Absorption in PSU & Pension

No.4/59/97-P&PW(D) Government of India Ministry of Personnel, Public Grievances & Pensions (Department of Pension & Pensioners’ Welfare) Third Floor, Lok Nayak Bhavan, New Delhi, dated the 14th July, 1998 OFFICE MEMORANDUM Restoration of one-third commuted portion of pension after 15 years from the date of commutation or 1.4.85, whichever is later in respect of Government servants who had drawn lumpsum payment on absorption in Public Sector Undertaking/Autonomous Body – Implementation of Supreme Court Judgement dated 15.12.1995 in Writ Petition (C) No.11855/85 as well as Supreme Court order dated 1.5.1998 in Contempt Petition No. 530/97 in Writ Petition (C) No.11855/85. The undersigned is directed to say that Government servants who had drawn lumpsum payment on absorption in a PSU/Autonomous Body have become entitled to restoration of 1/3rd commuted portion of pension as per the provisions of this Department’s O.M.No.34/2/86-P&PW dated 5th March, 1987, after 15 years from the date of commutation or 1.4.1985, whichever is later, based on the Supreme Court judgement dated 15.12.1995 in Writ Petition (C) No.11855/85. Orders in Implementation of the judgement had been issued by this Department vide O.M.No.4/3/86-P&PW(D) dated 30.9.1996. After issue of this OM, a number of clarifications had been sought by various Ministries/Departments/Pensioners’ Association etc. on revision of the restored amount of 1/3rd commuted portion of pension, dearness relief/interim relief on the restored amount, payment of minimum pension etc. All these issues were examined and classificatory instructions had been issued by this Department vide O.M.No.4/3/86-P&PW(D) dated 13.1.1998. 2. With reference to the Contempt Petition No.530/97 in Writ Petition (C) No.11855/85, the Supreme Court in its order dated 1.5.1998 has inter-alia ruled that the Respondents are liable to restore not only the pension as ordered by this Court in the said judgement but also all the attendant benefits as given to Central Government Pensioners. 3. The modalities of implementation of the Supreme Court order dated 1.5.1998 have been under active consideration of the government. The President is now pleased to decide that the beneficiaries of the Supreme Court judgement dated 15.12.1995 shall be entitled to the benefit of revision of the restored amount of 1/3rd commuted portion of pension at par with other Central Government pensioners. Accordingly, in supersession of the instructions contained in this Department’s O.M.No.4/3/86-P&PW(D) dated 13.1.1998 it has been decided that the cases of absorbed employees for revision of the restored amount of 1/3rd commuted portion of pension etc. shall be regulated as under:- Revision of the restored amount of 1/3rd commuted portion of pension as per the Liberalised Pension Formula of 1979/Fourth-Fifth Central Pay Commission’s recommendations where permanent absorption in the PSU/autonomous body had taken placed prior to 31.3.1979.

(a) In such cases, the basic pension that was sanctioned at the time of absorption should be first notionally revised as per the Liberalised Pension Formula of 1979. For this purpose, the Ready Reckoner prescribed under Department of Expenditure O.M.No.F.1(3)-EV/83 dated 22.10.1983 should be made use of. After the basic pension has been notionally revised, 1/3^rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 1.4.1985, whichever is later. Administrative Ministries/Departments may please refer to Table-I of Annexure-I of the enclosed specimen for guidance.

(b) The basic pension after having been notionally revised as in (a) above should be further notionally rationalised as per the decision of the Government on the recommendations made by the Fourth Central Pay Commission. For this purpose, the Table prescribed under this Departments O.M.No.2/1/87-PIC-I dated 16.04.1987 should be made use of. After the revised notional basic pension has been calculated, 1/3^rd portion of such pension should be worked out and shall be payable in lieu of the amount arrived at (a) above w.e.f. 1.1.86 or 15 years from the date of commutation, whichever is later. Administrative Ministries/Departments may please refer to Table-II of Annexure-I of the enclosed specimen for guidance.

