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Check Your Pension Updated 01.08.11

Check Your Pension Updated 01.08.11

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Published by jkraj462364
Pension Entitlements- Latest Orders
Pension Entitlements- Latest Orders

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Published by: jkraj462364 on Aug 09, 2011
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(updated as on 01 August 2011)Introduction
1. We all believe in the system and expect that justice will be done to us. Howeveryour presumption that your bank is paying you correct pension, may not be in your bestfinancial interests. Experience indicates that Banks are frequently doing the mistake of paying lower rates of pension vis a vis authorisation to many pensioners due to poorunderstanding of defence pension provisions by their staff. Therefore it is a must forevery pensioner to know his/her correct entitlement of pension.2. The pensioners, who have retired on or after 01-01-06, generally do not have anyproblem in getting their correct pension. The CDAs in their case have issued PensionPayment Order (PPO) as per the new provisions of VI CPC. For these pensioners thebanks have no option, but to pay the pension as specified by the CDA in the PPO.However, the story is different for pre 01-01-06 retirees.3. Considering the large volume of pre-2006 pensioners (25 lacs Appx), the CDAshave expressed their inability to issue a revised PPO as per VI CPC entitlement. TheGovt has therefore issued orders to Pension Disbursing Agencies (Banks, TreasuryOffices etc) to calculate the revised pension (as per VI CPC) and pay the same to the pre-2006 pensioners directly. Govt has issued instructions to banks (with necessaryreference tables) for calculating and releasing the revised pension. Efforts are on at thehighest level to ensure that revised PPOs are issued for pre-2006 pensioners also, by theCDAs in near future. However it is linked to digitalisation of past records and datacapture of pre-2006 pensioners on a large scale by CGDA and could take some time.Therefore as on date, it is only banks who will decide the post VI CPC revision of pension, for pre-2006 pensioners.
Calculation of Correct Pension Entitlement (Pre-2006 Pensioners)
4. The revised pension for pre-2006 pensioners is required to be fixed by the banksby calculating it through two specified methods. Out of the two methods, the revisedpension is to be fixed as per the method which is more beneficial to the pensioner. Thetwo methods of pension calculation are explained below:-(a)
Consolidation Method
. In this method, the pension has been consolidatedby adding together the following:
(i) The Existing Pension / Family Pension.(ii) Dearness Pension.(iii) Dearness Relief @ 24% on (i) & (ii) above.(iv) Fitment weightage @ 40% on (i) above.
:The thumb rule for calculating revised pension under the consolidatedmethod is to multiply the existing basic pension with 2.26. For those whoretired on or after 01 Apr 04 and before 01 Jan 06, their basic Pension asreflected in PPO is inclusive of dearness pay (DP). Such pensioners have toremove the DP and go by the basic pension for correct calculation. There isa formula to do it. For example if the basic pension inclusive of DP is Rs.11325/-, then the basic pension will be11325/1.5 = 7,550/-. Thumb rulefor calculating revised pension (consolidation method) will be to multiplythe existing basic pension of Rs 7550/- with 2.26. This method of calculation is generally as per Annexure I of relevant Govt letter.(b)
Modified Parity Method
. The pension under modified parity has beenrevised by taking fifty percent of the minimum of the pay in pay band plus thegrade pay and the MSP of the rank held as per VI CPC. However, pensioncalculated under modified parity has been reduced on pro-rata basis, whereverthe full qualifying service of 33 years, has not been rendered by the pre -2006pensioner. A table-showing pension under this method is given in the next page.This calculation is as per Annexure II for officers and Annexure III for other ranks.
After calculating pension by both methods and ascertaining themost beneficial pension, the commuted amount should be deducted toarrive at the correct take home pension. Monthly DR is always on fullpension entitlement.(ii)
All Govt letters on pension provisions are followed by a circularfrom PCDA(P) Allahabad. The circular amplifies the implementationprocedure of a Govt order. Banks will release payment to pensioners onlyafter issuance of a circular by PCDA(P) Allahabad. These circulars areavailable on PCDA (P) Allahabad website.(iii)
The detailed Govt letters on pension are primarily available onPCDA (P), Allahabad website www.pcdapension.nic.in. In addition other
websites which will have similar information are www.cgda.nic.in,www.mod.nic.in and IAF website www.indianairforce.nic.in.5. It is a common complaint by pre 01-01-06 pensioners that banks are not revisingtheir pensions correctly. They are also complaining that banks are not issuing AnnexureIV despite clear Govt orders for its issuance. Annexure IV reflects the pension fixationmethodology by banks. It should have calculations by both methods i.e. consolidationand modified parity. The larger experience indicates that banks are inclined to revisepension as per consolidation method only. This method is beneficial for only 10-15% of defence pensioners. For the rest of defence pensioners who are in majority, modifiedParity method is more beneficial. Thus the first challenge for a pensioner is to find outhis revised pension as per the most beneficial method. This pamphlet will help him/herin finding out the correct pension after VI CPC.6. As explained in Para 4 above, calculating pension as per consolidated method(thumb rule) should be extremely easy. Practically thumb rule is giving almost 100%accuracy. For modified parity method calculation, the table given in the next page canbe referred. Both the calculations must be checked for arriving at the most beneficialpension. In case the pension of a pre -2006 pensioner has not been revised correctly,the pensioner should approach his/her bank for necessary corrections. If the problem isnot resolved by the bank in a reasonable time (3-4 weeks), then this office/AFRO mustbe contacted by Officers/other ranks respectively. Our address is Dte of PP&R, Air HQ,West Block-VI, RK Puram, New Delhi 110066). This office can also be contacted throughe-mail (pprmail@indiatimes.com) and direct civil No-011-26104394. The contact detailsof AFRO are given at the end of this pamphlet.

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