Revision of Pension of Pre 2006 Pensioners – Reg: Benefit of Upgraded/Merged Posts by 6th CPC for fixing of Minimum of Revised pension of Pre-2006 Pensioners

No.RSCWS/HO/CHD/ Memo/2018-5

Dated: 21/05/2018

Hon. Minister of Finance, Govt. of India,
North Block, New Delhi-110001

Subject: Revision of Pension of Pre 2006 Pensioners – Reg: Benefit of Upgraded/Merged Posts by 6th CPC for fixing of Minimum of Revised pension of Pre-2006 Pensioners

Reference:- i) Resolution of GOI No. 38/37/08-P&PW (A) dated 29-8-08 & OM Dated 1-9-08,
ii) Para 5 of DOP&PW O.M. F.No. 38/37/08-P&PW (A) dated 11-2-2009 – (which has been quashed by various Courts but not withdrawn by the DOP&PW)
iii) DOP&PW O.M. F.No. 38/37/08-P&PW (A) dated 30-7-2015

Dear Sir,
We seek your benign intervention in the following matter of serious injustice with a section of Pre-2006 Central Government Pensioners:

1. Sixth Pay Commission had Merged and upgraded some posts keeping in view their duties & responsibilities. The recommendations of the Sixth CPC were accepted by the Government vide Resolution of the Government Notified on 29-8-2008 and orders were issued thereon vide DOPT & DOPPW vide OMs dated 1-9-2008.

2. DOP&PW subsequently modified these orders vide O.M. File No. 38/37/08-P&PW (A) dated 11-2-2009 and ordered that the benefit of upgrading of posts by Sixth Pay Commission shall not be given for the fixation of Revised Pension of Pre-2006 Pensioners.

3. Above cited orders of DOP&PW (dated 11-2-2009) had been quashed by the various Courts including the Apex Court, which inter-alia directed that “The fixation (of Pension) … will be subject to the provision that the revised pension, in no case, shall be lower than 50% of the sum of the minimum of the pay in the pay band and the grade pay thereon corresponding to the pre-revised pay scale from which the pensioner had retired.” DOP&PW issued the orders thereon vide OM dated 1-9-2008.

4. DOP&PW vide OM No.38/37/08-P&PW(A) Dated 30th July, 2015, in compliance with the judicial pronouncements, had decided that the pension/family pension of all pre-2006 pensioners/family pensioners may be revised in accordance with this Department’s OM No.38/37/08-P&PW(A) dated 28.1.2013 with effect from 1.1.2006.

5. Para 5 of DOPPW OM dated 11-2-2009 had specifically been quashed by various Courts – including the High Court of New Delhi in WP(C) 3035/2016 dated 3-8-2016 in Ram Phal-vs-Union of India & Ors and CAT Bangalore in CP 237/2015 in OA 231/2013 (Parthasarthy-Vs-Union of India).

6. High Court of Kerala at Ernakulam had held as under in OP (CAT).No. 169 of 2015 (Z) in its judgment dated 18th January, 2016 UNION OF INDIA vs N.R.PURUSHOTHAMAN PILLAI:
“The resultant position that emerges from the pronouncement of the Central Administrative Tribunal as well as the different High Courts and the Apex Court is that, computation of pension in the matter of implementation of the 6th Pay Commission Report has to be at 50% of the pay scale with respect to the scale of pay applicable to the post in question and not to the corresponding scale of pay to the one at which the incumbent has retired.”

7. Regrettably the benefit of upgrading of posts was still not given to the Pre-2006 Pensioners in spite of the above cited judgments of various Courts. The benefit of the Court judgments on this had been restricted only to the Petitioners and not to other similarly placed Pre-2006 Pensioners.

8. This is totally discriminatory and violates Article 14 of the Constitution as well as under the settled law that the decisions taken in one specific case either by the Judiciary or the Govt. should be applied to all other similar cases without forcing the other employees or pensioners to approach the court of law for an identical remedy or relief.