(c) The basic pension after having been notionally revised and consolidated as in (a) and (b) above should be further notionally revised as per the decision of the Government on the recommendations made by the Fifth Central Pay Commission. For this purpose, the Table prescribed under this Department’ O.M. No.45/86/97-P&PW(A)-Part.II dated 27^th October, 1997 should be made use of. After the notional basic pension has been so calculated, 1/3^rd portion of such pension should be worked out and shall be payable in lieu of the amount arrived at (b) above w.e.f. 1.1.996 or 15 years from the date of commutation, whichever is later. Administrative Ministries/Departments may please refer to Table-III of Annexure-I of the enclosed specimen for guidance.

2. Revision of the restored amount of 1/3rd commuted portion of pension as per the recommendations made by the Fourth & Fifth Central Pay Commissions where permanent absorption in a PSU/Autonomous Body has taken place on or after 1.4.1979 but prior to 1.1.1986.

(a) The basic pension that was sanctioned at the time of absorption should be first notionally revised as per the decision of the Government on the recommendations made by the Fourth Central Pay Commission based on the Table prescribed under this Department’s O.M.No.2/1/87-PIC-I dated 16^th April, 1987. Thereafter 1/3^rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 1.1.1986, whichever is later. Administrative Ministries/Departments may refer to Table-II of Annexure-I of the enclosed specimen for guidance.

(b) The basic pension after having been notionally revised as in (a) above should be further notionally revised w.e.f. 1.1.1996 as per the decision of the government on the recommendations made by the Fifth Central Pay Commission. For this purpose the Table prescribed under this Department’s O.M.No.45/86/97-P&PW(A)-Part-II dated 27^th October, 1997 should be made use of. Thereafter 1/3^rd portion of such pension should be worked out and shall be payable in lieu of the amount arrived at (a) above w.e.f. 1.1.1996 or 15 years from the date of commutation, whichever is later. Administrative Ministries/Departments may please refer to Table-III of Annexure-I of the enclosed specimen for guidance.

3. Revision of the restored amount of 1/3rd commuted portion of pension as per the recommendations made by the Fifth Central Pay Commission where permanent absorption in a PSU/autonomous body has taken place on or after 1.1.1986 but prior to 31.3.1995.

The basic pension that was sanctioned at the time of absorption should be notionally revised as per the decision of the Government on the recommendations made by the Fifth Central Pay Commission based on the Table prescribed under this Department’s O.M. No. 45/86/97-P&PW (A)-Part-II dated 27^th October, 1997. Thereafter 1/3^rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 1.1.1996, whichever is later. Administrative Ministries/Departments may refer to Table-III of Annexure-I of the enclosed specimen for guidance.

4. Revision of the restored amount of 1/3^rd commuted portion of pension of pre-1986 absorbed employees as per the provisions contained in Department of Pension & Pensioners Welfare O.M.No.45/86/97-P &PW(A)-Part-III dated 10^th February, 1998.

(a) After completion of the exercise suggested in (I) and (II) above, the basic pension of pre-1986 absorbed employees should be further notionally revised as per the orders contained in the O.M. dated 10.2.1998 and its 1/3^rd component worked out and shall be payable in lieu of the amount arrived at (I) and (II) above w.e.f. 1.1.1996 or 15 years from the date of commutation, whichever is later.

b) Revision of pension in terms of paragraph I(c) and II(b) shall be necessary in cases where implementation of the O.M. dated 10.2.1998 is likely to take sometime so that immediate relief could be provided to absorbed employees. In such cases pension sanctioning authorities should take immediate action to revise the restored amount of 1/3^rd commuted portion of pension as provided in para 3(I) and (II) above and release the arrears, if any, as well as revised amount of 1/3^rd commuted portion of pension to the absorbed employees immediately. Thereafter action should be taken to implement the directions contained in the O.M. dated 10.2.1998 without any further delay.

