New Delhi: Around 5.5 lakh pensioners of public sector coal companies have seen their pension amount remaining unchanged for the past 25 years, the All India Coal Pensioners Association (AICPA) has said, adding that they have been protesting against the issue and will again hold a dharna over it on 27 March.
Apart from an enhancement of pension, the pensioners are also demanding the provision of dearness relief to account for inflation, and the imposition of a cess on the sale of coal to fund this.
The AICPA had earlier organised similar dharnas at Jantar Mantar in New Delhi in December 2019, July 2022 and December 2022.
The rules relating to the pension due to the workers of Coal India, Singareni Collieries Company Limited, and several other public sector coal companies are laid out in the Coal Mines Pensions Scheme (CMPS) 1998, which came into effect on 31 March that year.
According to the rules, pensioners are to be paid 25 per cent of their average emoluments, with the payout also based on the length of their employment.
The payments are to be made from a pension fund under the Coal Mines Provident Fund Organisation (CMPFO). Contributions to the pension fund are made by employees from their salaries, and from the employer.
The rules state that the commissioner of the CMPFO should review the pension fund every three years, and can recommend its enhancement, revise the pension payments, and also revise the contribution amount. However, while the contribution amount has been revised since the rules were put in place, the pension payments have not been revised even once.
“Despite the rules saying that the pension scheme should be revised every three years, it has not been revised even once since 1998 when it was launched,” P.K. Singh Rathore, convener of AICPA, told ThePrint.
The AICPA is the umbrella body under which the dharna on 27 March will be held.
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No revision since 1998
“If, for example, a pensioner received Rs 1,000 per month in 1998 as per the scheme, then they are still receiving that same amount even now,” Rathore explained.
“Rs 1,000 back then might have been a comfortable amount, but the real value now, after taking into account inflation, is only about Rs 200-300 per month, which is not enough to even cover basics like food. This is even lower than the amount the government is giving those below the poverty line,” he added.
According to him, there are approximately 5.5 lakh coal pensioners in the country, of which about 50,000 are receiving less than Rs 500 per month as pension.
That the pension amount has not been revised was confirmed by coal minister Pralhad Joshi to the Lok Sabha on 8 February, although he said this is because of the way the scheme has been designed.
“No revision has taken place in the pension provided to retired employees of Singareni Collieries and other coal companies covered under Coal Miners Pensions Scheme 1998 since it came into force on 31st day of March, 1998, due to wide gap between contribution to the fund and pension disbursement,” Joshi said in a written answer to a question.
“When the pension fund permits, BoT (Board of Trustees of CMPFO) on the recommendation of an actuary and with the approval of the Central Government may amend the rates of contribution payable under the Scheme or the scale of any benefits admissible or the period for which such benefit may be allowed,” he added.
Board of Trustees blocks enhanced contribution
According to the minister, while the actuarial report was placed before the BoT several times, it was rejected each time.
“Due to the resistance by the Central Trade Union representatives, who are also members of the BoT, the recommendation of the actuary to enhance pension contribution could not be implemented,” Joshi’s written reply stated.
In fact, in a 2021 reply to the Public Accounts Committee (PAC) attached to the coal ministry, which had raised several key issues with the functioning of the CMPFO, the ministry said the actuary’s report was raised before the BoT 13 times between 2005 and 2015, but to no avail.
The resistance to the recommendations of the actuary centred around the suggestion to increase the contributions of the employees so that the contribution to the pension fund could at least match the amount that needed to be disbursed.
“The trade unions on the BoT made it a political issue, saying it was an injustice to take away the salaries of the employees in such a manner,” a retired official, who was in a senior position and present during these discussions, told ThePrint.
Amrit Lal Meena, secretary in the coal ministry, told ThePrint: “The Board of Trustees of the CMPFO is the competent body that looks at the pension fund as well as the provident fund. Whatever the entitlement is according to the norms is being given. If there are any additional issues, those can be taken up with the Board of Trustees and they will look into it.”
Breakthrough following CAG audit
In 2017, there was a breakthrough, and the contribution to the pension fund was increased to 14 per cent from the erstwhile 4.91 per cent, with effect from 1 October, 2017.
Here, too, the upward revision of the contribution amount was done after the Comptroller and Auditor General (CAG) of India found irregularities in the financial affairs of the CMPFO.
According to the CAG’s report for the year ending March 2016, it had not only found that the non-implementation of the actuary’s recommendations had led to an “acute deficit” in the pension fund, but also that there had been an “incorrect diversion” of funds from the provident fund account to the pension fund.
This, the coal ministry said in its reply to the PAC, was done because it had “no other option” but to borrow funds from the provident fund to finance the growing deficit in the pension fund.
Since it was a general transfer of funds from one account to another account of the same organisation, and the amount would be returned with interest to the provident fund, “no irregularity was construed” by the ministry, it said.
“However, after CAG audit in its Report 12 of 2017 pointed out that the said diversion of funds was a financial irregularity, the ministry immediately impressed upon the members of the BoT to resolve the issue and pension fund contribution was enhanced to 14 per cent from a meagre 4.91 per cent,” the coal ministry stated in its action taken report to the PAC.
‘Insufficient change’
According to the pensioners, the change in contribution is insufficient because it does not address the fact that past pensioners haven’t seen their pensions being revised at all.
“The coal pensioners are compelled to stage this dharna at Varanasi on 27 March, 2023, for hastening appropriate decision-making process to allow fulfilment of… demands which have been denied,” the AICPA said in a release Sunday.
Among their demands is the incorporation of a dearness relief component as part of pension to “ensure equitable pension irrespective of retirement date”.
Another major demand is the collection of a cess of Rs 20 per tonne of coal sold by all government and private coal companies, and linking this cess as a percentage of the coal price “to take care of future enhancement of pension linked with Dearness Relief”.
A coal ministry official, who did not wish to be named, said the issue of dearness relief was a new one that the pensioners had raised and had not been mentioned in the last meeting of the BoT that took place earlier this month.
Other demands include adhering to the provisions of the CMPS 1998 and revising the pension every three years.
(Edited by Nida Fatima Siddiqui)
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