RBE No. 185/1998: Pension – Commutation of Pension
No.F(E)III/96/PN1/9, dated 18.08.1998
Sub: Restoration of one-third commuted portion of pension after 15 years from the date of communication or 01.04.1985, whichever is later in respect of Government servants who had drawn lump sum payment on absorption in PSU/ autonomous body – Implementation of Supreme Court Judgment dated 15.12.1995 in Writ Petition (C) No.11855/1985 as well as Supreme Court order dated 01.05.1998 in Contempt Petition No.530/1997 in Writ Petition (C) No.11855/1985.
1. In supersession of the instructions contained in Board’s letter of even number dated 06.02.1998 (RBE No. 25/1998) circulating DOP&PW’s OM No.4/3/86-P&PW(D), dated 13.01.1998, a copy of DOP&PW’s OM No.4/59/97-P&PW(D), dated 14.07.1998 together with its enclosures is sent herewith. Instructions contained therein apply mutatis-mutandis on the Railways.
2. A concordance of various orders referred to in the enclosed OM w.r.t. the corresponding Railway instructions is indicated below:
| S. No. | Para No. | No. & date of DOP&PW/ DO Exp’s OM | No. & date of corresponding orders of Railway Board |
| 1 | 1 | 34/2/86-P&PW, dated 05.03.1987 | F(E)III/87/PN1/7, dated 26.03.1987 (RBE No. 329/1987) |
| 2 | 1, 12 | 4/3/86-P&PW(D), dated 30.09.1996 | F(E)III/96/PN1, dated 25.10.1996 (RBE No. 103/1996) |
| 3 | 1, 3 | 4/3/86-P&PW(D), dated 13.01.1998 | F(E)III/96/PN1/9, dated 06.02.1998 (RBE No. 25/1998) |
| 4 | 3(I)(a), 13 | F(E)III/96/PN1/8, dated 29.11.1983 | |
| 5 | 3(I)(b), 3(II)(a), 3(III), 13 | 2/1/87-PIC-I, dated 16.04.1987 | PC-IV/87/Imp/PN2, dated 20.04.1987 (RBE No. 95/1987) |
| 6 | 3(I)(c), 3(II)(b), 13 | 45/86/97-P&PW(A)Pt.II, dated 27.10.1997 | F(E)III/97/PN1/23, dated 07.11.1997 (RBE No. 143/1997) |
| 7 | 3(IV), 13 | 45/86/97-P&PW(A)Pt.II, dated 10.02.1998 | F(E)III/98/PN1/2, dated 10.03.1998 (RBE No. 55/1998) |
| 8 | 9 | 1/18/86-P&PW(D), dated 22.01.1990 | F(E)III/90/PN1/8, dated 21.02.1990 (RBE No. 36/1990) |
| 9 | 9 | 4(10)-E.V(B)/77, dated 10.07.1978 | F(E)III/78/PN1/18, dated 24.07.1978 |
| 10 | 9 | 1/3/85-Pension Unit, dated 20.09.1985 | F(E)III/85/PN1/25, dated 26.12.1985 |
Ministry of Personnel, Public Grievances & Pensions
Department of Pension & Pensioners Welfare
O.M. No.4/59/97-P&PW(D), dated 14th July, 1998
OFFICE MEMORANDUM
Sub: Restoration of one-third commuted portion of pension after 15 years from the date of communication or 01.04.1985, whichever is later in respect of Government servants who had drawn lump sum payment on absorption in PSU/ autonomous body – Implementation of Supreme Court Judgment dated 15.12.1995 in Writ Petition (C) No.11855/1985 as well as Supreme Court order dated 01.05.1998 in Contempt Petition No.530/1997 in Writ Petition (C) No.11855/1985.
1. The undersigned is directed to say that Government servants who had drawn lump sum 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 OM No.34/2/86-P&PW, dated 5th March, 1987, after 15 years from the date of commutation or 01.04.1985, whichever is later, based on the Supreme Court judgment dated 15.12.1995 in Writ Petition (C) No.11855/85. Orders in implementation of the judgment had been issued by this Department vide OM No.4/3/86-P&PW(D), dated 30.09.1996. After 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 clarificatory instructions had been issued by this Department vide OM No.4/3/86-P&PW(D), dated 13.01.1988.
2. With reference to the Contempt Petition No.530/1997 in Writ Petition (C) No.11855/1985, the Supreme Court in its Order dated 01.05.1998 has inter alia ruled that the Respondents are liable to restore not only the pension as ordered by this Court in the said judgment but also all the attendant benefits as given to Central Government Pensioners.
3. The modalities of implementation of the Supreme Court order dated 01.05.1998 have been under active consideration of the Government. The President is now pleased to decide that the beneficiaries of the Supreme Court judgment 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 OM No.4/3/86-P&PW(D), dated 13.01.1998 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:-
(I) Revision of the restored amount of 1/3rd commuted portion of pension as per the Liberalized Pension Formula of 1979/ Fourth – Fifth Central Pay Commission’s recommendations where permanent absorption in the PSU/ autonomous body had taken place prior to 31.03.1979.
