Mailing Address : B – 1/52, Sector – 11, Faridabad ...uiioa.com/documents/Revised...

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Mailing Address : B – 1/52, Sector – 11, Faridabad (Haryana) M.B. No. 09818935243

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To

Sri Pranab Mukherjee,

Hon’ble Minister for FINANCE,

The Government of India,

New Delhi.

Respected Sir,

Sub: Pension (upgradation) for the employees of Insurance Companies/

Corporation owned by Govt. of India.

We, the United Forum of Insurance Unions, constituted by the in-service

and retirees unions/associations actively working in LIC & G.I.C., most

respectfully submit, as follows:

1. The pension to the employees, retiring from the Life Insurance

Corporation of India and the General Insurance Corporation of India, along with

four subsidiaries, was the subject matter of demand by the employees with

these institutions. After a prolonged consideration of various aspects involved,

the Government of India published a notification and brought an Index Linked

Pension Scheme, as part of the service conditions of the employees. The benefit

of this pension scheme was made retrospectively effective from 1-1-1986

and for those who retired prior to 1-1-1986, an ex-gratia payment was made

applicable. This pension scheme was modeled on the pension scheme applicable

to the Central Government employees. In fact, a specific provision (56-

residuary provision) in the Pension Rules say that if, for any aspect, no

express provision is provided, then the rules applicable to pension scheme

for the Central Government employees will be made applicable.


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(Viz Central civil Service pension rules 1972 or central civil services

(commutation of pension rules 1981).

Sir, when the pension scheme was first introduced in the institution, which is a

State under Article 12 of the Constitution, it was based on the scheme

formulated by the Central Government. Though there were negotiations with

the Union and some broad aspects of the scheme were discussed and an

understanding was arrived at, the government retained its power to finalise the

scheme and to implement it. Thus, we submit that, there should not be any

difficulty for the Government of India to treat our request on par with that of the

Central Government employees, where the Pension Rules, do not specifically

provide for.

In the Pension Rules, when they were initially came into effect, the

increase/decrease in the cost of living was neutralized by payment of the

amount called dearness relief. This was exactly, in tune with the pattern of

index-linked dearness allowance, payable to the employees, in service. There

was no discrimination between the employees in service and those, who had

retired, in so far as this neutralization aspect was concerned. In fact, under the

Pension Rules, a retired employee was treated as an employee of the

Institution.

However, the principle of uniform neutralization on par, with the

employees in service, was not followed, with the subsequent revision of the

wages, made in relation to the employees, in service. From the year 1997

onwards, the neutralization of the dearness allowance, in respect of the

employees, was at 100% and prior to that, it was on a graded scale. Consequent

upon the amendment to the pay scales, the employees, who retired after 1997,

got 100% neutralization, even in relation to the dearness relief component,


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whereas the persons who retired earlier to it, continued to suffer from the graded

neutralization.

Sir, you will please appreciate that the pensioners will have to be treated

as a class by themselves and that, there cannot be any discriminatory treatment,

amongst them. Therefore a demand was made that, at least from the year 1997,

the dearness relief neutralization may be fixed at 100% for the pensioners and

that, this demand was accepted by the Management of the Life Insurance

Corporation of India and necessary recommendations were sent to your

Ministry. Unfortunately, till date, this recommendation has not been considered

by the Ministry.

That apart, with regard to the enhancement of the pension along with

the wage revision in the industry is a long felt need of the pensioners. Every

time revision of pay scale result different classes of Pensioners as mentioned

below:

(a) Those who retired between 01-01-1986 to 1992/93

(b) Those who retired between 01-08-1992 to 31-07-1997

(c) Those who retired between 01-08-1997 to 31-07-2002

(d) Those who retired between 01-08-2002 to 31-07-2007

............................and so on

This anomaly was brought to the notice of LIC’s

management which was appreciated by the corporation in its Board’s meeting

held on 24-11-2001 when it had passed a resolution to cure the difference which

had arisen till then and resolved to give benefits to those pensioners who retired

till 31-07-1997 by up gradation by giving weight age of 11.25% as in the case

of in-service Employees. But the board left the implementation of the same to

the Direction of the Central Govt. and the favorable decision is still pending.

