NOTE SUBMITTED TO NCCPA HEAD QUARTERS

NOTE SUBMITTED TO NCCPA HEAD QUARTERS ON VII CPC REPORT

1.      Minimum Pay:-

           The specifications for the need based minimum wage were derived by the VII CPC from the recommendations of Dr. Aykroyd according to which an adult male engaged in moderate activity should on a daily basis should consume 2700 calories of food. But for a female it is 2160 calories (0.8 unit) and for two children upto 14 years of age 1620 calories each (0.6 units each). The age of 14 years was arrived at in 1957 when the retirement age was 55 years. Now it is 60 years and hence the age of dependent children has to be reckoned upto 19 years. No nutritionist in the 21^st century will agree to this calory formula which is obsolete. There should not be any distinction in the calory in take of food particularly in the context that even major children upto the age of 19 years are dependant on the employee. So the multiplication factor should be 4 instead of 3. Then the minimum pay will be Rs.24000/- If it is accepted there will be corresponding increase in all levels of the Pay Matrix to maintain the vertical and horizontal relativities in the Pay Structure.

2.      Minimum Pension:-

           The Commission also endorses the Supreme Court verdict in Nakara Case that a pension scheme must provide a pensioner to live at a standard equivalent at pre-retirement level. Even if the arguments and findings of the CPC in arriving at the minimum wage are accepted a pensioner is legitimately entitled for 1.8 units pension which works out to Rs. 10800 (18000 x 1.8 divided by 3 ) as minimum pension. The rate of pension works out to 60% of last pay drawn  in this case.

3.      Parity in Pension:-

            The present parity in pension as formulated by the CPC is totally different from OROP scheme. While the OROP scheme is beneficial to each and every defence pensioner, the parity scheme proposed is not at all beneficial to more than 60% of the pensioners. To include more pensioners in the ambit of the scheme, parity may be allowed between posts/grades at the pre-retirement and at the present level instead of parity between scales of pay of the past and present.

4.      Age-related additional pension:-

             Almost all the recommendations of VII CPC were made reckoning the opinion of the Department of Pension and  Pensioners’ Welfare where as the Department’s opinion that  the age related additional pension should be allowed from 75 years onwards was discarded by the Commission on a flimsy argument that the Ministry of Defence had not supported the proposal. The stand of the CPC is unjustified. There should be at least 10% increase in pension on attaining the age of 75 years.

5.      Restoration of commuted portion of pension:-

           The commutation factor for those retiring at the age of 60 years is at present 8.194. Therefore the commuted portion should reasonably be restored after 10 years (12 years for pre 2006 retirees) even after discounting the risk factor. The interest portion accrued to Government of India exchequer, on this account, is more than 22% per annum.

6.      Fixed Medical Allowance:-

           Regarding the Health Insurance Scheme, no rational and convincing proposal is put forth by the CPC. However the proposal is not new and it is a long pending one. Till a mutually agreeable Comprehensive Health Insurance Scheme is implemented, the pensioners may be allowed a Fixed Medical Allowance of Rs. 2000/- per mensem, an amount which is allowed to the pensioners of EPF organization who are also governed by the same CCS (Pension) Rules, 1972.

T.I. Sudhakaran

General Secretary

CGPA, Kerala