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Detail of Payment Plan of Arrear Amount for the Pensioners

The step by step detail of the payment plan to the pensioners is as under:

Double the Pension

Most of us pensioners would already be knowing that from 1.12.2001 onwards all increases in pension
were given by government on Net Pension. Earlier increases were given on Gross Pension, as enhanced
by various previous increases.

Net Pension means :

1.

Gross Pension (originally allowed on retirement with all corrections)

2.

As enhanced by various increases in pension after retirement

3.

Less: Commuted part of pension, for which lump commutation value was received.

Restoration of commuted part of pension was discontinued in respect of those pensioners who had opted
for the 2001 Payscale-cum-Pension scheme 2001. Pensioners retiring in pre-2001 scales continued to be
eligible for restoration of commuted part of their pension, on expiry of the period for which commutation
value was received.

The period for which commutation value was received depends upon the age of retiring
pensioner. It was 15.4649 years value for those who retired at the age of 60 before 1.12.2001. For
restoration purposes it is rounded off to whole 15 years. Thus pensioners retiring at the age of 60
are entitled to get the restoration benefit on reaching the age of 75 years. So if their pension was
100, and they got 50 commuted, it would be again 100 upon restoration.

For persons retiring before the age of 60 years, the period of commutation value was much more.
For those retiring before 1.12.2001 pension scheme, between the ages of 51 to 59, the periods
range is between 22 and 16 years. So the younger the age on which one retires, the more value
one gets for the part of pension which is commuted. And that younger retiree has to wait for more
years than 15, before the restoration benefit can materialize.

Some pensioners moved the courts with the plea that restoration means adding back of the
commuted pension with addition of all increases notified before the restoration date, which were
held back on the commuted part. Otherwise, upon restoration, the commuted-and-restored half
part of the pension would be less than the un-commuted half part enhanced by increases. That is
not the spirit of restoration, as upon restoration, both halves of pension should be equal. In other
words, upon restoration, the pension should be double of amount of un-commuted part, as
enhanced by all increases.

This needs somewhat detailed explanation and illustration through figures. So let us presume the
basic data in respect of Mr. Pensioner, who retired on 10.1.1996 at the age of 60 years and got
half his pension (Rs.1,000) commuted.

Mr. Pensioner

Grade 16

Born on

10.1.1936

Retired

10.1.1996

Gross

2,000

Commuted

1,000

Un-commuted

1,000

Increases in pension before 1.12.2001 were given on A, the Gross Pension, as enhanced by
previous increases. In this illustration, the first increase Mr. Pensioner received was on 1.3.1997.
That increase as well as the 1999 increase both were given on A, the Gross Pension as under :Increases
Date

Before
1.12.2001

on

With
increase

Rs

Less
commuted

Net

1.3.1997

10

2,000

200

2,200

1,000

1,200

1.7.1999

25

2,200

550

2,750

1,000

1,750

From 1.12.2001 onwards, increases were given on B Net Pension. So the increase on 1.12.2001
was given on Rs.1,750, while Gross was Rs.2,750. All subsequent increases were also given up
to 1.7.2011on B Net, till the commuted part of pension was restored on 10.7.2011, as per table
below:
Increases
%

on

Rs

With
increase

1.3.1997

10

2,000

200

2,200

1,000

1,200

1.7.1999

25

2,200

550

2,750

1,000

1,750

1.12.2001

1,750

88

2,838

1,000

1,838

1.7.2003

15

1,838

276

3,113

1,000

2,113

1.7.2004

2,113

169

3,282

1,000

2,282

1.7.2005

10

2,282

228

3,510

1,000

2,510

1.7.2006
From 1.12.2001
1.7.2007
onwards
1.7.2008

15

2,510

377

3,887

1,000

2,887

20

2,887

577

4,464

1,000

3,464

20

3,464

693

5,157

1,000

4,157

1.7.2009

20

4,157

831

5,989

1,000

4,989

1.7.2010

20

4,989

998

6,986

1,000

5,986

1.7.2011

20

5,986

1,197

8,184

1,000

7,184

Date
Before
1.12.2001

total increases

Less
commuted

Net

6,184

Petitioners pleaded with the courts that on restoration date (in this example 10 July 2011), both
the halves of pension (commuted as well as un-commuted) should be of the same amount when

