Friday, 10 June 2016

Seventh Central Pay Commission (7th CPC) Report:- 2 Anomalies in pension fixation.

There are two likely anomalies in the pension fixation. According to the recommendations of the 7th Pay Commission, in case of pension there are two types of pension fixation for those retired before 01/01/2016.  (para 10.1.67 of 7th CPC Report)

1. According to the first, "shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he/she had earned in that level while in service, at the rate of three percent. Fifty percent of the total amount so arrived at shall be the revised pension". In this case, there are persons who were promoted after 01/01/2006 will loose 1 increment on account of the pay fixation in between the period 01/01/2006 and 31/12/2015. This is because the retirement minimum pay has to be taken and the earned increment during the period. This can be beneficial to those who earned 10 increment in the same scale. But those who in different scale during the 10 year period, it would be a loss because the benefit of additional increment or past increment earned in lower post based on which pay was fixed in the retiring post would not be taken into consideration, but only the minimum of the scale is taken into consideration. To remove this anomaly, for such persons, the criteria should be their minimum of the pay they had drawn in at initial pay fixation in the retiring scale plus the number of increments has to be taken.

In the second method, specifically, it is mentioned that, “The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.” Hence there is an anomaly in this. That is, in fixing the new Pay Matrix, the 7th CPC used in specific cases, other multiplication factors like 2.62, 2.67, 2.72, etc. It was used to remove anomalies in the existing grade pay. But this benefit may not be available in the second case in pension cases, since specific figure 2.57 is mentioned therein without applying the anomaly reasoning in those scales thereby creating another anomaly. Whereas in the first case, it will be available, but there is another anomaly as mention above. Hence, it is expected that, when the ministry consider the report for implementation, this point will also be considered.

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  1. However, in case of the last pay drawn/ average emoluments, if the retired personnel, it will be amply clear as to how many increments are involved in the particular pay scale of the employee at the time of retirement .? For example an employee retired in pre 2006, had the last pay drawn of Rs 11950 in the pay scale of 10,000 - 15200 involving six increments in the above pay scale. In view the concerned employee may be granted six increments while fixing the pension as per seventh cpc.... Kindly advice.

    1. Anomaly discussed is in respect of Post 2006 retirees. For example, one was promoted on 01/01/2014. Retired in 31/7/2015. He got 2 increments on 1/7/2014 and 1/7/2015. During retirement if the pay is 14000/- due to pay fixation, taking 2 increments only he earned in the retireing post and calculating it from the minimum of the scale, how he/she would benefited?

  2. I retired on 31-12-2015 n fixed pension at rs:17325/- n i got 10 increments in 6600/- gp. Due to retirement of one day before of 7cpc implementation which option is more beneficial for me. Please advise me.

  3. To the best of my knowledge, no office has even undertaken the exercise of fixing pension as per the formula recommended by PC. All are getting the revised pension calculated by banks using 2.57 simple increase. Or any pensioner in this group is aware of any such excercise by their parent offices?