9. Delhi High Court in W.P.(C) 8012/2013 had held that “policy decision of the Government in the OM dated September 01, 2008 to fix pension for all categories of pensioners did not classify post of pre January 01, 2006 retirees and all were entitled to pension as per a common formula”

10. It is, therefore, requested that Pre-2006 Pensioners be given the benefit of upgraded Pay Band and Grade Pay of the post from which they retired so that minimum pension be not lower than 50% of the pay in the revised pay band plus the grade pay corresponding to the post from which the pensioner retired – as per DOPPW OM dated 30-7-2015.

Yours faithfully,
(Harchandan Singh)
Secretary General, RSCWS

Source: www.rscws.com

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No. 3/4/2016-Estt.(Pay-II)
Government of India
Ministry of Personnel, Public Grievances & Pensions
Department of Personnel and Training

North Block,
New Delhi
Dated the 30th May, 2017

OFFICE MEMORANDUM

Subject: Revision of pay of the Chairpersons and Members of the Regulatory Authorities / Bodies consequent to the implementation of the 7th Central Pay Commission recommendations.

This Department had, vide OM No. 3/ 6/ 97-Estt.(Pay-II) dated 29th January 1998, issued guidelines regarding perquisites and some important terms and conditions for the Chairpersons and Members of the Regulatory Authorities and allied matters.

2. These guidelines were applicable to Chairpersons and Members of existing Regulatory Authorities also, appointed subsequent to the issue of these guidelines, unless there is a constitutional or statutory obligation to the contrary. As per the aforesaid guidelines, the Chairperson would be eligible for pay not exceeding Rs. 26,000/ – p.m. (fixed) and Members would be eligible for pay scale not exceeding Rs.22400-525-24500. The pay will be fixed in accordance with the prevailing orders, i.e. pay minus pension.

3. After implementation of the Sixth Pay Commission, in order to attract expertise available outside the Government, the full time Members of TRAI, CERC, IRDA, SEBI and CCI were granted consolidated pay packages vide orders of Ministry of Finance, Department of Expenditure. Replacement scales of Rs.80,000/- p.m. and Rs.37400-67000 (PB-4) with Grade Pay of Rs. 12000/- (since replaced with HAG scale of Rs.67000-79000) were granted respectively to Chairpersons and Members of all other Regulatory Authorities / Bodies.

4. The 7th CPC has looked into the emoluments structure, including pay, allowances and other facilities/benefits, in cash or kind of the members of Regulatory Bodies (excluding the Reserve Bank of India) set up under Acts of Parliament, and have given their recommendations in Chapter-13 of their Report. As per recommendations of the 7th CPC, as accepted by Government of India, and also as intimated by Department of Expenditure vide OM No. 394959/ E.IIIA/ 2017 dated 211d March 2017, the pay and allowances of Chairperson and fulltime Members of Telecom Regulatory Authority of India (TRAI), Insurance Regulatory and Development Authority (IRDA), Central Electricity Regulatory Commission (CERC), Securities and Exchange Board of India (SEBI), Competition Commission of India (CCI), Pension Fund Regulatory and Development Authority (PFRDA), Petroleum and Natural Gas Regulatory Board (PNGRB), Warehousing Development and Regulatory Authority (WDRA), Airports Economic Regulatory Authority of India (AERAI), Railway Development Authority (RDA) and Insolvency & Bankruptcy Board of India (IBBI) which have been de-linked from Government salaries will be governed by the orders issued by the Department of Expenditure.

5. In respect of existing Members of remaining Regulatory Bodies set up under the Acts of Parliament, the 7th CPC has recommended normal replacement pay. This has also been accepted by the Government of India vide Resolution No.1-2/ 2016-IC dated 25th July, 2016. Accordingly, the existing Chairpersons as well as future appointees would be eligible for basic pay not exceeding Rs. 2,25,000/- (Level 17 of Pay Matrix) in revised pay structure and the existing Members as well as future appointees would be eligible for basic pay not exceeding Level 15 of Pay Matrix in the revised pay structure.

