Anomaly in Pension Fixation as per Recommendations of 7th Pay Commission

Anomaly in Pension Fixation as per Recommendations of 7th Pay Commission

One of our regular reader Mr.Visvesvara M K has expressed his views about the calculation of pension for pre-20016 pensioners as per the 7th Pay Commission.

There is an anomaly in pension fixation of pre-2016 pensioners as per 7th CPC recommendations. The 7th CPC has offered two options.

Option I:
Pension calculated by multiplying pension fixed by VI CPC by a multiplying factor of 2.57.

Option II:
Notional pay to be determined by multiplying entry pay under appropriate e Grad Pay and Level taking into consideration number of increments earned in the pay scale from which one retires. 50 % of this notional pay is the pension w.e.f. 1-1-2016.
Whichever pension of Option I and Option II is higher is the pension.

ANOMALY:
If one gets a promotion to higher post in which he serves for less than one year there is no increment earned. 50% of this notional pay as per Pay Matrix of the VII CPC will be pension w.e.f. 1-1-2016 and this pension under Option II is always and always lower than the Pension under OPTION I. Thus, there is no choice for him.

SOLUTION:
It is common to observe that most of the pensioners retired on superannuation after serving in a higher post on promotion will be retiring within a year or so and the increments earned by them in that pay scale is nil or meager compared to the increments earned in the immediate lower pay scale from which he was promoted and this fact seems to have been given a goby. Pensioner who does not earn any increments in the pay scale on promotion which may be only an extension of the lower pay scale should have his increments earned in the lower pay scale counted for calculation of the notional pay which is a part and parcel of the pay scale to which he is promoted.

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Mr.G R Murthy says…
Mr.Visheswara has pointed out that retirees usually serve for least no of years in promotion scale and no of increments earned are few compared to the increments earned in the prev. scale.I presume that the no of increments is calculated as the diff of pay drawn at the time of retirement and the minimum of the pay in that pay scale When a person gets promotion to a higher post his pay in the promoted pay scale is fixed higher at least by two increments so there is no danger of getting less pension than ones juniors. I think the pension varies with the retirement regime of pay commissions for the same number of years of service in the same grade Am I right in thinking so?

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Mr.KHALED says…
Under the above situation the govt. should review the recommend as follow to avoid disparity/ anomaly & injustice to the retiries who have majour contribution in building the nation.
the retiree who has been promoted to the higher grade and if it involves two different Levels and did not get increments in higher promoted Level , while fixing the pension to avoid loss to such a retiree in pension formulation 1 of the recommendation of VII CPC the increments earned in the Lower level should be taken into consideration the figure so arrived in Lower Level should be matched to the figure in the Higher Promoted Level and calculate the number of increments earned in the retired Level and accordingly fix the pension. This is the only sound and simple method to get the benefit of OROP.

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JK RAGHUNATHAN says…

ANOMALY in Fixation of Pension as per Formulation 1 recommended in para 10.1.67, sub para (i) of 7th CPC Report :—-

The Solutions suggested by 3 Readers are appropriate and best ones.

The Number of increments Earned either in the Retiring Pay Scale or in the Immediate Lower Pay Scale should be Determined based on the LAST PAY Drawn in that Pay Scale and the Number of STAGES from the Minimum of the Pay Scale (Starting Pay) UPTO the LAST PAY Drawn in the Pay scale.

The Number of STAGES from the STARTING PAY (Minimum of the Pay Scale) UPTO the LAST PAY Drawn in the Pay Scale determines the Number of Increments Earned (gained) in that particular Pay Scale and NOT the ACTUAL Number of Increments physically Earned.

ILLUSTRATION :–

Pensioner A retired at LAST PAY Drawn of Rs,11000/- in the Pay Scale of
Rs.7500-250-12000. Initially, his Pay was Fixed at Rs,9000 in this Scale and he ACTUALLY (physically) Earned 8 Increments at the rate of Rs.250 and Retired at the Pay of Rs.11000/- .

For the purpose of arriving at the Notional Pay, the Number of Increments Actually (physically) Earned ( 8 in this case) should NOT be considered..
The Number Of STAGES from the Starting Pay (Rs.7500) UPTO the LAST PAY Drawn (Rs.11000) in this Pay Scale is 14 which is to be treated as the Number of Increments Earned ( 14 ) in the Pay Scale for the purpose of arriving at the Notional Pay.

By Virtue of total Qualifying Service to attain the Highest Pay is the main criteria to be kept in mind.

My Humble Suggestion as brought out above may please be considered.

In Continuation of my Comments given at 6.46 pm on 01 JAN 2016 ,

In this connection, Illustration on Fixation of Revised Pension in Case 2 of Para 10.1.71 (page 396 ) of 7th CPC Report is RELEVANT. It is mentioned that Pensioner retired at LAST PAY Drawn of Rs.4000 on 31 JAN 1989 under 4th CPC Regime having drawn 9 Increments in the Pay Scale of Rs.3000-100-3500-125-4500.. How can he draw 9 Increments in the said Pay scale under 4th CPC Regime when he has retired on 31 JAN 1989.. He has served only 3 Years and 1 month in this Pay Scale and hence he can draw only Maximum 3 Increments in that Pay Scale, (from 01 JAN 1986 to 31 JAN 1989)

It is therefore EVIDENT that 9 Increments said to have been drawn in the retiring Pay Scale viz., Rs.3000-100-3500-125-4500 is based on the NUMBER OF STAGES FROM THE STARTING PAY ( Rs.3000) UPTO THE LAST PAY DRAWN (Rs.4000) IN THIS PAY SCALE, WHICH IS 9 (NINE). 

From Rs.3000 to Rs.3500, the Number of STAGES is 5 (Five) and from Rs.3500 to Rs.4000 , It is 4 (Four) and the TOTAL NUMBER OF STAGES UPTO THE LAST PAY DRAWN IS 9 ( 5 +4 = 9).

Thus, it is EVIDENT that the NUMBER OF STAGES FROM THE STARTING PAY ( MINIMUM PAY OF THE PAY SCALE ) UPTO THE LAST PAY DRAWN IN THE PAY SCALE DETERMINES THE NUMBER OF INCREMENTS EARNED (GAINED) IN THE PAY SCALE for the purpose of Calculation of NOTIONAL PAY.