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Pension & DA
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Posts: 1,638
Joined: Nov 2008
Post: #1
Pension & DA
1. Dearer Dearness Allowance.

By raising the fitment formula from 1.74 to 1.86, the Govt has accepted the payment of DA on DP component upto 1-1-2006. However, subsequent DA revisions exclude this portion with the result that DA is reduced to 66% of what we are getting at old rate. Thus, instead of 12%, DA from 1-7-2006 should be 18%, The formula to be adopted should be -- Basic (100) plus DP (50) plus DA on BP + DP (i.e. 150% of 47% as on 1-1-08 (i.e. 70.5) = (Total 100+50+70.5)-186 = 34.5/186 = 18%. Otherwise, the loss will widen as DA increases and at a certain point of time, the entire Pay commission would be wiped out.

2. Pension.

In the present fitment formula, juniors who retired after 1-1-86 will get more pension than his senior retired before 1-1-2006 on same basic pay. This is because the pre-2006 pensioner gets only 40% in his fitment whereas his junior gets 50% of grade pay which is more than the former. The existing order to step up pension to 50% of minimum of pay is no longer valid as the revised pay (pay band plus grade pay) is lower than the sum of old Basic + 86% + Grade pay. The solution lies in granting 50% of grade pay instead of 40% of basic pension.

Author: P. Balan, Retired

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02-18-2009 10:04 AM
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