6. Existing instructions provide that Chairperson and Member(s) who on the date of his / her appointment to the Regulatory Authority/ Statutory Body/ Tribunal was in the service of the Central/ State Government shall be deemed to have retired from such service with effect from the date of his / her respective appointment as such Chairperson/ Member. In case such officers are in receipt of pension, the same shall be deducted in accordance with the prevailing orders applicable to the reemployed pensioners.

7. The rates of all allowances shall be as admissible to Government employees of corresponding Level from time to time.

8. These orders shall take effect from 01.01.2016.

(A.K. Jain)
Deputy Secretary to the Government of India

To All Ministries/Department (As per standard list attached)

Source: http://dopt.gov.in

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The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee.

The panel headed by Finance Secretary Ashok Lavasa to review Seventh Pay Commission allowances is expected to soon submit its report to the government. Shiv Gopal Mishra, the convenor of National Joint Council of Action (NJCA), a joint body of unions representing central government employees, said talks in this matter are in the final leg. The employee union body will be meeting the panel members today on the issue of Housing Rent Allowance or HRA related to Seventh Pay Commission.

The government had in June accepted the recommendation of Justice AK Mathur-headed Seventh Pay Commission in respect of the hike in basic pay and pension but its suggestions relating to allowances were referred to the committee. The Seventh Pay Commission had examined a total of 196 existing allowances and, by way of rationalisation, recommended abolition of 51 allowances and subsuming of 37 allowances.

The committee on allowances was initially given a time of four months to submit its report to the finance minister. Till a final decision is taken, all existing allowances are being paid at the Sixth Pay Commission rates.
The Seventh Pay Commission had recommended that HRA be paid at the rate of 24 per cent, 16 per cent and 8 per cent of the new Basic Pay, depending on type of cities.

The Seventh Pay Commission had also recommended that the rate of HRA be revised to 27 per cent, 18 per cent and 9 per cent respectively when DA crosses 50 per cent, and further revised to 30 per cent, 20 per cent and 10 per cent when DA crosses 100 per cent.

Typically, in case of housing allowance, arrears are not paid.

Allowances form a significant chunk of government employees’ salary. Some analysts had earlier said that implementation of the housing allowance portion of the Seventh Pay Commission as well as GST or Goods and Services Tax could push up average inflation.

“At worst, if the government is under pressure, this allowance can be pushed to the next year, as was done in the previous pay commissions. The housing allowance does not attract arrears,” HSBC Securities had said in an earlier report.

The Cabinet had also decided to constitute two separate committees to suggest measures for streamlining the implementation of National Pension System (NPS) and to look into anomalies likely to arise out of implementation of the Commission’s Report.

Source: NDTV

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By Dhirendra Kumar CEO, Value Research

Eight years ago, I wrote a newspaper column advising government employees (or should I say public servants) on what to do with the arrears that they would get with the implementation of the sixth pay commission.

On the face of it, one could just repeat that advice now. However, the situation then was very different. One, the acceptance of that pay commission report came with a huge delay of 30 months, leading to large accumulated arrears. Most employees got eight months to a year’s extra salary as arrears. Two, that was the height of the global financial crisis. Many people were exhorting government employees to go forth and spend their bonanza to boost the economy, which was clearly not a wise thing to do from the individual’s point of view.

The 30-month delay meant that many were receiving an amount that would otherwise have taken them seven to ten years to save and it was important to point out that the best course would be to take this forced saving and convert it into a long-term investment. This time around, things are different. The government has acted much faster and the arrears are just six months. A smaller hike and a much shorter delay mean that most government employees will get an amount equivalent to barely one month’s extra salary so there isn’t any great excitement about extra savings.

In any case, government employees’ savings imperatives are very different from those who don’t have lifelong infla tion-adjusted pensions that also keep getting hiked by pay commissions. Realistically, government employees’ salaries and pensions are now so good that someone who does not save at all for retirement will also get by fine. This is especially true because free lifelong healthcare is part of the package.

