Pension- Harassment in Pension Delivery

Pension takes the form of provision of annuities for the senior population. Historically, old age pensions, guaranteed by a government to its employees emerged in France in 19th century,followed by its introduction in the United Kingdom in 1834 and in Germany in 1873.

The pension system eventually spread to many countries of Europe and North America in the first decade of 20th century. In India, pension for older population was first introduced in 1924, primarily for the government employees under the British colonial rule.

The Government Pension Package

Government pension is granted to a Government employee on his/her retirement from Government service on the basis of length of qualifying service rendered and amount of emoluments last drawn. In the case of appointment in the public service, government fixes an age limit. In certain cases, this age limit is relaxed. According to general recruitment rules, a person can enter into Government service from minimum eighteen years’ age provided that the person has requisite qualification for service.

A citizen enters into service at young age for serving the people and for the welfare of the country. He/She then spends the most valuable time of his/her life in the service and ultimately at age of 60 years retires from service because of old age. Being adjusted in routinized life profile, it is difficult for a public employee to adjust with the other occupations of the society after retirement. His/her capability of work gets reduced.

In most cases, he/she is no more in a position to pursue any other occupation. Besides, many government officials become handicapped or die because of this. His/her dependent family members face serious financial setback. There is acute necessity of social security for the handicapped alive retired Government employee or for the

dependents of the deceased employee.

At this backdrop, the government has introduced a ‘pension package’ that constitute of pension, gratuity, group insurance, provident fund and medical allowance for the retired government employees and their dependents. With this system the retired persons or their dependents do not have to depend on others for their survival.

Types of Pension

According to the existing laws, rules and regulations, public pension can be classified into different types according to the nature of conclusion of service.

Compensation Pension

When a government employee is given pension after abolition of permanent post held by him/her in the process of downsizing or abolishing of the government establishment where the post was positioned, it is called compensation pension.

A government employee can claim compensation pension for his/her past service. He/She is either appointed in new post or transferred to other establishments. The procedure in providing this pension involves preparation of a list of the officials losing their jobs at a minimum expenditure of the government. The important point in this case is that in abolishing the posts the income of the government has to be increased. Again in this process the income of the government has to be more than the amount of the compensation pension to be paid.

In this process, if an employee is discharged from a post after completion of service in terms of fixed service conditions, he/she cannot claim any pension. For loss of any special pay, pension or compensation allowance is not allowable.

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In the case of retrenchment of permanent employees, if notice, which is necessary, is issued giving a time period of less than 3 months, in that case proportional compensation is to be paid for the period falling short of 3 months. If an employee is re employed and intends to return the compensation, he/she can do so by intimating the issue to the authority. But a temporary employee cannot do so.

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Invalid Pension

If a government employee’s service concludes due to his/her physical or psychological invalidity he/she receives invalid pension. According to the Service Rules, if a public employee applies for invalid pension before attaining 60 years of age, the head of his/her office of employment will process the sanction for the pension on the basis of the medical certificate regarding invalidation of the employee.

The employee shall be required to submit application for invalid pension in prescribed form along with recommendations of concerned Medical Board and relevant documents. Medical certificate in prescribed is an essential requirement for invalid pension. The authority that will grant invalid pension to an employee shall send a brief statement under sealed cover to the health examining medical officer or to the Board mentioning therein the information as to types of treatment taken by the employee.

When an employee applies for invalid pension and produces doctor’s certificate, he/she will not be kept in service and no leave will be granted. Moreover, there is no scope for re-employment after invalid pension. In some cases invalid pension is not allowed. For example if an employee is discharged from service for other reasons, then he/she will not be given the pension despite providing medical certificate. If an employee becomes invalid because of bad habit and irregularity, he/she will not be entitled to the pension on invalid ground.

Superannuation Pension

When a government employee’s service compulsorily concludes due to his/her attaining certain age determined by law for retirement from government service he/she becomes entitled to superannuation pension. The retirement age of employee is 60 according to the rule.

Retiring Pension

According to the law of the country, the government may, if it considers necessary in the public interest to do so, retire a public employee from service at any time after he/she has completed 20years of service without assigning any reason.

But any other appointing authority is not authorized to exercise this power. If any sub-ordinate appointing authority desires that an employee employed by it should retire after 20 years of service, that authority shall propose to the concerned ministry to that effect.

