Important News for Pre-2001 Pensioners

I am here sharing the article on the topic Important News for Pre-2001 Pensioners delivered by Mr. Agha Aamir. Let’s see which good / important points are described for the pensioners retired prior to 2001.

Ever since the “revised pay scales and fringe benefits” were notified by federal government on 4 Sep 2001, there was resentment among public servants in general and among the retired / nearing retirement public servants in particular insofar as the “pension reforms” were concerned.  Main features of the 2001 payscales-cum-pension-revision-scheme were:

A – Payscales related revisions

  • Increase in minimum basic pay of payscales               by 50 to 60%;
  • Increase in maximum basic pay of payscales by 100 to 120%
  • Increase in number of annual increments                    from 10~15 to 14~30;
  • Allowances no longer payable from 1 Dec 2001
  • Cost of Living Allowance
  • Ad hoc relief, and
  • Secretariat / Personal Allowance.
  • Selection Grade and Move Over discontinued forthwith.

B – Pension related “reforms”

  • Commutation table replaced by one with lesser number of years’ purchase;
  • Maximum Limit for pension commutation reduced from 50% to 40%;
  • Benefit of 2% for extra year beyond 30 years of service discontinued.
  • Increase in pension from 1999 discontinued;
  • Restoration of pension (upon expiry of commutation period) withdrawn;
  • 2001 and further increases in pension allowed only on Net Pension;

2.         All existing government servants (as on 4 Sep 2001) were required to give written choice either to opt for 2001 pay-cum-pension-scheme in totality, or to continue in the 1994 scales.  As for the pensioners on 4 Sep 2001, there was no choice or option.  The pension reforms were simply enforced upon them.

3.         Such pensioners were hard-hit most by 2 “reform” clauses.  The one listed in para 1 B (x) above denied to them the benefit of restoration of commuted part of pension upon expiry of commutation period.  This “reform” was eventually withdrawn by government.

4.         The second “reform” clause, listed in para 1 B (xi) above, curtailed the benefit of future increases in pension by limiting these to a percentage of “Net Pension” only.  In simple words, the 2001 increase as well as all future increases on the commuted part of pension were denied.  So, if a pensioner retired in Aug 1998 with Gross Pension of Rs.4,000 and had got 50% pension commuted, the general increases in pension were no longer admissible on Rs.2,000, the commuted part.  To illustrate this progressive loss in pension, consider the table below.  The loss of income, which was Rs.100 only in 2001, accumulated to Rs.8,386 by the time of restoration of commuted part in Aug 2013.

1 Year Increase on commuted pension Total
On % Rs
2 2001 2,000.0 5.0 100.00 2,100.00
3 2003 2,100.0 15.0 315.00 2,415.00
4 2004 2,415.0 8.0 193.20 2,608.20
5 2005 2,608.2 10.0 260.83 2,869.03
6 2006 2,869.0 15.0 430.35 3,299.38
7 2007 3,299.4 15.0 494.91 3,794.29
8 2008 3,794.3 20.0 758.86 4,553.15
9 2009 4,553.2 20.0 910.63 5,463.78
10 2010 5,463.8 20.0 1,092.76 6,556.54
11 2011 6,556.5 20.0 1,311.31 7,867.84
12 2012 7,867.8 20.0 1,573.57 9,441.41
13 2013 9,441.4 10.0 944.14 10,385.55
Total increases 8,385.55

5.         Pensioners did not succumb to these irrational reforms.  They attempted to obtain relief at one or other legal forum.  Without going into details of each case, it may be summed up that they succeeded in winning various legal cases against government and getting benefits of:

  • Allowing (on notional basis) that single increase on commuted (and restored) part of pension for the year in which the commuted part was restored; with financial effect from the date of restoration only.  The amount of increase for the year 2013 was thus allowed, in addition to restoration of Rs.2,000.  The pension got total increase of Rs.2,200 from date of restoration.
  • Allowing (on notional basis) all increases [which had not been allowed from 2001 onward till the date of restoration] with effect from date of restoration.  No arrears for the period prior to date of restoration were however allowed.  With this significant win, the cumulative increase of Rs.8,386 was allowed to the pensioner, and the net increase from date of restoration totaled to Rs.10,386.  No benefit was however available for the period from Dec 2001 to Aug 2013.

