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Reply to 7th CPC Questionnaire item No. 10 relating to Pension by Bharat Central Pensioners Confederation

7th CPC Questionnaire: Bharat Central Pensioner Confederation, New Delhi’s reply to the questionnaire item No. 10 relating to Pension:-


Ms. Meena Agarwal, Secretary VII-CPC vide her DO letter No. VII-CPC/15/questionnaire dated 9th April, 2013 has sought considered views of all stake holders on the questionnaire of the VII-CPC.
Item 10 of the said questionnaire relates to Pension.  Bharat Central Pensioners Confederation, New Delhi, Apex organisations of Federations/all India Central Government Pensioners Associations submits the reply there to for the consideration of the VII-CPC.
Question No. 10.1: The retirement benefits of all Central Government Employees appointed on or after 1.1.2004 are covered by the New Pension Scheme (NPC).  What has been the experience of the NPS in the last decade?

Reply: The NPS envisaged one or more Central Record Keeping Agency (CRA) to maintain records, accounts and effect all instructions regarding subscription, switching of options and withdrawal by the subscriber.  It is also possible that subscribers may access CRA for any information.
It was therefore expected that the CRA would be set up right from the inception of the NPS scheme i.e. from 1.1.2004 and maintain records and accounts of all subscribers.  This was not done.  The CRA has been set up after a considerably delay of more than 3 years.  This has resulted in late opening of Subscribers account causing loss of interest on contributions.  The interest has been credited in the accounts from the date of opening of these accounts by the CRA.  It has also been learnt that Central/State Governments also took time in transferring these accounts to the CRA.  Some state Governments have transferred only the contributions recovered from the subscribers and not the matching contribution from the Government.  Due to these reasons there will be loss of interest to the subscribers during the period for which the accounts were not opened.
As per the an article in Economics Times dated 29.4.2014 more than 28lakhs Central & State Government Employees who joined service on or after Ist January 2004 have compulsorily invested in the NPS.  Their retirement savings account for 93% of total NPS corpus roughly 45000 crores.  This huge saving has not been invested right from the 2004-2009 as because the promoters have been appointed only in the year 2009-10 leading to this corpus lying idle. 
As per this article the following has been performance of these NPS funds which was obviously the worst ever performance by such funds.
Year Central Govt. Workers State Govt. Workers
2010-11 6.91% 7.91%
2011-12 7.28% 8.04%
2012-13 11.24% 11.82%
2013-14 5.37% 4.95%
Since launch 7.55% 7.87%

It has also been learnt that some subscribers have already retired or died and they have been granted statutory benefit under CCS(Pension)Rules 1965 because of the fact that wealth accrued in their account is quite insufficient.
The NPS has created a class within the class among Central/State Government employees which is discriminatory and therefore, impermissible.  It is violative of the dictum pronounced by the Supreme Court in their landmark decision in Nakra vs. Union of India, as such this NPS deserves to be rescinded.
In the considered opinion of the Pensioners fraternity the NPS must be scapped and all those who are now covered by NPS should be brought back to be covered by statutory pension scheme.
VI_-CPC had asked the Centre for Economic Studies and Policies, Institute for Social & Ecnomic Change, Bangalore to conduct a study and to suggest various options by which the pension liability can be contained in future and device suitable and self-sustaining models for financing the pension of the Central Govt. Employees, the final objective being that the funds are so devised as are able to meet substantially the entire pension liability of the Government.  In other words Government wanted complete privatisation of pension by covering all Central Government employees including Defence personnel under suitable schemes on the pattern of NPS.  The concluding recommendation of the above study is as under:
“Mainly given the fact that the future liability for pension although may be large in terms of absolute size is not likely to last very long and does not constitute an alarmingly big share of GDP which is also on decline.  It appears that pursuing the existing  PAY AS YOU GO to meet the liability would be an ideal  solution”.
The PAY AS YOU GO system i.e. statutory pension is therefore also an ideal solution for those who have now been covered under NPS.
The Supreme Court has held that the right of a civil servant to receive pension is a property within the meaning of article 31(1) and articles 19(1)(g) of the Constitution of India.  Therefore, any order/scheme which denies the civil servant the right to receive the pension affects his fundamental rights.  In the light of the  above ruling the NPS is ultra-virus and has to be scrapped.
Question No. 10.2:  As far as pre 1.1.2004 appointee are concerned, what should be the structure of pension and other retirement benefits?