The long silence of the Central Government, in this regard, compelled some of

the retired employees to approach the courts of law, seeking parity and justice.


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But, it is unfortunate that these elderly people who gave the best portion of their

lives, for the causes of the institutions which they served, is sought to be

ignored, on hyper technical. Grounds In this matter we would like to invite your

kind attention that the learned counsel appearing for Union of India, in Jaipur

High Court, submitted that the resolution dated 24-11-2001 is pending decision

before the Govt. of India but the LIC of India was otherwise free to take its own

decision. More important is Divisional Bench Jaipur High Court in its order

dated 21.01.11 said, “Union of India Choosing not to file appeal in the matter

can easily be considered as and approval of the Board’s resolution at 24.11.01.

The right of the pensioners to expect such a revision in the pension has

been accepted by various Pay Commissions and is being implemented in respect

of the Central Government employees. It may be noted that this demand is

different from the one-rank/one pension demand of the Armed Forces.

It is submitted that, a pension is held to be a deferred wage and that; it is

not one time payment. The wages, if it could be raised periodically, in relation

to the employees, in service, then, there is no reason as to why this deferred

wages should not be raised in tandem, with the revision of the wages, for the

employees, in service. It is submitted that, not adhering to these principles

would be arbitrary and also violative of the Fundamental Rights, under Articles

14, 16 and 21 of the Constitution of India.

Sir, please do not mistake us, when we quote the provisions of the

Constitution of India. We are not Court birds. Pensioners are elderly people and

many of pensioners are over seventy years and their ability to take the matter to

the streets, is very limited. All of us are law abiding citizens and we have every

hope that under your leadership, justice will be rendered to this section of the

Society.


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With the passage of time serious discrepancies have cropped up with

result even a lowest grade employee who now retired will get more pension

than Executive Director’s pension and other cadres also, who retired in 1993.

We are giving a sample analysis in the following chart to help you understand

our problem and Heart burning:

Comparative Basic Pension at Max. of Scale

(Before Commutation)

Cadre Date of Retirementsupto 31-10-93

In Rs.31-07-97

In Rs.31-07-2002

In Rs.31-07-2007

In Rs.After 01-08-

2007In Rs.

Assistant 1430 3210 5218 8450 10525H.G.A. 1730 3695 6138 9813 13145

A.A.O./A.O. 2130 4255 7008 11015 16320A.O./A.M. 2260 4715 7228 12135 17230

A.D.M./DY. MGR.

2525 4975 8125 12640 17230

D.M./MGR. 2675 5225 8575 14290 21430S.D.M./C.M. 2975 5725 9500 14665 23980Z.M./ D.G.M. 3275 6325 10600 16265 26805

E.D./G.M. 3500 7050 11800 18050 29925

WHEREAS, Central Govt. Pensioners and even State Govt. Pensioners

(in the States where Vth/VIth Pay Commission’s recommendation are

implemented) are getting Pension updation benefit regularly. Fourth Pay-

Commission (Effective from 01-01-1986) provided the benefit of updation of

pension and accordingly updation of Pre-1986 Pension was done from 31-12-

1972 i.e., a day before Third Pay-commission (effective from 01-01-1973) came

into existence.

If the relevant charts are produced here nearly 80 pages will have to be

added which, we feel is not necessary but we are putting below a sample chart

showing the pension updating of Central Govt. Employees at the corresponding


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stage of pension of Insurance Employees (mentioned above) on Pre 2006 and

post 2006 basis i.e., from 5th Pay – Commission to 6th Pay – Commission.

S.No. Basic Pension

(Pre-2006) In

Rs.

