 25/9/2000)
Not opted for BSNL                                 3,000
Opted for BSNL                                  3,60,000
Staff as on 31/3/2015                         2,25,512 (BSNL A/R 2014-15)
So, Pensioners as on 31/3/2015            1,34,488
Add retirees for 9 months upto 31/12      10,820
Add MTNL combined Sce optees              22,000
Total pensioners upto 31/12/2015             1,67,308

Number of beneficiaries would be approximately 1,68,000.  It is to be noted that at the time of pension revision from 1/1/2007 total pensioners upto 31/12/2006 was 47,000 and the expenditure was Rs.110 crore per annum asper cabinet note.

It is to be noted that nearly 63% among the non-executives retired from NE-6 to NE-10.
Annexure V
Pension revision for post 1/1/2016 retirees

1) Basic pay as on 1/1/2016 may be divided by 2
2) 94.4.% of that amount may be worked out
3) That amount may be multiplied by a factor of 2.57
4) The difference between the LPD and Basic Pay
As on 1/1/2016 may be worked out
5) 50% of that may be added to the amount with the amount arrived at in number 3
6) That would be the basic pension at the time of retirement
7) DR on CDA pattern may be worked out for this basic pension

X Retired on 31/5/2019 with LPD of Rs.30630/- and a basic pay of Rs.27820/- on 1/1/2016

1)  27820 divided by 2 =                                   Rs. 13910
2)  94.4% of that amount =                               Rs.  13132
3)  Multiply that amount by 2.57 =                    RS.  33750
4)  Difference between 30630 & 27820 =            Rs.    2810
5)  50% of this amount =                                   Rs.    1405
6)  Basic pension @ the time of retirement =      Rs.   35155
7)  DR @ 12% on CDA pattern =                                 Rs.     4219
8)  Total pension with revision =                        Rs.   39374
9)  Total pension without revision 15315+141.4% Rs.   36971
10)               Net increase in total pension          Rs.  2403

Ofcourse, this requires an amendment to sub-rule 10 of Rule 37-A

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