Notional Pay for Pension for Pensioners

Last Updated on March 23, 2021 by Galaxy World

I am today publishing the article on the title “Notional Pay for Pension for Pensioners”. It is very useful for pensioners and pension-related persons. The details are as under:

 

Notional Pay for Pension

 

Last drawn pay and other emoluments play a major role in the determination of pension.  Let us compare the gross pension of two government servants.  Mr. A retired on 31 May 1991 in 1987 payscales, one day before the introduction of 1991 payscales effective 1 June 1991.  Mr. B retired after one day, on 1 June 1991 in 1991 payscales.  The Gross Pension of Mr. B exceeded that of Mr. A by 22 % as per the table below (the figures may not be 100% correct):

 

A B
(a) Years of service 30 years 30 years
(b) in Grade Grade 18 Grade 18
(c) Date of retirement 31-May-91 1-Jun-91
(d) In payscales 1987 1991
(e) at scale maximum Rs. 4,660 6,475
(f) add: Indexed pay 98
(g) Pay for Pension 4,758
(h) Gross Pension 3,331 4,533
(j) 1991 increase 12% 400
(k) Pension from 1.6.1991 3,730 4,533
(l) Excess of B over A 22%
  1. Realizing this huge difference in the pay/pension of persons retiring only one day apart, Finance Division issued directions through para 3 of O.M. F.6(4)Reg. (6)/91 dated 1 Oct 1991to the effect that:-
  2. Government servants who have retired on or after 01-07-1990 till the introduction of revised pay scales i.e. 01-06-1991, be allowed pension/commutation on the basis of pay that would have been admissible to them had the pay revision been effective on the date of their retirement, discounted by 12%.
  1. Pay of Mr. A was therefore revised on the notional basis for pension purpose by fixing it first at 1991 scale maximum, and then reducing it by 12% as under:

 

  • Pay at 1987 scale maximum             4,660
  • Notional pay at 1991 scale maximum             6,475
  • Reduced by 12%, for pension purposes 5,698
  • Gross Pension on notional pay             3,989
  • Excess of B over A 14 %

 

Fin Div orders dated 1 Oct 1991

 

Calculations for Revised Gross Pension of Rs. 3989/-

 

  1. Detailed calculations for the revised Gross Pension of Rs.3,989 on notionally fixed pay in 1991 payscales are as under:

 

A B
(a) Years of service 30 years 30 years
(b) in Grade Grade 18 Grade 18
(c) Date of retirement 31-May-91 1-Jun-91
(d) In payscales 1987 1991
(e) at scale maximum Rs. 4,660 6,475
(f) Notional in 1991 scale 6,475
(g) Reduced by 12% 5,698
(h) Gross Pension 3,989 4,533
(j) Excess of B over A 14%
  1. A similar facility of increase in pension after notional pay fixation in 1994 payscales was given to those government servants also who retired between 1 June 1993 and 31 May 1994. To sum up, the pension of persons having retired between dates mentioned below was to be revised upward on the basis of notional pay in scales which were generally effective after they retired.

 

Fin Div orders dated 15 June 1994 Notional Pay for Pension for Pensioners Notification Notification Notional Pay for Pension

 

1 1991 Payscales 1994 Payscales
2 generally effective from Notionally effective from the date of retirement for persons retired between generally effective from Notionally effective from the date of retirement for persons retired between
3 1-Jun-91 1-Jul-90 31-May-91 1-Jun-94 1-Jun-93 31-May-94
  1. Government servants having retired during the particular periods mentioned above were not expected to be well conversant with pension rules in general, and of any government orders in particular, which were issued by Finance Division after their retirement, and circulated to government offices only. Cases are emerging even now where the entitled pensioners did not avail of the due benefit simply because they were unaware of the orders.
  1. If the pensioners themselves (or in case of their having expired, their families) have not so far availed of this benefit, they may do so now. The opinion is given free to all concerned.

 

Agha Amir Ahmad, 0300-9800246

 

 

Notional Pay for Pension

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