Importance of Option 1 of 7th Pay Commission for Revised Pension

Reconstitution of Standing Committee of Voluntary Agencies (SCOVA) will be of 2 years - DOP&PW

RSCWS explains the advantages of 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 pension with MF of
2.57

  

Pension for
L 11 as per matrix table

  

Reduction in pension with denial of Option 1 (col 5-4)

  

 

Revsd pension with 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