Revised consolidation

Pension (on 01-01-2006)

In Rs.1. 5218 117942. 6138 138733. 7008 158394. 7228 163375. 8125 183646. 8575 193817. 9500 21470 (Apx.)8. 10600 239569. 11800 26668

Beside the updation of Pension the Central Govt. have shown a mark of

respect to Elderly Pensioners who have reached an age of 80 Yrs., 90 Yrs. and

100 Yrs. by giving riders in terms of percentage increase in Pension upto 100%

extra (on surviving at 100 years age)

Sir, therefore for the Employees of Govt. owned Insurance Co’s

/Corporation taking care of the elders is not only the responsibility of one’s

children, but also that of the government. These elderly persons have

contributed so much to the growth of the institutions, which they have served

and consequently, the welfare of the country and therefore, their welfare has to

be taken care of, by the government.

The growth of the nationalised Insurance Sector is the proof of its

Excellent performance which proved that great visionaries of the Country like

Pt. Jawahar Lal Nehru, Sri C.D. Deshkukh and Smt. Indira Gandhi took

right decision as Govt. owned Insurance corporation/Co’s. are working

without any Budgetary support, investing crores of Rs. for National

Development in infrastructure and other vital sectors and paying back more than

1000 crore per year today. Therefore the fate of these elderly persons who


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contributed for this progress should not be consigned to the files, mired in

bureaucratic tangles. A dynamic, positive and a social approach is necessary, to

resolve this issue.

Sir, we know that, you are capable of doing that and hence this appeal.

Sir, we may also state that, in so far as the insurance institutions, which these

elderly persons have served, are concerned, we do not see any reluctance on

their (Insurance Companies) part, to respect the wishes of these elders. But,

they plead their helplessness, as necessary signal is not coming from the Central

Government.

Sir, we submit that, under your dynamic leadership, you should ensure

that these senior citizens are not made to run from pillar to post, for their

legitimate aspirations, to be fulfilled. More so, when the institutions which they

have served are willing to provide the relief.

The fear that, such a step would cause a ripple effect, in other industries, is an

apprehension, not based on facts.

Sir, we would like to submit two issues for the working Officers and

Employees in the Public sector Insurance Companies namely:

1. Another Option for Pension – The Employees who could not opt for

Pension earlier have been requesting for another option for Pension. In

case of Insurance Companies the number of such employees is very less –

about 10% in LIC and about 25% in Non Life Insurance Companies. The

cost is also not high as one of the Non Life Insurance Company Officers

Association has got the Actuarial calculation from the Company Actuary

itself and the amount to be provided is about Rs. 140 Crores for 4000 odd


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employees which can be spread over next five years. The copy of the

Actuarial Certificate is also enclosed herewith. Sir, when Government has

enacted a bill to ensure Pension to even un-organised sector, we are sure

with your intervention the Pension Scheme 95 may be extended to the

working Officers & Employees in the PSU Insurance sector. In fact there

is parity between the employees who have opted for Pension and who

could not opt, the Companies are contributing only 10% of the basic to

PF optees whereas the contribution towards Pension optees is around 35-

40% of their basic salary. We seek justice to these employees and their

families in this regard.

2. NPS to be effective from April 2010 - In case of Non Life Insurance

Companies Employees recruited between 2004 and 2010 have been

requesting to be covered under Pension Scheme 1995 as in case of most

of the employees as per their Appointment letter they were covered under

Pension Scheme 1995. Although the NPS was introduced in Government

in 2004 but it was not mandatory for PSU companies to follow. In fact

NPS in case of financial sector comprising of LIC and Banks have been

covered w.e.f. 1st April’2010 whereas in case of Non Life Insurance

companies although the Gazette has been issued in 2010 but

retrospectively again creating a parity among the financial sector.

Moreover, sir, the contributions for their NPS cannot be invested

retrospectively as the scheme itself was not finalized and Fund Managers

have been given licenses afterwards only.


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Mailing Address : B – 1/52, Sector – 11, Faridabad (Haryana)M.B. No. 09818935243

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Mailing Address : B – 1/52, Sector – 11, Faridabad (Haryana)M.B. No. 09818935243

Mailing Address : B – 1/52, Sector – 11, Faridabad ...uiioa.com/documents/Revised...

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