a) The Scheme of one rank one pension in respect of defence personnel i.e. persons retired from same rank, same seniority and equal length of service should get equal pension irrespective of date of their retirement, having been ensured in respect of Defence Personnel (Army, Navy, Air force) , the principle of full parity in pension of civilians which had been enunciated by the V-CPC and implemented upto 4th CPC has to be ensured by the VII-CPC.
b) In order that pension is adequate, the minimum pension should 65% of minimum pay and not 50% thereof.
c) Supreme Court had ruled that pension should be adequate to enable pensioners to live: free from want, with decency, independence and self-respect; and at a standard equivalent at the pre-retirement level.  Therefore, the pension should be 65% of basis pay + DA last drawn.
d) Dearness Relief @ 100 neutralisation of increase in cost of living with its automatic merger whenever it cross 50% mark.
e) Additional Pension.  Recognising that with advancing age anyone is gradually crippled and becomes more susceptible to decease etc.  Therefore, after superannuation on attaining the age of 60 years the pension should be enhanced after each five years as under:

65 years               @ 10% of the basic pension

70 7ears               @ 20% -do-

75 years               @ 30% -do-

80 years               @ 50% -do-

85 Years               @ 70 % -do

90 years               @ 100% -do

f) Pension should be net of Income Tax.
g) Restoration of commuted value of pension should be after 12 years and not  after 15 years applicable to commutation as per old Tables existing upto 2008.
h) Full pension after 20 years of service has to be extended also to the Pensioners who retired before 1.1.2006.
i) Grievance procedure should be on the lines as under:
a) Resolution of Pensioners Grievances should be ensured within a specified time frame.
b) SCOVA be upgraded to JCM level
c) Benefits of judicial decisions should be extended to all similarly  circumstanced pensioners
J)   Medical Facilities:
The following land mark judgements of the Supreme Court have held that the enjoyment of highest attainable standard of health is recognised as a fundamental rightsof all workers/pensioners in terms of aAticles 21 read with Articles 39,41,43 and 48 of the constitution.
a) Consumer education and Reserch Centre and others vs. Union of India (AIR 1995 Supreme Court 922)
b) Laxman Thammappa Kotgiri Vs. General Manager, Central Railway & Ors (2005 (1) SCALE.
c) Indian Medical Council vs. VP Shantha & ors. 1995 (6) SCC651.
A. Therefore, smart card may be issued to all pensioners of all Departments and their dependents to avail cash less, hussle free health care both indoor as well as outdoor across the country in-
a) All Govt. Hospitals and Dispensaries,
b)  All NABH accredited multi super speciality Hospitals which has been allotted land on concessional rates  or given any otheraid/ concession by Govt.
c) And All CGHS, RELHS and ECHS empanelled Hospitals.
A. All Pensioners irrespective of pre-retrial class or status be treated equally in all matters like ward entitlements etc.
B. Fixed Medical allowance should 2500 p.m. plus dearness relief thereon.
C. Hospital Regulatory Authority may be set up to bring all NABH hospitals or diagonistic centres under its constant monitoring of quality, rates etc. CGHS rates may also be revisd as per market trend.
D. Extension of CSMA Rules 1944 to pensioners residing outside CGHS area.
E. Extension of minimum pension to EPS 95 pensioners, SRPF/CPF pensioners.
F. Revise pension from 1.1.2014 and thereafter every 5 years.
G. Gratuity should be based on total length of service @ one month emoluments for every completed service year/part thereof.
H. Family pension should be at the rate of 50% of the pay + DA last drawn.

Camp: 13-C, Ferozshah Road, New Delhi 110 001.
Phone: 9868244035
Dated: 10th May, 2014.

Ms. Meena Agarwal,
7th Central Pay Commission,
Post Box No.4599
Hauz Khas PO
New Delhi.


Please find enclosed herewith the reply to the questionnaire item No. 10 relating to Pension.  This is for kind consideration of the Commission.

Thanking you

Yours faithfully,
(S.K. Vyas)
Secretary General

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