4th Pay Commission’s View on Pension Structure:
It was for the first time that the pension structure for pensionersboth past and future, had been entrusted for examination to the Fourth Central Pay Commission. Commission examined the case of past pensioners and observed that law of the land had been declared in Nakara’s case that pensioners formed one class by themselves and this class was not divisible for purpose of entitlement and payment of pension to those who retire ‘before’ and those who retire ‘after’ a certain date arbitrarily fixed for the purpose. Commission further stated that this being the law, it is a factor to reckon that any changed formula for computation of pension will work back all pensioners who retired earlier also.
Measures taken by 5th Pay Commission:
As a follow-up of the basic objective of parity 5th Central Pay Commission recommended the pension of all the pre-1986 retirees to be updated by notional fixation of their pay as on 1-1-1986 by adopting the same formula as for the serving employees. Pay Commission termed it as ‘Complete Parity’. Thereafter all the pensioners who were brought on the Fourth CPC pay scales by notional fixation of their pay and those who retired after 1-1-1986 were treated alike in the consolidation of their pensions on 1-1-1996 by allowing the same fitment weightage as for the serving employees. Pay Commission termed it as ‘Modified Parity’.
5th Central Pay Commission then enunciated a principle for the future revision of pensions to the effect that complete parity should normally be conceded up to the date of last pay revision and modified parity (with pension equated at least to the minimum of the revised pay scale) be accepted at the time of each pay revision. The 5th CPC hoped that the enunciation of principle would imply that the time of next pay revision say, in the year 2006, complete parity should be given to past pensioners as between pre-1996 and post-1996and modified parity be given to pre-2006 and post-2006 pensioners.
Pension Structure after 6CPC:
Sixth Central Pay Commission stated that in order to maintain the existing modified parity between present and future retirees, it will be necessary to allow the same fitment benefit as is being recommended for the existing Government employees. In contradiction to their own statement; in violation of the law laid down by the Apex Court and ignoring the principles enunciated by theCPC the Sixth CPC allowed different fitment formula for the past and future pensioners.
Sixth Central Pay Commission thus disturbed the concept of parity between past and future pensioners. It defied completely the law laid down by the Apex Court regarding complete parity among pensioners. It also ignored the principles enunciated by 5th CPC for future revisions of pensions maintaining complete parity. It distributed roses of different colours viz: red, pink, white and yellow to different segments of the Pensioners which resulted in the creation of classes within the class. In this classification the past pensioners were given a fitment formula which can be called a Black Rose (Kala Gulab).
What Law of the land says:
Concept of parity among the pensioners is based on the various Judgments of the Honourable Supreme Court. In the India Ex-Services League and Ors 1991(2) SCC 104 Justice Verma interpreted the scope of Judgment in the D.S. Nakara case as detailed below:
“It was clearly stated that if the pensioners form a class, their computation cannot be by different formula affording unequal treatment solely on the ground that some retired earlier and some retired later. This is to us the decision in the Nakra case and no more.”
In the case of V Kasturi vs. MD, SBI, Bombay & Anr 1998 (2) supp. SCR 269 (Judgement dated 9-10-1998) following Judgement was pronounced regarding past pensioners:
“If the person retiring is eligible for pension at the time of his retirement and if he survives till the time by subsequent amendment of the relevant pension scheme, he would become eligible to get enhanced pension or would become eligible to get more pension as per the new formula of computation of pension subsequently brought into force. He would be entitled to get the benefit of the amended pension provision from the date of such order as he would be a member of the very same class of pensioners when the additional benefit is being conferred on all of them. In such a situation the additional benefit available to the same class of pensioners cannot be denied to him on the ground that he had retired prior to the date on which the aforesaid additional benefit was conferred on all the members of the same class of pensioners who had survived by the time the scheme granting additional benefit to these pensioners came into force. The line of decisions tracing their roots to the ratio of Nakara’s case (supra) would cover this category of cases.”