6.         Many pensioners were not satisfied with these partial successes in getting their due right of pension.  They believe that, in the words of Supreme Court, Pension is neither a bounty nor an ex-gratia payment by government.  It is the compensation for the past services.  And it has to be given as per service / pension laws.

7.         Civil Servants Act also provides that terms and conditions of service shall not be changed to the disadvantage of government servants.  Pensioners therefore continued to struggle to get those terms of service / pension which were prevalent before the 2001 pay-cum-pension scheme.  And allowing practically all increases on Gross Pension was a very significant and important part of the pre-2001 pension orders.

8.         The struggle to regain their right in full has finally yielded the desired results.  Through its order dated 2 March 2018 in Writ Petition 17989/2016, the Lahore High Court directed the government to implement and follow its 1994 orders prevalent before 2001. 

9.         Finance Division conveyed the Lahore High Court directions to the Controller General of Accounts Islamabad on 10 April 2018 and asked for compliance report on urgent basis.  These directions were then forwarded by Controller General of Accounts on 25 Apr 2018 to the Accountant General Pakistan Revenues Islamabad “for onward necessary action”.  AGPR Islamabad office conveyed these directions to its sub offices at Lahore and Karachi for implementation of the judgment in all identical Writ Petitions Nos.17998 to 17998. In one case, the AGPR Karachi revised the pension along with the remarks:

            “Note: REVISED INCREASE ON GROSS PENSION AS PER COURT CASE

10.       To sum up the position, Finance Division orders dated 4 Sep 2001, denying increases in pension on commuted part of pension from 2001 onward, have lost validity. Now, all pension increases from 2001 onward are admissible to the old pensioners on Gross Pension.  And that, too, on actual basis [not on mere notional basis].

11.       When this news gets around to all pensioners, they will flood the respective pension offices with requests for allowing similar benefit.  They would rely mainly on the Supreme Court written directions in case of Hameed Akhtar Niazi v.  The Secretary  Establishment Division Government of Pakistan and others 1996 SCMR 1185, that all equally placed persons are to be given the benefit of a litigation, even if only a few of them have won the legal cases, instead of compelling other persons also to enter into litigations.

12.       Whether government considers it expedient to issue a policy direction on this aspect, or compels other equally placed pensioners to enter into litigation, remains to be seen.

13.       One word of caution – The benefit of latest orders is admissible to only those pensioners

(a)        who had retired before 2001, and

(b)        who were not given actual increase on Gross Pension 2001 onward; and

(c)        whose commuted pension had not been restored up to 2001

14.       You are welcome to send your critical views and suggestions at [email protected]

Agha Amir

0300 9800246

Pre-2001 Pensioners

Share this post

4 thoughts on “Important News for Pre-2001 Pensioners

  1. Sir, Reference your post for pensioners who retired before 2001. Has the orders of High Court stands suspended as narrated by certain offices. if so, could you please let us know as to why. Thanks and regards and appreciate your service to humanity in such commendable manner.

    Reply
  2. A.O.A Sir, mere Abu ki D.O B 1964 ki hai aur Retirement 1996 ki hai aur mere Abu ki pention iss waqt 10750 rupay hai. Tu sir mein yeh janna chahta hon ke mere Abu ko koi benifit mil sakta hai pre 2001 ki surat mein. Braye meherbani sir ap mujhey iss barey mein sahih tarhah guide kr den. My Email Address ([email protected]). Shukriya Sir

    Reply
  3. AoA Agah Amir bahi above written discussion pensioner related problems only facing pensioner retire before 01 Dec 2001. Kindly above details translate in urdu. Thanks

    Reply

Post Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.