4. Dearness Relief on the restored amount of 1/3^rd commuted portion of pension shall be admissible at the same rate at which it has been made admissible to other Central Government pensioners from time to time. The rates at which D.R. has been released by the Government to its pensioners during the period form 1.4.1985 to 1.1.1998 has been indicated in Annexure-II.

5. Payment of D.R. on the restored amount is subject to the condition that the absorbed employee was not re-employed/employed under the Central Government or a State Government or a Corporation/Company/Body/Bank under them in India or abroad, including permanent absorption in such Corporation/Company/Body/Bank at the time of restoration.

6. It has been further decided that the absorbed employees shall be entitled to the payment of arrears on account of Interim Relief-I and II from 1.4.1995 at the same rate at which I.R. has been made admissible to Central Government Pensioners viz.

I.R.-I –  Rs.50/- per month w.e.f. 1.4.1995.
I.R.-II-  10% of the restored amount of 1/3^rd commuted portion of pension or Rs.50/- which ever is more, w.e.f. 1.4.1995.

7. Arrears on account of I.R. shall be payable provided the absorbed employee has become entitled to restoration of 1/3^rd commuted portion of pension as on 1.4.1995. Where the 1/3^rd commuted portion of pension become due for restoration during the period from 1.4.1995 to 31.12.1995, arrears on account of I.R. shall be admissible for the relevant period only. Payment of arrears of I.R. is subject to the further condition that the absorbed employee was not re-employed/employed under the Central or State Government or a Corporation/Company/Body/Bank under them in India or abroad, including permanent absorption in such Corporation/Company/Body/Bank. I.R. be shown as a separate element and no Dearness Relief on this element will be admissible.

8. The benefit of revision of the restored amount of 1/3^rd commuted portion of pension shall be admissible from the date the commuted portion of pension is restored.

9. In so for as extension of family pension benefits under the CCS(Pension) Rules, 1972 is concerned, it is clarified that wherever a Central Government absorbee in a PSU/autonomous body (in individual cases of absorption) had retired from the service of the PSU/autonomous body prior to issue of this Department’s O.M.No.1/18/86-P&PW(D) dated 22^nd January, 1990 such cases are required to be examined in accordance with the instructions contained in the Department of Expenditure O.M.No. 4(10)-EV (B)/77 dated 10^th July, 1978 and this Department’s O.M.No.1/3/85-Pension Unit dated 20.9.1985. In other words, the question of extending family pension benefits under the Central Government rules will arise only if the absorbed employee was not compulsorily governed by the family pension scheme of the PSU framed under the EPF and Miscellaneous Provisions Act, 1952 or was not eligible to become a member of the family pension scheme of the PSU because of his drawing more pay than prescribed under the rules etc. It is for the administrative Ministry etc. to examine each case and authorise family pension in the PPO provided the request is covered by the instructions contained in the Office Memorandum dated 10^th July, 1978 and 20^th September, 1985.

10. Where the death of an absorbee has taken place after 15 years from the date of commutation of pension or 1.4.1985, whichever is later, and he had become entitled to the benefit of restoration of the commuted portion of pension, the family member(s)/legal heir(s) will be eligible to claim the arrears becoming due in accordance with the provisions contained in this order.

11. The pension sanctioning authorities are requested to ensure that at the time of preparing PPOs in these cases for authorisation of payment, they should clearly superscribe the PPOs as ‘PSU/autonomous body absorbees’ and also suitably indicate the originally-sanctioned 1/3^rd commuted value of pension. This will enable all concerned, whenever any revision/merger takes place in future, to identify these cases and ensure that they do not get merged with regular pensioners.