A long retirement with inflation-ravaged savings does not bother government employees because their burden will also be carried by the rest of us. The rest of the country will work hard and pay their taxes so that government employees are guaranteed a comfortable income and pension. Little wonder that even the most menial, lowest-level government jobs attract thousands of highly qualified applicants.

However, this is true only of the older generation of government employees, that is, those who joined before 2004.The biggest change that has come about since 2004 is that a large proportion of government employees are on the National Pension System. Younger employees have retirement savings enforced instead of having pensions guaranteed from the public purse.While the final impact on their post-retirement finances is hard to predict at this juncture, it does mean that they will have to learn a little more about savings and investments than the older generation of government employees had to.

The little bit of arrears don’t amount to much, but the higher income should be directed to long-term savings instead of any kind of consumption expenditure. The theory behind the Pay Commission is that its awards are a response, not just to the rising cost of living, but also to the general rise in private sector’s salaries and an attempt to narrow the gap thus created. I can hear the sniggers from private sector employees but like I said, that’s the theory. In this sense, arrears are money that is already spent. Given the way most people’s finances are structured nowadays, I think the first priority should be to lighten or eliminate any debt load that one has.

Beyond debt-reduction, the arrears, as well as the higher income is best added to whatever savings medium the saver is most comfortable with as long as one doesn’t make the mistake of relying on fixed income savings for the long term.

For those who want to invest for the long-term (at least five to seven years), the best course of action could be to shift this money gradually to a good balanced fund. As the past has decisively shown, despite higher volatility, equitybacked investments have long-term returns that are far superior to any other kind of asset. A type of mutual fund that gets you most of the gains of equity while saving you from some of the volatility is probably the best choice.

Source : http://economictimes.indiatimes.com/

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After coming to power for the second time, the Mamata Banerjee led government on Friday announced a grant of interim relief to state government employees amounting to 10 percent of their band pay.

“In our first cabinet meeting, we have decided to provide a grant of interim relief to state government employees amounting to ten percent of the band pay drawn by them,” said state Finance Minister Amit Mitra.

“This will be effective from July and will cover state employees, teachers, local government employees and pensioners,” he said.

“The interim relief is small in nature but the net impact to the state exchequer will be around Rs.3,000 crore,” said Banerjee.

The difference in dearness allowance for state employees compared to their central counterparts stands at 50 percent.

Banerjee had announced a 10 percent hike in dearness allowance for the state employees from January reducing the difference to 44 percent. Later in March, the centre hiked the allowance by another six percent.

The government in its first stint had announced the Sixth Pay Commission to review the pay structure of state government employees.

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As we brace for another series of Pay Commission-mandated salary hikes, the question is if it is the best use of government resources.

As public servants get ready to enjoy the New Year’s blessing that the Seventh Pay Commission is expected to bestow, it may be a time for the rest of us to look this gift horse in the mouth. The Fourteenth Finance Commission estimates the cost of the Sixth Pay Commission at over Rs. 90,000 crore annually, since pay and allowances of Union government employees more than doubled between 2007-08 and 2011-12.Compare this to the estimates in the economic survey for the year 2011-12, about Rs. 70,000 crore each for food subsidy, fertilizer and petroleum subsidy and less than Rs. 40,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act. Simply put, the additional Central government expenditure due to the implementation of the Sixth Pay Commission was over 40 per cent of the major subsidies. If we take into account the costs to the State governments, the tab for Sixth Pay Commission largesse is probably equivalent to all the subsidies provided by the Central government.

As we brace for another Pay Commission-mandated salary hike, the
question to ask is not whether the government can afford it but if it is the best use of government resources. Government employees receive Dearness Allowance (DA) annually to compensate for inflation; they also receive an annual performance appraisal for promotions, which brings with it salary increases. So the decadal salary increases under the Central Pay Commission (CPC) are meant to address inequities in salaries across different parts of the government, across ranks as well as between the public sector and private sector. It is the latter that has provided the greatest justification for salary increases granted under CPC in the past.