(a) In such cases, the basic pension that was sanctioned at the time of absorption should be first notionally revised as per the Liberalized Pension Formula of 1979. For this purpose, the Ready Reckoner prescribed under Department of Expenditure OM No.F.1(3)-EV/83, dated 22.10.1983 should be made use of. After the basic pension has been notionally revised, 1/3rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 01.04.1985, 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 notionally revised as in (a) above should be further notionally rationalized 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 Department’s OM No.2/1/87-PIC, dated 16.04.1987 should be made use of. After the revised notional basic pension has been calculated, 1/3rd portion of such pension should be worked out and shall be payable in lieu of the amount arrived at (a) above w.e.f. 01.01.1986 or 15 years from the date of commutation whichever is later. Administrative Ministries/ Departments may please refer to Table-II of Annexure-1 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’s OM No.45/86/97-P&PW(A)-Part.II, dated 27.10.1997 should be made use of. After the notional basic pension has been so calculated, 1/3rd portion of such pension should be worked out and shall be payable in lieu of the amount arrived at (b) above w.e.f. 01.01.1996 or 15 years from the date of commutation, whichever is later. Administrative Ministries/ Departments may please refer to Table-III of Annexure-1 of the enclosed specimen for guidance.
(II) Revision of the restored amount of 1/3rd commuted portion of pension as per the recommendations made by the Fourth & Fifth Central Pay Commission where permanent absorption in a PSU/ autonomous body has taken place on or after 01.04.1979 but prior to 01.01.1986:
(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 Centre Pay Commission based on the Table prescribed under this Department’s OM No.2/1/87-PIC-I, dated 16.04.1987. Thereafter, 1/3rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 01.01.1986 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. 01.01.1996 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 OM No.45/86/97-P&PW(A)Part-II, dated 27.10.1997 should be made use of. Thereafter 1/3rd portion of such pension should be workout and shall be payable in lieu of the amount arrived at (a) above w.e.f. 01.01.1996 or 15 years from the date of commutation, whichever is later. Administrative Ministries/ Departments may please refer to Table-III of Annexure-1 of the enclosed specimen for guidance.
(III) 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 01.01.1986 but prior to 31.03.1995.
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 OM No.45/86/97-P&PW(A)-Part-II, dated 27.10.1997. Thereafter, 1/3rd portion of such pension should be worked out and restored after 15 years from the date of commutation or 01.01.1996, whichever is later. Administrative Ministries/ Departments may refer to Table-III of Annexure-1 of the specimen for guidance.
(IV) Revision of the restored amount of 1/3rd commuted portion of pension of pre-1986 absorbed employees as per the provisions contained in Department of Pension & Pensioners’ Welfare OM No.45/86/97-P&PW(A)-Part-III, dated the 10.02.1998.
(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 OM dated 10.02.1998 and its 1/3rd component worked out and shall be payable in lieu of the amount arrived at (I) and (II) above w.e.f. 01.01.1996 or 15 years from the date of commutation, whichever is later.
(b) Revision of pension in terms of paragraph I(c) and III(b) shall be necessary in cases where implementation of the OM dated 10.02.1998 is likely to take some time 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 1/3rd 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 1/3rd commuted portion of pension to the absorbed employees immediately. Thereafter actions should be taken to implement the directions contained in the OM dated 10.02.1998 without any further delay.
4. Dearness relief on the restored amount of1/3rd 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 DR has been released by the Government to its pensioners during the period from 01.04.1985 to 01.01.1998 has been indicated in Annexure-II.
5. Payment of DR 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 and 01.04.1985 at the same rate at which IR has been made admissible to Central Government Pensioners viz.
IR-I: Rs.50 per month w.e.f. 01.04.1995
IR-II: 10% of the restored amount of 1/3rd commuted pension or Rs.50, whichever is more, w.e.f. 01.04.1995.
7. Arrears on account of IR shall be payable provided the absorbed employees has become entitled to restoration of 1/3rd commuted portion of pension as on 01.04.1995. Where the 1/3rd commuted portion of pension become due for restoration during the period from 01.04.1995 to 31.12.1995, arrears on account of IR shall be admissible for the relevant period only, Payment of arrears of IR 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. IR will 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 1/3rd commuted portion of pension shall be admissible from the date the commuted portion of pension is restored.
9. In sofar as extension of family pension benefit 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 OM No.1/18/86-P&PW(D), dated 22.01.1990 such cases are required to be examined in accordance with the instructions contained in the Department of Expenditure OM No.4(10)-EV(B)/77, dated 10.07.1978 and this Departments OM No.1/3/85-Pension Unit, dated 20.09.1985. 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 & 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 than prescribed under the rules etc. It is for the administrative Ministry etc. to examine each case and authorize family pension in the PPO provided the request is covered by the instructions contained in the Office Memoranda dated 10.07.1978 and 20.09.1985.
10. Where the death of an absorbee has taken place after 15 years from the date of commutation of pension or 01.04.1985 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 authorization of payment, they should clearly superscribe the PPOs as PSU/ autonomous body absorbees’ and also suitable indicate the originally sanctioned 1/3rd 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 1/3rd commuted portion of pension, DR/IR on such pension and issue necessary sanction through the normal channel viz. CPAO for its payment by the Bank/ 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 OM No.4/3/86-P&PW(D), dated 30.09.1996 and 13.01.1998 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 1/3rd commuted value of pension at the rate prescribed by the Government from time to time. The DR table prescribed by this Department from time to time will not be applicable in the case of absorbed employees whose restored amount of 1/3rd 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 OM No.F1(3)-EV/83, dated 22.10.1983, para 10(a) of this Department’s OM No.2/1/87-PIC-1, dated 16.04.1987, para 7(a) of this Department’s OM No.45/86/97-P&PW(A)-Part-II, dated 27.10.1997 and para 19(a) of the OM No.45/86/97-P&PW(A)-Part-III, dated 10.02.1998 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 UO No.C-45/EV/98, dated 03.07.1998.
Download Railway Board Circular RBE No.185/1998
Forward reference ⇒ RBE No.40/2016,