Pensioner’s Case in the background of Merger of Posts by 6CPC :
Sixth Pay Commission recommended different rates of fitment benefits in case of pay and pensions. In case of pensions 40% increase on basic pension being actually drawn has been allowed and in case of pay, benefit of grade pay has been allowed to the employees as 40% of the maximum of the old higher pay scale bracketed in the same pay band even though neither the rate of pay nor the scale was being drawn by the employees. Now 50% of grade pay will constitute as pension of future pensioners; which is higher than 40% in all cases of pensioners. Pay scales of Rs 5000-8000, Rs 5500-9000, Rs 6500-6900 and Rs 6500-10500, have been placed in the Pay Band -2 (9300-34800) with Grade Pay of Rs 4200/-. Grade pay of Rs 4200/- is the 40% of Rs 10500/- maximum of the pay scale of Rs 6500-10500/- This is neither, complete parity, nor modified parity, nor disparity but conscious discrimination.
Sixth pay Commission merged the existing pay scales and posts and then prescribed a pay band and grade pay for each scale / band. This has also caused injustice to certain pensioners who retired from these scales.
As an example the scales of pay of Rs 5000-8000, Rs 5500-9000 and Rs 6500-10500 have been merged. Excluding some post Pay Commission recommended merging posts in these scales also. Pay Commission recommended that in case it is not feasible to merge posts in these scales on functional basis, the posts in the scale of Rs 5000-8000 and Rs 5500-9000 should be merged, with the post in the scale of Rs 6500-10500 being upgraded to the next higher grade in the pay ban d PB-2 i.e. to the grade of pay of Rs 4600/corresponding to pre-revised pay scale of Rs 7450-11500, the post being upgraded from the scale of Rs 6500-10500 should be merged with the post in the scale of Rs 7450-11500.
In Department of Military Engineer Services under Ministry of Defence, V Central Pay Commission had restructured the Administrative Cadre. The post of Administrative Officer Gde II (AO II) (Rs 2000-3200) was restructured as AO II (Rs 2000-3500) and then was prescribed the Vth pay Commission scale of Rs 6500-10500.The post of Administrative Officer Gde I (AO-1) (Rs 2375-3500) was restructured as AO-1(Rs 2500-4000) in line with general pattern. And now Ministry of Defence has not merged the post of AO-II with the posts in the Scales of Rs 5000-8000 and Rs 5500-9000. Thus this post is upgraded to the scale of Rs 7450-11500. But the post of AO-1 is in the scale of Rs 2500-4000 and thus it has to be merged with the Post of AO-1 in the scale of Rs 7500-12000. But the benefit of this upgradation has not been passed on to the past pensioners. Pensioners in these scales and posts lose their identities in the jungle of pay scales pay bands and posts.
Radical Changes that affects Pre-2006 Pensioners:
Sixth Pay Commission introduced radical changes. Traditional pay scale culture has been replaced by Pay Bands, Grade Pay requiring new version of the posts and new recruitment rules. In such a situation it was essential to notionally fix the pay of pre-2006 retirees in the Pay Bands with grade pay. This would have been in consonance with the law laid down by the Apex Court and the principle enunciated by Vth Central Pay Commission. This towering anomaly needs to be solved.
Pre-1996 pensioners were due for complete parity. This has not been done. With the radical changes made in the pay structure now it is appropriate that all pre-2006 pensioners are given complete parity by fixing their pay in the new scales / bands notionally and then revising their pensions duly adding the grade pay.
And finally the Solution:
One RankOne Pension and One PostOne Pension is the rightful solution for ever. For its implementation pensioner’s identity with the posts shall have to be preserved. Till this is finalized, pre-2006 pensioners should be given complete parity by notionally fixing their pay in the New Pay Bands with grade pay and then fixing their pensions as in the case post-2006 pensioners. It shall also preserve identities of their posts, scales, pay bands and grade pay.
Mr. Onkar Singh Riar, a Defence Services Civilian Pensioner living in Jalandhar is the author of this article.