False premiseDizzying salary packages reported for new Indian Institute of Management graduates or Indian Institute of Technology graduates funnel a sense of discontent among public sector employees since it is hard to imagine any 25-year-old government servant receiving a package of Rs. 40 lakh per annum. This smoke and mirrors strategy masks several observations made by the Sixth Pay Commission. First, it noted that the contention of vast disparities between private sector and government employees was not borne out by data. The CPC found that compensation to Group C and D employees in government was higher than that in the private sector; for
Group B it was similar and only for Group A was it lower. Group A
employees form less than 5 per cent of the total Central government
workforce; Group C and D are about 90 per cent. Second, it noted that a government job offers many other benefits not available in the private sector and the fear of flight away from public service towards the private sector is overblown.

“The Fourteenth Finance Commission estimates the cost of the Sixth Pay Commission at over Rs. 90,000 crore annually.”

In spite of these observations, the ultimate recommendations of the
Sixth CPC led to substantial increases in the salary and allowance of
all public servants, first in the Central service and later on in State
governments. A comparison of incomes between private sector employees
and government employees using data from India Human Development Surveys (IHDS) of 2004-05 and 2011-12 is instructive in understanding the consequences of the last CPC. These surveys of over 40,000 households were jointly organised by the National Council of Applied Economic Research and the University of Maryland. The graphic shows monthly salaries for men aged 25-59 in 2011-12. Many women work part time as anganwadi workers and ASHA workers and hence are excluded from this comparison, but their inclusion will not change the fundamental results.

The results show that at every single level of education, government
workers are paid more than private sector workers and more importantly, the public service advantage has increased rather than decreased after the implementation of the Sixth Pay Commission recommendations. A driver in government service earns far more than one in private service, but so does an engineer. This comparison does not include the other benefits government service provides including PF contributions, housing benefits, health insurance and, frequently, admission of children to coveted Kendriya Vidyalayas.

One might say that the problem is not global but is concentrated in
highly skilled positions. Individuals who are highly skilled may be more likely to choose the private sector. Here only the Union Public Service Commission can tell us if the qualification of the entering cohort of the Indian Administrative Service officers is declining, but at a slightly lower stratospheric level, we see no such evidence. The IHDS shows that among college graduates with a first class degree, government service still seems to be preferred. In 2004-05, among the male college graduates employed in public service, 37 per cent had a first division; this proportion had increased to 39 per cent by 2011-12. This is not to say that skill upgradation is not taking place in the private sector, where the proportion of first class degree holders among graduates has increased from 28 per cent to 35 per cent, but these figures do not suggest that government services are suffering on an average; just that the more qualified individuals are seeking salaried work and moving away from farming and small businesses benefitting both government service and the private sector.

“One might say that the problem is not global but is concentrated in highly skilled positions.”

That salary increases will be bestowed by the Seventh CPC is a given.
Whether it will address the real challenge, lower wages for Group A
officers compared to the private sector, and recognise the public
service advantage for the rest of the employees remains questionable.
Let us hope that the Seventh CPC will address the challenge of
government salaries with a scalpel rather than an axe.

(Sonalde Desai is senior fellow at the National Council of Applied
Economic Research and Professor of Sociology at the University of
Maryland. Views are personal.)

Source: TheHindu

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7th Pay Commission likely to propose highest pay hike since 1947

New Delhi: The Seventh Pay Commission is likely to propose pay hike for central government employees, which will be highest since first pay commission’s proposal in 1947.

TST

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Seventh Central Pay Commission Chairman Justice Ashok Kumar Mathur (Right)

New Delhi: The Seventh Pay Commission is likely to suggest linking pay with productivity with a focus on technology, skills and incentives, a move aimed at raising the productivity of central government employees.

The panel is also likely to recommend that in future additional remuneration be linked to increase in productivity.

