Government Petitions Regarding Pension dismissed by Supreme Court:-

I’m going to give you information on government petitions that the Supreme Court of Pakistan (SCP) dismissed regarding pensions. The Government petition was denied after the Supreme Court of Pakistan affirmed the FST Judgment. The specifics are as follows:

Govt Petitions Regarding Pension Dismissed by Supreme Court

Constitutional Petitions for Leave to Appeal [CPLA] No.1243/2022 etc., filed by the Government of Pakistan in opposition to the rulings issued by the Federal Service Tribunal Islamabad in Appeal No.1327(R)/CS/2020 etc. on January 12, 2022, were dismissed by the Supreme Court [SC] of Pakistan on August 5, 2022. The end of the article contains a copy of the SC orders that were issued in September 2022.

Constitutional Petitions for Leave to Appeal [CPLA] No.1243/2022 etc., filed by the Government of Pakistan in opposition to the rulings issued by the Federal Service Tribunal Islamabad in Appeal No.1327(R)/CS/2020 etc. on January 12, 2022, were dismissed by the Supreme Court [SC] of Pakistan on August 5, 2022. The end of the article contains a copy of the SC orders that were issued in September 2022.

Prior to 2001, pensioners had filed an appeal with the Federal Service Tribunal (FST) requesting that it order the government to continue paying pension increases on Gross Pension in accordance with the 1994 (pre-2001) pay scale rulings. They claimed that the Government had wrongfully imposed the 2001 pay scales and pension system on them (which went into effect on December 1, 2001), refusing an increase on the relinquished or commuted portion of the pension, which was resulting in losses. The Federal Service Tribunal determined that the aforementioned retirees had acquired the vested right to have their pensions calculated using the pay scales in 1994 and ordered the government to pay their pension contributions using that exact formula for gross pension. The government then brought many CPLAs to challenge the FST orders.

SCP Hearing and FST Orders

On August 5, 2022, the Supreme Court heard the CPsLA and upheld Federal Service Tribunal rulings that pensioners have a vested right to be handled according to the same (pre-2001) regulations as those that had allowed them to qualify for a pension. The Supreme Court noted that the Tribunal is the highest forum for determining facts and that it can only take up a case if it involves a material question of law of public interest. Since the petitions did not specify any such serious matter of law, they were rejected, and leave was also denied.

You may recall that up until (and including) 1.7.1999, pension increases were paid based on the sum of (a) the gross pension (before surrender or commutation) plus (b) all prior increases. Since 1.12.2001, pension increases have only been permitted on (c) Net Pension (gross pension less relinquished or commuted share) plus (d) prior increases. This practice was imposed on pensioners who had retired in 1994 (and other pre-2001) pay scales and under pertinent pension regulations and orders through Paragraph 16 (f) of Finance Division O.M. No. F.1 (5) Imp/2001 dated 4.9.2001. According to the aforementioned sub-paragraph, “In the future, the increase to the pensioners shall be allowed on Net Pension, instead of Gross Pension.”

Pre-2021 Pensioners

According to the pre-2001 pensioners, they still have a right to increases to their gross pension plus prior increases. Only those individuals who: are subject to the shift [from increases on Gross Pension to increases in Net Pension].

either began working for the government on or after January 1, 2001; chose the 2001 pay scales and cumulative pension plan; or retired on or after July 1, 2001, but chose the 2001 plan.

Pre-2001 pensioners repeatedly asked the Finance Division to continue raising the Gross Pension plus prior increases, but they were denied. Then, the disgruntled pensioners appealed to the Federal Service Tribunal for appropriate guidance to the executive branch. Following FST’s acceptance of their appeals, the government was instructed to keep granting increases to the pre-2001 retirees receiving a gross pension.

The refusal of increases on the commuted portion of pension from 1.12.2001 till the date of restoration resulted from imposing the 2001 scheme on the pre-2001 pensioners. The actual short payment of pension remained from 1.12.2001 until the date of restoration, despite the government later permitting such increases on a nominal basis starting from that date.

Mr. X, a pensioner, reveals how his pension was incorrectly calculated on Net Pension (instead of Gross Pension) for the period from 1.12.2001 to 7.5.102. He retired on August 8, 1997, receiving a gross pension of Rs. 14,499, and had his 50% pension commuted; this benefit was reinstated on August 8, 2012. The pension amounts shown in Table 1 below are those that would have been paid if all of the increases from 2001 to 2011 had been permitted on Gross Pension (including Net and Commuted portions).

able – 1

9. Due to illegal enforcement of the 2001 pay scales cum pension scheme on the 1994 and other pre-2001 pensioners, Mr. X was paid all increases from 2001 to 2011 on Net Pension only (denied / Not paid on the Commuted part of a pension). This led to a short payment of pension to Mr. X from 2001 to 2011, as detailed in Table 2 below.

                                                            Table – 2

10. The increase for 1999 in row 2 of the above table was given on Gross Pension (on both Net and Commuted parts). Increases totaling Rs.27,011.18 as per row 3 were given from 2001 onward also on Net Pension plus previous increases.  However, an increase of Rs.4,501,86 (as per row 3 only) was given on the 1999 increase of Rs.1,449.90 only.  It was not given on commuted Rs.7,249.50.  The short paid Rs.22,509.32 [27,011.18 less 4,501.86] on the commuted part was the cumulative effect of increases denied on the Commuted part, as follows:

11. Mr. X and several hundred equally placed pensioners now expect that increases on Commuted pension will be given actually (instead of on a notional/presumptive basis only) by the government.