Optional Pension

A government servant has unqualified right to opt to retire from service at any time after He/she has completed 25 years of service upon the only condition that she/he shall have to give a notice in writing to the appointing authority at least 90 days prior to thedate of his/her intended retirement.

In this case, the government is bound to accept the application and has no legal scope to refuse.But such option once exercised shall be final and shall not be permitted to be modified or withdrawn.

Family Pension

When pension is sanctioned to the family of a pensioner/employee on his/her death, it is called family pension. In the case of family pension, a government servant while remaining in service at any time afterwards may nominate one or more members of his/her family as successor for the whole or part of his/her family pension.

But in the absence of nomination and if the wife of the deceased pensioner or any member of the family is not available, his/her last controlling authority shall decide the successor for providing family pension and gratuity. However, it is mentioned that the rules for family pension are different for different members nominated.

Pension Benefits

Pension
The minimum eligibility period for receipt of pension is 10 years. A Central Government servant retiring in accordance with the Pension Rules is entitled to receive superannuation pension on completion of at least 10 years of qualifying service.

In the case of Family Pension the widow is eligible to receive pension on death of her spouse after completion of one year of continuous service or before even completion of one year if the Government servant had been examined by the appropriate Medical Authority and declared fit for Government service.

W.e.f 1.1.2006, Pension is calculated with reference to average emoluments namely, the average of the basic pay drawn during the last 10 months of the service or last basic pay drawn whichever is beneficial. Full pension with 10/20 years of qualifying service is 50% of the average emoluments or last basic pay drawn whichever is beneficial. Before 1.1.2006, for qualifying service of less than 33 years, amount of pension was proportionate to the actual qualifying service broken into completed half-year periods. For example, if total qualifying service is 30 years and 4 months (i.e. 61 half-year periods), pension will be calculated as under:-

Pension amount = R/2(X)61/66

where R represents average reckonable emoluments for last 10 months of qualifying service or the last pay drawn as opted by the govt servant.

Minimum pension presently is Rs. 3500 per month. Maximum limit on pension is 50% of the highest pay in the Government of India (presently Rs. 45,000) per month. Pension is payable up to and including the date of death.

Commutation of Pension 
A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment with effect from 1.1.1996. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after expiry of one year, he/she will have to under go medical examination by the specified competent authority.

Lump sum payable is calculated with reference to the Commutation Table constructed on an actuarial basis.  The monthly pension will stand reduced by the portion commuted and the commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of pension. Dearness Relief, however, will continue to be calculated on the basis of the original pension (i.e. without reduction of commuted portion).

The formula for arriving for commuted value of Pension (CVP) is
CVP = 40 % (X) Commutation factor* (X)12

* The commutation factor will be with reference to age next birthday on the date on which commutation becomes absolute as per the New Table as Annexure to this Deptt’s O.M. No. 38/37/08- P&PW(A) dated 2.9.2008

Death/Retirement Gratuity

Retirement Gratuity
This is payable to the retiring Government servant. A minimum of 5 years qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a month’s Basic Pay plus Dearness Allowance drawn before retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable is 16½ times the Basic Pay, subject to a maximum of Rs. 10 lakhs.

Death Gratuity
This is a one-time lump sum benefit payable to the widow/widower or the nominee of a permanent or a quasi-permanent or a temporary Government servant, including CPF beneficiaries, dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee. Entitlement of death gratuity is regulated as under:

Qualifying Service	Rate
Less than one year	2 times of basic pay
One year or more but less than 5 years	6 times of basic pay
5 years or more but less than 20 years	12 times of basic pay
20 years of more	Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments.

Maximum amount of Death Gratuity admissible is Rs. 10 lakhs w.e.f. 1.1.2006

Service Gratuity
A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half month’s basic pay last drawn for each completed 6 monthly period of qualifying service. There is no minimum or maximum monetary limit on the quantum. This one time lump sum payment is distinct from and is paid over and above the retirement gratuity.

General Provident Fund and Incentives
As per General Provident Fund (Central Services) Rules, 1960, all temporary Government servants after a continuous service of one year, all re-employed pensioners (Other than those eligible for admission to the Contributory Provident Fund) and all permanent Government servants are eligible to subscribe to the Fund.

A subscriber, at the time of joining the fund is required to make a nomination, in the prescribed form, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death, before that amount has become payable or having become payable has not been paid.