The Seventh Pay Commission is expected to submit its recommendations by December and the central government asked the pay panel to look in to the issue of raising productivity and improving the overall quality of central government services in the country.

The Sixth Pay Commission had also said that steps should lead to improvement in the existing delivery mechanism by more delegation and de-layering and an emphasis on achieving quantifiable and concrete end results. Emphasis is to be on outcome rather than processes.

Accordingly, the Sixth Pay Commissions had also made several recommendations to enhance productivity and improve administration but previous UPA government failed to implement it.

Now, the central government advised the Seventh Pay Commission to be designated as Pay with a clear mandate to recommend measures to improve productivity of an employee.

The central government also said productivity per employee can be raised through the application of technology in public service delivery and in public assets created.

“Raising the skills of employees through training and capacity building also has a positive impact on productivity. The use of appropriate technology and associated skill development require incentives for employees to raise their individual productivities,” a central government financial panel said.

“The Seventh Pay Commission’s first task, therefore, would be identifying the right mix of technology and skills for different categories of employees. The next step would be to design suitable financial incentives linked to measurable performance,” an officer of the financial panel said.

TST

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Seventh Pay Commission is ready with its recommendations and it will soon submit its report to Finance Ministry. The recommendations are to be implemented from January 1, 2016.

The Central Government employees must be curious to know what all are in the store for them in the seventh pay commission’s recommendations.

Seventh Pay Commission

• It was formed by previous UPA Government. The commission, headed by Justice A K Mathur was formed in February 2014.
• The other members of the commission are Vivek Rae, a retired IAS officer of 1978
• batch, and Rathin Roy, an economist. Meena Agarwal is  Secretary of the Commission.
• The  committee’s recommendations are scheduled to take effect from 1 January, 2016.
•  The government constitutes the Pay Commission almost every 10 years to revise the pay scale of its employees and often these are adopted by states after some modifications.
• Nearly 48 lakh central government employees and 55 lakh pensioners will be befitted by the pay commission.

 Salary Increment:

•  Reportedly, there could be a substantial increment in the current salary of the employees (around 30-40 per cent).
• It has been proposed that the salary of the Government employees should be increased every year on July 1.

Major Recommendations

• According to Dainik Bhaskar exclusive report, IPS, IAS and IRS rank officers’ pay band will be made equal. Currently IPS, IRS officers get less salary than IAS.
• It has been proposed that existing 32 pay-bands should be decreased to 13.
• For Pay band-1, the minimum salary will be 21, 200.
•  The Cabinet secretary will get minimum 2 lakh salary.
•  There could be an education allowance to employees whose offspring are in the school.
• In last pay commission (6th), the minimum basic salary was increased to Rs 6660 from Rs 2550.
•   Experts are having views that employees of lower rank will be benefited the most from the seventh pay commission.

   Financial Burden:

•  Seventh pay commission will definitely bring a toll on the exchequer.
• The reason being Government has to manage OROP’s expenditures too.
•  Experts say that Central government’s salary bill will rise by 9.56% to Rs 1,00,619 crore after Seventh pay commission will come into effect.
•  According to Mint report, as a result of the recommendations of the Sixth Pay Commission, pay and allowances of Union government employees became more than doubled between 2007-08 and 2011-1-from Rs.74,647 crore to Rs.166,792 crore.

   Past pay commissions and the minimum basic salary:

•  First pay commission came in year 1946 and the basic salary at that time was decided to be of Rs. 35.
•  Second pay commission came in year 1959 and basic salary was of Rs. 80.
•  In 1973, third pay commission came into effect which decided the basic salary of Rs. 185.
•  Fourth pay commission came in year 1986 which recommend basic salary of Rs. 750.
•  In year 1996, fifth pay commission came, recommending basic salary of Rs. 2550.
•  Sixth pay commission came into effect in year 2006. UPA Government at that time, fixed minimum basic salary of Rs. 6660.

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Seventh Pay Commission to offer realistic view on salaries and allowances

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