Default Option could be on PFRDA's radar: Swarup

Mumbai, Nov 19 (PTI) Pension Fund Regulator PFRDA is considering a fifth option for investment of contribution made by government employees under the new pension scheme.
Called Default Option, it is a life-cycle fund under which the amount of money invested in equity would be more in the initial stages while in the later stages, more money would be invested in debt instruments.

"We are considering the Default Option which is a life-cycle fund. The Deepak Parekh committee which is looking at various investment plans for pension scheme is also considering this option. The committee is expected to submit the report by November 30," Pension Fund Regulatory and Development Authority (PFRDA) Chairman D Swarup told PTI.

"Once recommended PFRDA will take a view on it. It could be one of the options," he said.

The Default Option, which is more balanced, provides a return which is much more than the option where money is invested wholly in debt instruments but certainly gives less returns than high-risk fully equity-based investments.

"Default Option has become a global trend. It is a future pension plan. In a country like India where financial literacy is very low and there is an inability to sense future risks, Default Option will be an appropriate option," LIC Pension Fund Chief Executive Officer, H Sadhak, said. PTI

Mockery of Low paid staff by 6th Pay Commission

I do not know that how many of you are getting real picture of 6th pay commission implementation. But as far as my experience says it is quite socking to Low paid staff. why?
(1) 6th CPC say they maintain the ratio of 1:12 between lowest & Highest. Tell me whether the difference between 5740 (or 10000) (min)& 75000 (max) is same as compared difference between 2550(min) & 26000(max).
(2) Previously the difference of increment between lowest & highest paid staff is only Rs 595 which is fixed, Now it is 2200 & it will increase with time.
(3) On promotion there is no more protection of lowest basic attached with post except when there is change of pay band. So what is happening is that on many time low paid employee will get lower basic on promotion when compared to fixation under 5th pay commission. While on the other hand if a highly paid staff supposedly get promotion after 4/5 Yr of service from 12000-375-18000 (PB3) to 14300-300-18300(PB4) he will get minimum salary of 37400+8700. A minimum jump of over 10000 on promotion. Even if the promotion is from PB1 to PB2 or PB2 to PB3 the promotional jump is negligible when compared to promotion from PB3 to PB4.(Particularly where time frame is fixed for promotion)
(4) The difference of minimum to maximum TA is now becomes 2800+DA compared to earlier 775 .
(5) For each BP + DP in the pre revised scale there is a corresponding pay in the corresponding pay band. Grade pay is added to this figure to arrive at the new basic pay. Revised pay in the pay band is a multiple of the previous BP + DP. This multiplication factor should be the same for all. Then only we can say that there is a common yard stick used in the 6 cpc implementation. But unfortunately it is not done that way. There is a lot of anomaly as I am listing down below.

Previous BP ----- Revised Pay ----- Multiplication Factor used
---------------------in Pay Band
10200 ------------- 18980 ---------------------------- 1.86
12400 ------------- 23070 ---------------------------- 1.86
14325 ------------- 26650 ---------------------------- 1.86
12000 ------------- 22320 ---------------------------- 1.86
14625 ------------- 27210 ---------------------------- 1.86

14300 ------------- 37400 ------------------2.62 - in the grade Rs 14300 - Rs 18300

You can see that all lower ranking people are given a multiplication factor 0f 1.86, while as higher ranking people get 2.62. This is a gross injustice done to all lower ranking employees in Government service. If at all it is different it should be higher for lower ranking people and not the other way.

As an example, a person with a prerevised basic pay of Rs 5000/-, has his pay revised to Rs 9300/- plus grade pay (multiplication factor of 1.86). If he is given the same treatment as higher ranking people his revised pay should become Rs 13,100/- plus grade pay (multiplication factor of 2.62); a difference of Rs 3800/- in basic pay itself. This is the type of injustice done to all lower ranking people by 6 cpc. The effect to others are

Previous BP --- Revised BP ---Deserving pay ----Revised BP is less by
4000 --------------------- 9840 --------------------12880 --------------------- 3040
5000 -------------------- 12100 ------------------- 15900 --------------------- 3800
6050 -------------------- 15460 ------------------- 20060 --------------------- 4600
7100 -------------------- 17410 ------------------- 22810 --------------------- 5400
8125 -------------------- 19720 ------------------- 25890 --------------------- 6170
9100 -------------------- 22330 ------------------- 29250 --------------------- 6920
10200 ------------------- 24380 ------------------- 32130 --------------------- 7750
11950 ------------------- 28830 ------------------- 37910 --------------------- 9080
13125 ------------------- 32020 ------------------- 41990 --------------------- 9970
14250 ------------------- 34110 ------------------- 44940 --------------------- 10830

14300 -------- 46100 --------------- 46100 ---------0 - in the grade Rs 14300 - Rs 18300

It is clear that a lower official s lose an amount between Rs 3000/- and Rs 12000/- per month in Basic pay.