Pension

The concept of pension originated as compensation to retired employees including members of the armed forces or their dependants, for old age, death or disability. The basic idea is to provide a sense of security and independence to the retired employee, and to make the service efficient. Article 39 (a) of the Constitution of India introduced the directive to the State to secure to its citizens “adequate means of livelihood.” If such citizen is an employee of the State, “it inheres in the concept of such a provision (pension) that it should be adequate Report of the Fourth Central Pay Commission Part II “Pension”, Paragraphs 2.16 & 2.17.” The object of pension is that even in retirement, the pensioner may live and maintain a standard of living considered reasonable by the society where he belongs. For this purpose costs of living adjustments to neutralise the increase in prices have to be made. This neutralisation of the erosion of the pensioner’s buying capacity by payment of additional relief is a part of the concept of pension. The Fourth Pay Commission, aware that the concept of pension is not static, described the costs of living adjustments’ which is another name for the relief on pension, as “a necessary concomitant of the very concept of pensionary benefits. Report of the Fourth Central Pay Commission Part II “Pension”, Paragraphs 2.16 & 2.17.”

Having summarised the concept of pension, I will now state its legal character enunciated by the Supreme Court.

Once rules in regard to pension are framed receipt of pension within the rules is a legal right. D.S. Nakara and Others Vs. Union of India (UOI), Pension is a determined amount of money payable to an employee upon retirement or to a dependant upon the death of the employee in consideration of the past services. Pension has two objects. Firstly, it rewards the past service and secondly it is intended to save the employee from destitution in old age. It follows therefore that the pension is intended to ensure that the pensioner would (i) be able to live (ii) free from want, with decency, independence and self respect and (iii) at a standard nearly equal to his pre-retirement standard of living. D.S. Nakara and Others Vs. Union of India (UOI),

Again, pension is property of the retired employee. Deokinandan Prasad Vs. The State of Bihar and Others, Consider the concept of pension and its purpose enunciated by D.S. Nakara and Others Vs. Union of India (UOI), and its legal character as property laid down in Deokinandan Prasad Vs. The State of Bihar and Others, What emerges is the true picture of pension, as the amount intended to be adequate to enable the retired employee to live free from want, with decency, independence and self respect and at a standard nearly equivalent to that at the pre-retirement level. It is reasonable to hold that the Central Government intended that the pensioner continues to receive pension with all its attributes declared in D.S. Nakara and Others Vs. Union of India (UOI), case.