Clarification of the Concept of Double Pension & Restoration of Pension

Understanding the Concept of Double Pension

Let’s understand clearly from the very start that service tribunals and courts simply issue those orders which in their opinion are supported by relevant service laws.  Pension matters are also dealt with by tribunals and courts under the relevant legal provisions about pension.

And let us further appreciate that there are no such provisions in any pension rules and regulations that upon reaching the age of 75, the amount of pension would be doubled.  Yes, if a pensioner retired before 1.12.1001 at the age of 60, and if no increases were allowed for 15 years, only then the pension would be doubled when the pensioner is 75.

Restoration of Pension With View of History

One has to go back to amendment made in 1985 in pension regulations to appreciate the benefit recently granted to pensioners by service tribunals / high court (upheld by the Supreme Court too, through rejecting government appeals against those orders).

Before O.M. No. F.10 (8)-Reg. (6)/85 was issued on 25 June 1985 by the Ministry of Finance, surrender of pension against gratuity or commutation was absolute i.e. final and irreversible.  Pensioner would receive lump sum in advance as the consideration for surrendering 25% or 50% of pension for good, and would continue to receive net pension (amount remaining after reducing surrendered amount from gross amount of pension).

Pension benefits were liberalized through the 25 June 1985 orders which allowed the surrendered part (previously forgone for good) to be restored (added back to net pension).  This benefit, effective from 1.7.1985, was to materialize on expiry of the period for which the pension was surrendered.

At one stage this benefit was withdrawn in June 1995, but the withdrawal letter was itself withdrawn ab initio in September 1995, and the benefit continued to be availed by all pensioners till some of the government servants opted for the 2001 payscales-cum-pension scheme.

Scheme of Revised Pay Scales 2001 & Restoration of Pension

The 2001 pay scales-cum-pension scheme, introduced by Finance Division through O.M. No. F.1 (5) IMP/2001 dated 4 September 2001 envisaged that benefit of pension restoration would not be admissible to the opting government servants.   All government servants were given the choice either to opt the 2001 payscales-cum-pension scheme, or to retain the old 94 scales and then existing pension benefits.  In view of immediate benefit in pay and resultant benefit in pension amount, most of the public servants opted for the 2001 payscales-cum-pension scheme.  They thus accepted in writing that commuted part of their pension would never be restored.

The 2001 pay scales were to take effect from 1.12.2001.  However, persons retiring between 1.7.2001 and 30.11.2001 were also given the option either to get pension in 1994 pay scales and continue to avail the restoration benefit or to opt for the 2001 scheme.

The 2001 scheme further envisaged that pension increases from 2001 onwards would be admissible to all current and future pensioners on Net (Gross less surrendered) pension only.  Earlier increases were granted on the Gross pension.  Accordingly, existing pensioners also stopped receiving increase on commuted part of pension from 1.12.2001, though their title to restoration continued.

Court Decisions & Restoration of Pension

Federal Service Tribunal ordered on an appeal that the increases in pension (not granted from 2001 onwards on commuted part of pension) should also be granted from date of restoration (of commuted part).  It was argued in the appeal that upon restoration of 50% commuted pension, both halves of pension, enhanced through various increases, should be at par (equal).  It was against the norms of justice for one half of pension to be less than the other half.

Later, in many other cases, Lahore High Court and Service Tribunal upheld similar cases.  However, in all cases, the benefit was allowed with effect from date of restoration, and no arrears before that date were allowed.

Example of the Restoration of Pension

In order to illustrate how the two halves of pensions [the commuted one, and the Net one (after commutation)] would not be at par [unless all increases are also given on commuted part] please see the following example.  A gross pension of Rs.200 is taken in this example and the pensioner got 50% of his gross pension (Rs.100) commuted upon retirement on 1.6.1996

			1.6.1996
	Gross Pension					Rs.200
	Commuted for 15 years					Rs.100
	Net Pension - 1.6.1996					Rs.100
	Restored on					1.6.2011
From date	Effect of increases up to restoration date
	Un-Commuted (Net)  Part					Commuted Part
	Before	Increase		After		Before	Increase		After
	Rs	%	Rs	Rs		Rs	%	Rs	Rs
1.7.97	100	10	10	110		100	10	10	110
1.7.99	110	25	28	138		110	25	28	138
1.12.01	138	5	7	144		28	5	1	29
1.7.03	144	15	22	166		29	15	4	34
1.7.04	166	8	13	179		34	8	3	37
1.7.05	179	10	18	197		37	10	4	40
1.7.06	197	15	30	227		40	15	6	46
1.7.07	227	20	45	272		46	20	9	55
1.7.08	272	20	54	327		55	20	11	67
1.7.09	327	20	65	392		67	20	13	80
1.7.10	392	20	78	470		80	21	17	97
1.6.11	Total increase		370			Total increase		106

As illustrated in the above example, increases for 1997 and 1999 were given on gross (both halves of the pension), whereas increases from 2001 to 2010 were given only on Net pension.

Net effect of 2001 orders can be seen from bottom line in the example showing total of increases up to 1.6.2011 as Rs.370 on un-commuted half of pension while it was only Rs.106 on the commuted half of pension.  High court / tribunal held that upon restoration, both halves of pension should be equal, and therefore increases should be allowed on commuted part of pension also upon restoration, though no arrears would be admissible before the restoration date.

Appeals and review petitions by government against the High Court and Tribunal orders were rejected by the Supreme Court of Pakistan.

The Supreme Court had earlier decided in certain cases that if a service matter involved many government servants; and some of them went into litigation while others did not, then the benefit (if allowed to the litigating government servants) would be applicable to those government servants also, who are equally placed, but did not go for litigation.

Keeping these orders of Supreme Court in view, Finance Division had ultimately to concede through O.M. No.F.13(13)-Reg.(6)/2011 dated 11 March 2013 that increases in pension [not granted on commuted part of pension from 2001 onwards], are to be allowed to all equally placed pensioners whose commuted part was later restored after 1.12.2001.

As explained in the example above, all those pensioners whose respective commuted part of pension has been restored after 1.12.2001, are now entitled to receive the difference between two halves of the pension, from the date of pension restoration.  No arrears prior to the restoration date are however admissible.
Request to the National Newspapers:
I also request to the National Newspapers to publish it for the benefit of many an old pensioner in their esteemed newspapers.
By: Mr. Agha Amir (Canada)

NOTE:  Thanks for Shumaila Kamal  for Provided above information for Employees