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totaled along with all increases. In actual practice, denial of increases on commuted part from
1.12.2001 had resulted in commuted half (along with increases) being much less than uncommuted half. Let us first see the commuted half that rose to Rs.2,540 along with increases of
Rs.1,540 up to 1.7.2011. It will be noticed that increases from 1.12.2001 onwards were given on
that amount (Rs.375) which increase had already been given earlier on the commuted part also.
Increases

Date

Increases from
1.12.2001 onwards
allowed only on
Rs.375 increase
before 1.12.2001

on

1.3.1997

10

1,000

100

1,100

1.7.1999

25

1,100

275

1,375

1.12.2001

375

19

1,394

1.7.2003

15

394

59

1,453

1.7.2004

453

36

1,489

1.7.2005

10

489

49

1,538

1.7.2006

15

538

81

1,619

1.7.2007

20

619

124

1,743

1.7.2008

20

742

148

1,891

1.7.2009

20

891

178

2,069

1.7.2010

20

1,069

214

2,283

1.7.2011

20

1,283

257

2,540

total increases

With increase

Rs

1,540

On the other hand, total increases up to 1.7.2011 on the un-commuted half were as high as
Rs.4,645 (Rs.3,105 more than on commuted part) as per details below.
Increases

Date

on

With increase
Rs

1.3.1997

10

1,000

100

1,100

1.7.1999

25

1,100

275

1,375

1.12.2001

1,375

69

1,444

1.7.2003

15

1,444

217

1,660

1.7.2004

1,660

133

1,793

On Un-commuted part 1.7.2005

C = Rs.1,000
1.7.2006

10

1,793

179

1,972

15

1,972

296

2,268

1.7.2007

20

2,268

454

2,722

1.7.2008

20

2,722

544

3,266

1.7.2009

20

3,266

653

3,920

1.7.2010

20

3,920

784

4,704

1.7.2011

20

4,704

941

5,644

total increases

4,645

This plea was accepted by the Supreme Court and government was directed to grant all those
increases on commuted half also, which had been denied earlier, so that upon restoration, both
halves of pension should be equal. However, no arrears for period prior to restoration date were
allowed.

In compliance of Supreme Court directions, government had finally to give all increases on
commuted half of pension also, upon its restoration, which had earlier been denied, but no
arrears were payable before the restoration date. In other words, all increases on commuted half
of pension were also calculated on notional basis, and the net result added to restored pension
from the restoration date. Through these increases, calculated from 1.12.2001 onwards, but given
effect from the date of restoration, both halves of pension were brought to the same / equal figure.

Cumulative increase of Rs.3,105 was thus given in lump from the date of restoration (10.7.2011 in
this case) to make both halves of pension equal. This difference may be explained to comprise
the following increases on commuted Rs.1,000 from 1.12.2001 onwards:
Increases not given

Date
%

on

With increase
Rs

1.12.2001

1,000

50

1,050

1.7.2003

15

1,050

158

1,208

1.7.2004

1,208

97

1,304

1.7.2005

10

1,304

130

1,435

On Commuted part B 1.7.2006

= Rs.1,000
1.7.2007

15

1,435

215

1,650

20

1,650

330

1,980

1.7.2008

20

1,980

396

2,376

1.7.2009

20

2,376

475

2,851

1.7.2010

20

2,851

570

3,421

1.7.2011

20

3,421

684

4,105

total increases

3,105

Punjab government has so far been contesting this concession to its pensioners on the grounds
that its pension rule are independent of federal government rules. However, it has finally agreed to
give the benefit to its pensioners, and has submitted a plan under which the benefit would be
given to concerned pensioners in different time phases.