12. The pension sanctioning authority viz., the Ministry/Department/Office where the absorbed employee was employed prior to absorption, will have to work out the arrears payable on account of revision of the restored amount of 1/3^rd commuted portion of pension. DR/IR on such pension and issue necessary sanction through the normal channel viz. CPAO for its payment by the Banks/PDAs etc. It will also be the responsibility of the pension sanctioning authority to ensure that arrears, if any, already paid to the absorbed employee based on O.M.NO.4/3/86-P&PW(D) dated 30.9.96 and 13.1.1998 are recovered/adjusted while making payment under these orders. The pension sanctioning authority will have to issue suitable directions through the CPAO etc. to the concerned Bank/PDA for the payment of dearness relief on the restored amount of 1/3^rd commuted value of pension at the rate prescribed by the government from time to time. The D.R. table prescribed by this Department from time to time will not be applicable in the case of absorbed employees whose restored amount of 1/3^rd commuted portion of pension under these orders happens to be less than the minimum amount of pension indicated in the Dearness Relief table.

13. The provisions contained in para 5 of the Department of Expenditure O.M.No.F.1(3)-EV/83 dated 22.10.1983, para 10(a) of this Department’s O.M.No.2/1/87-PIC-I dated 16.4.1987, para 7(a) of this Department’s O.M.No. 45/86/97-P&PW(A)-Part-II dated 27.10.1997 and para 19(a) of the O.M.No.45/86/97-P&PW(A)-Part-III dated 10^th February, 1998 shall be deemed to have been modified to the extent indicated in these orders.

14. This issues with the concurrence of the Ministry of Finance (Department of Expenditure) vide their U.O. No.C-45/EV/98 dated 3.7.1998.

15. Hindi version of this O.M. will follow.

(SUJIT DATTA)
Director (PW)

To
All Ministries/Departments of the Government of India

Copy to:

Office of the Comptroller & Auditor General of India, 10, Bahadur Shah Zafar Marg, New Delhi (with 200 spare copies) for onward transmission to all A.Gs.

SPECIMEN

ANNEXURE-I
TABLE-I

Revision of basic pension w.e.f. 1.1.86 as per the recommendations made by the Fourth Central Pay Commission for the purpose of working out revised restored amount of 1/3^rd commuted portion of pension

Basic pension as on 31.12.85 that would have been admissible as per Liberalised Pension Formula of 1979 (Table.I) provided the absorbed employee had not opted for lumpsum payment on absorption. (Existing pension on 31.12.85)	Further consolidation of basic pension indicated in column 5 w.e.f. 1.1.86 as per the Fourth Central Pay Commission Recommendations contained in Department of Pension & P.W. O.M.No.2/1/87-PIC-I dated 16.4.87 in respect of pensioners covered by:				1/3rd commuted portion of revised basic pension indicated in column 6 to be restored after 15 years from the date of commutation or 1.1.86, whichever is later.
	Para 4.1(A) (a)	Para 4.1(B) (b)	Para 4.1(C) (c)	Para 4.1(D) (d)	(a)	(b)	(c)	(d)
5	6				7
(Rs.131 or below)	375	375	375	375	125	125	125	125
132	376	375	375	375	125	125	125	125
133	378	375	375	375	126	125	125	125
150	417	375	375	375	139	125	125	125
200	530	465	435	375	176	155	145	125
250	655	571	532	375	218	190	177	125
300	786	686	636	375	262	228	212	125
350	917	800	742	394	305	266	247	131
500	1309	1142	1060	563	436	380	353	187

SPECIMEN

Revision of basic pension w.e.f. 1.1.96 as per the recommendations made by the Fifth Central Pay Commission for the purpose of working out revised restored amount of 1/3^rd commuted portion of pension.

Table-III

ANNEXURE-II

The rates at which DR was payable during the period from 1.4.85 to 1.1.86 on pension

The rates at which DR was payable during the period from 1.7.86 to 1.1.96 on pension upto Rs.1750/-

The rates at which DR is payable on pension w.e.f. 1.7.96 onwards

01.07.96	4%
01.01.97	8%
01.07.97	13%
01.01.98	16%

Department of Personnel and Training
Department of Administrative Reforms & Public Grievances.