A subscriber shall subscribe monthly to the Fund except during the period when he is under suspension.

Subscriptions to the Provident Fund are stopped 3 months prior to the date of superannuation. Rates of subscription shall not be less than 6% of subscriber’s emoluments and not more than his total emoluments. Rate of interest on GPF accumulations with effect from 1.4.2009 is 8% compounded annually and the rate of interest will vary according to notifications of the Government. The Rules provide for drawal of advances/ withdrawals from the Fund for specific purposes.

Deposit Linked Insurance Revised SchemeUnder the GPF Rules, on the death of subscriber, the person entitled to receive the amount standing to the credit of the subscriber shall be paid an additional amount equal to the average balance in the account during the 3 years immediately preceding the death of the subscriber subject to certain conditions provided in the relevant Rule. The additional amount payable under that Rule shall not exceed Rs. 60,000/-. To get this benefit, the subscriber should have put in at least 5 years service at the time of his/her death.

Leave Encashment
Encashment of leave is a benefit granted under the CCS (Leave) Rules and not a pensionary benefit. Encashment of Earned Leave/Half Pay Leave standing at the credit of the retiring Government servant is admissible on the date of retirement subject to a maximum of 300 days. There is no provision under the Rule for payment of interest on delayed payment of Leave Encashment.

Central Government Employees Group Insurance Scheme
A portion of monthly contributions paid while in service is credited in a Saving Fund, on which interest accrues. A Government servant while entering service has to apply in Form No. 4 of the above Scheme to the Head of Office, who shall issue a sanction for the payment of subscriber’s accumulation in the Savings Fund segment together with interest and arrange for its disbursement, soon after retirement. Payments under this Scheme are made in accordance with the Table of Benefit which takes in to account interest up to the date of cessation of service. Insurance cover benefit under this Scheme is available to the family in the event of death of the subscriber. No interest is payable on account of delayed payments under this Scheme.

Processing of pension papers

Numerous Paper-works

Although an individual pension has to be sought through a single pension form, numerous supporting documents are required at each step of pension processing. These paper works deal with information on different aspects of a government employee’s professional life.

In case of a general retiring or superannuation pension, pension application package of a gazetted or non-gazetted employee may include upto 11-13 types of supporting documents besides the pension application. The pension application package of a family pension case, on the other hand, may include upto 16-18 types of supporting documents.

The exact number of documents depends on whether the retiring public employee lived in government accommodation at any point of service life and whether he became a gazetted employee from non-gazetted employee.

There is further paper-work required in order to secure each supporting document.For collecting so many supporting documents, pension seekers have to resort to different processing offices and deal with various functionaries.

With low level of transparency and accountability, the application files do not move automatically without continuous persuasion.

So they have to invest considerable time and energy that exhaust them both physically and psychologically. It is more difficult for majority of the pension seekers who are in old age and/or have travelled long way from home. Their expenditure also multiplies accordingly in terms of travel, food and accommodation.

Multiplicity of Processing Offices

In each step of pension processing, pension seekers usually have to go to different offices. Sometimes, even processing of a single document involves more than one office. In the backdrop of a pension delivery system that is already complex for various reasons, more processing offices mean more harassment.

The number of processing formalities and functionaries increases along number of processing offices. This is a critical situation for pension seekers.

They might have many documents at hand to be processed from various processing offices. Delays in processing of some documents ultimately delay receiving of pension.

Processing offices are generally located at distance from each other. Sometimes they are situated at separate towns or districts.

This lead to increased incidental costs that exacerbate financial loss in securing pension.

Procedural Complexity

Scrutinisation mechanism for pension applications of all kinds constitute of multiple formalities and file-works. Processing works generally do not go smoothly in horizontal manner. Rather it often takes a circular path. A file is put through several rounds of scrutiny that leads to duplication and overlapping of processing work. It often takes several functionaries to verify one piece of information. Instead of dual or multiple utilization of a single document, different supporting documents are sought to verify different aspects of a pension case.

Salary drawing is a regular financial transaction between government and employees. Salary record, therefore, is a critical component of a employee’s service record. Due to its continuous change over whole service period, salary record has to be regularly updated. But that doesn’t happen with many employees due to complexities in related procedures.

Ultimately, their pensions get held up for incomplete service record.Another manifestation of procedural complexity is provision of securing a No Demand Certificate (NDC) from concerned housing, water and electricity authorities.

