The politics of pay, pension and second pensions

ISLAMABAD: Under the Financial Rules in vogue since British times, officials who were re-employed after retirement were entitled to draw only a ‘pay differential.’ But during General Zia’s dictatorship, these rules were changed to allow full pay in addition to a pension to the re-employed.

Sources in the civil bureaucracy say that even ex-servicemen employed on civil posts were allowed by the Zia regime to draw a second pension after spending 10 years in the civil service.

A constitutional petition filed before the Supreme Court of Pakistan highlights the interesting case of the payment of a hefty pension to the Gilgit-Baltistan (GB) Supreme Appellate Court’s chief judge and two other judges, who are appointed on contract for only three years. A former judge of the Supreme Court of Pakistan, who had also served as chief judge of GB’s apex court, became entitled to two pensions. It is said that as chief judge of GB’s apex court he had issued orders for the entitlement of pensions for GB court judges after only three years of service.

Under the British era Financial Rules, which are still in vogue in India, a pension was admissible on completion of 30 years of pensionable service. On re-employment after normal retirement, officials would be entitled to draw only a pay differential of the minimum pay of the post minus one’s pension.

Until 1970, High Court judges were allowed a pension after a minimum of seven years of service. In 1970, General Yahya Khan reduced the period to five years, as per the recommendations of the CJP Shahab Commission Report of 1960, with permission to condone a deficiency of three months.

In Jan 2008, a PCO judge of the Sindh High Court quashed the minimum length of service restrictions imposed by the president pursuant to the Fifth Schedule of the Constitution to direct payment of pension to all judges who retired from 1970 onwards regardless of their length of service.

In May 2008, the PCO SCP promptly upheld that judgment. As a result, 70 retired judges (including those removed in March 1996 by the SCP for being unconstitutional appointees) with service ranging from 13 months to four years and eight months were paid Rs 3.85 billion as one-time arrears plus Rs 380 million as annual recurring payments.

In April 2013, a review filed against that judgment was accepted by a five-member bench. By a majority of 3:2 it allowed the ineligible retired judges to retain more than Rs 4 billion (which they had already received as pension). Two senior judges on the bench, however, considered the move as “un-Islamic and unconscionable by any standard”. A few more were asked to seek executive relief from the president which was also secured.

Sources said that in August 1973, Zulfikar Ali Bhutto reduced the period of minimum pensionable service for civil servants from 30 to 25 years. Later, General Zia permitted full pay of the post to the re-employed besides permitting ex-servicemen employed against civil posts to draw a second pension on rendering 10 years service in civil.

The sources said that in India, even the CEC, who is usually a retired IAS officer, is eligible to draw only a 'pay differential'. It was also pointed out that after the death of a pensioner, his wife and then (after her death) his unmarried daughter are entitled to his pension. According to a retired federal secretary, once a case of an 80-year-old pensioner was moved before him. The case was interesting as the old man had two wives -- one around 75 years old and the other barely 20 years of age. The ex-secretary said that he had calculated that in case the second wife lives for another 40 years, it would mean payment of pension for 60 years from the public kitty in just a single case!

The former secretary also said that once he had received a call from a 35-year-old lady doctor who told him that her brothers were not allowing her to marry because she was getting around Rs 80,000 per month as pension following the death of her father-- the pensioner.

Retired officers, whether former judges, generals or top civil bureaucrats, are currently serving in large numbers in government positions despite the fact that the law and rules regulating the bureaucracy are too strict to allow post-retirement jobs.

As per the law and policy, the civil bureaucracy extension could be given for a limited period in “very exceptional” cases where replacement of retired/retiring officers is not available.

Section 14 of the Civil Servants Act 1973, deals with the subject and reads: “Employment after retirement:1) A retired civil servant shall not be re-employed under the federal government, unless such re-employment is necessary in the public interest and is made with the prior approval of the authority next above the appointing authority: Provided that, where the appointing authority is the president, such re-employment may be ordered with the approval of the president.”

Under ED’s (Establishment Division’s) OM No 4/1/96-RI dated Nov 11, 1996, “As per existing policy of the Government, re-employment of retired civil servants beyond superannuation is not encouraged except in cases when a civil servant possesses such expertise that his services are irreplaceable.

2. The prime minister has been pleased to decide that requests for re-employment of ex-civil servants who have voluntarily retired from service shall be summarily rejected. Ministries/Divisions are advised not to initiate any such proposal in future.”

The Estacode also noted: “It has been noticed that Ministries/Divisions initiate proposals for re-employment of government servants after superannuation as a routine measure. It is emphasized that re-employment beyond superannuation should be an exception and not the rule. It may be recommended only in cases where the government considers that the experience gained by the retiring person is of vital importance and can be gainfully utilized, particularly in fields where suitably qualified and experienced persons are not available.

“2. For achievement of the objective mentioned above, the present government has framed a policy for re-employment of government servants and cases for re-employment would, in future, be considered in accordance with the following criteria: (i) Non-availability of suitably qualified or experienced officers to replace the retiring officer; (ii) the officer is a highly competent person with distinction in his profession/field; (iii) the re-employment does not cause a promotion block; and (iv) retention of the retiring officer, for a specified period, is in the public interest.

This policy would also apply to government-controlled corporations and other autonomous bodies.” The Estacode also contains the following direction: “Proposals for re-employment are required to be accompanied with the following documents/information:- (a) The proposal duly signed by Secretary or Additional Secretary Incharge of the ministry concerned is received in the Establishment Division six months before the officer is due to attain the age of superannuation and has the approval of the minister in-charge; (b) the steps taken to train the substitute, if any; (c) ACRs with photograph, ICP chart and bio-data on prescribed proforma; and (d) certificate that the officer is medically fit.”

While chosen officers are re-employed regularly and at any time, the generally ignored Estacode says: “If it is intended to get the retiring person re-employment on contract in the public interest to get his contract extended, a proposal in the form of a summary for the prime minister should be submitted to this (Establishment) Division about six months in advance from the date of his retirement from service/expiry of the contract so that Establishment Division could have sufficient time to process it properly.”

It adds: “The proposal for re-employment on contract/extension in contract should invariably contain the following information:- (a) A brief report on the performance of the officer during the period of his contract re-employment (only for the cases for extension in contract). (b) Certificate that the proposed re-employment/ extension in contract will not create a promotion blockade for the departmental officers. (c) Steps taken to train a substitute of the officer and a statement of circumstances in which no officer could be groomed to take up the assignment. 5. No request for grant of ex-post-facto approval to the contract re-employment/extension in contract, in any circumstances, will be entertained.”

Another ED’s OM of Dec 24, 1978 says, “It has time and again been stressed that the approval of the president would be necessary in all cases of re-employment after the age of superannuation in government as well as in the autonomous bodies…The age of superannuation of all government servants should be 60 years and this should apply equally to government-controlled corporations/ autonomous bodies etc.”

In yet another ED’s MO dated Dec 5, 1990, it is said: “The cabinet in its meeting held on 12-11-1990 has decided that no re-employment beyond the age of superannuation should be allowed except in very exceptional cases for which approval of the prime minister would need to be obtained.

2. This decision is also applicable to autonomous bodies/semi autonomous bodies and may please be brought to their notice for strict compliance.”