Lack of Transparency and Accountability

Lack of transparency and accountability of pension functionaries is a major systemic cause of pension related harassment. Existing laws, rules and regulations that guide pension have not sufficiently covered the issues of transparency and accountability of pension delivery functionaries. It is evident from the fact that there is no specific mechanism of lodging complaint and getting remedies for pension seekers when they face harassment

Pension processing is not an independent function. It is generally tied to developments in service history as much as to retirement and pension seeking proceedings. Regular maintenance and updating of certain service related documents have bearing on pension delivery.

The other required documents have to be processed prior and during retirement. But in most cases,pension documents and supporting documents cannot be secured in short time. Again, when the documents are delivered, they are often found incomplete or with mistakes that necessitates reprocessing.

Because, the existing pension delivery service is not based on reward and punishment. It does not stipulate time-bound performance and target-oriented disposal of assignments from pension delivery functionaries. There is no fixed date for file put-up and disposal. There is no monitoring and evaluation of pension service delivery.

The service books of employees are maintained and updated by parent office. Each entry into the service book should be verified by the D.D.O. The verified information may have to be authenticated from concerned Accounts Office.

All these tasks, maintaining, updating, verifying and get authenticated are responsibilities of the concerned functionaries of parent office. But these responsibilities are not regularly discharged by them. Rather, they often keep the service books unattended and complete the formalities once in a couple of years.

In this way, many retiring employees get audit objections or have their pension process slowed because of incomplete service book/record.

 Now question may arise, how salary bills are prepared and sanctioned without service book/record being updated?

They are done through persuasion of Accounts Office functionaries by employees.. The employees on the other hand do not bother since their salary payment is uninterrupted. But they get into trouble during retirement as they duly face audit objection.

Shortfalls regarding Pension Laws, Rules and Regulations

There are shortfalls with pension related laws, rules and regulations that induce harassment.Loopholes in rules and regulations that pension often create scopes of rent-seeking and harassment.

Again, existing regulations are not always properly implemented. Furthermore,extra-legal development in one’s service history, that he didn’t have any control over, affects his pension prospect.

Both gazetted and non-gazetted employees who work in transferable position, who haven’t worked in single station but in different stations, face more difficulty in pension processing due to non-implementation of regulation. Because, as an employee is transferred from one station to another, his service record/book, Last Pay Certificate (LPC), leave account etc. are not often simultaneously sent.

Although that is provided by existing regulation, it is not honoured in most cases.

The original service book of an employee is opened in the station where he joined service. As he is transferred, pages from his service record should be copied and sent to the new station while the original will stay in that station.

But this is sometimes lapsed. May be only LPC is sent but not service record/book and other documents. The urgency of sending LPC is more both on the parts of employee and concerned D.D.O. of parent office as it is immediately required for getting salary.

Those that are required in the long run, as in pension processing, service record/book etc. are not often sent timely or sent at all.

Each government establishment can properly maintain and regularly update two copies of service books for employees.

One copy should be with the employees and the other copy may be with parent office authority. The service books should be updated of each year. If they are not updated within that time, concerned administrative authority should take punitive measures against the responsible personnel. Backlog in updating service books is still rampant and no responsible person has so far been hard of getting punishment.

Each government establishment can prepare list of subordinate employees who will retire in next calendar year that may be updated in quarterly basis. The list should be distributed among concerned controlling officers, accounts officers and Directorate of Accommodation (in case of the residents of government accommodation) at least a year prior to retirement. This practice is still not regular among government establishments.     

Poor Record Management

Pension seekers acutely suffer from poor record management in government establishments.This is common place from macro level of ministry/division/department/directorate to micro level of individual subordinate offices.

Some of the key pension related documents that include, most importantly, service record/book are maintained by the pensioners’ parent offices or concerned accounts offices. But these documents are not regularly maintained and updated.

Consequently, during retirement, pension processing of many employees get obstructed over incomplete or mistake-laden service record/book. This also creates risk of loss in pension payments over mistakes in service period, salary increment, leave balance etc.

 Delay in pension processing may be sorted out when paper works and Processing Stages will be reduced.

Ensuring Transparency and Accountability should be maintained and proper Implementation of Rules and Regulations of pension is the possible remedy to this problem against the above factors.

source:tkbsen.com