Social Security Schemes: Does Pension Really Serve the Purpose?

Ramalingam By Ramalingam, 27th Jun 2012 | Follow this author | RSS Feed
Posted in Wikinut>Money>Pensions

Though pension is hailed as a great relief under the social security scheme, it is far from reality.

The struggle of Pensioners

Social Security Schemes: Does Pension Really Serve the Purpose?

Pension, death cum retirement gratuity and leave salary etc are the mainstay of retiring people. Thanks to the many social security schemes launched in the late 18 th and 19 th centuries and the enactment of many labor laws based on these social security schemes.

Among the social security schemes, while gratuity and leave salary etc are one time payments at the time of retirement of the employees, pension is the perennial source of income for the retired people and their families.

In countries such as India, central government employees that include defense, railways, telephone, postal, income tax, audit and accounts service and scores of other central government departments,when retire get pension from the central government through consolidated funds of India.

Various public sector organizations pay pension to their retiring employees through a different scheme known as Contributory Pension Fund (CPF).

State Governments pay pension to their employees almost on the pattern of central government servants but out of their allotted plan lay out.

While all the above mentioned pension schemes are based on the service rendered by a retiring employee, state governments have devised a scheme known as Old Age Pension Scheme for which people's unemployment, poverty and old age are the criteria.

The retired people are getting pension commensurate with their last drawn pay scales, total number of years of service rendered by them and class of employment they held. Hence pensions drawn by retired people may vary. Whereas, the populist old age pension schemes pay a fixed pension say Rs 1,000/- regardless of their age. While regular pensioners may get periodical hikes through dearness allowance and revision during implementation of new pay scales consequent to the appointment of a new pay commission, old age pensioners are at the mercy of a state government for their pension hikes, if any.

While the central as well as the state governments have stipulated a smallest number of years of qualifying service that enables the retiring employees to get their pension, in the case of getting old age pension, age is the main criteria.

When pensioners have specific grievances, they are resolved through periodical pension adalats held by the central and state governments.

Despite getting pension, the pensioners are not happy. Considering the heavy amount the pensioners may have to spend for their medical expenses such as getting treatment for diabetes, heart ailments, ailments of old age etc, their pension amount is far from adequate. While the ill-equipped Central Government Health Centers are available only in selected cities, rural pensioners suffer like anything. Besides, the meager medical allowance they get say Rs 100 or 200 is also inadequate to consult a specialist in this age of specialisation.Above all since a pensioner is getting pension based on his service rendered, position held etc, it does not take into account the number of dependents of the pensioner.

Besides, in the ever increasing price hike of the essential commodities,the pensioners are always running deficit budgets.The dearness allowance granted once in six months that too rather belatedly compound their financial woes,because, by that time a new price hike will be raising its ugly head.Therefore, a pensioner is always struggling to meet his both ends..

Hence a pensioner has to eke out his livelihood within his limited resources just like a prisoner regardless of the size of his family. Again it is an irony while a pensioner is alive his dependents are not taken into account. However, after the death of the pensioner, his or her spouse becomes eligible to draw the family pension at a reduced rate, say only 50 % of the pension drawn by the retired employee. It simply defies logic. Though we generally consider a wife a better half, for the purpose of getting family pension she becomes a bitter half. After the death of the wife, the family pension becomes payable to the unemployed wards of the deceased retired employee until they attain a specific age.

In England, since the pensioners are living alone and not taken care of by their wards, one out of eight pensioners has to sell his own home to meet his heavy medical expenses he incurs in his old age. Thus the dignity of the aged pensioners undergoes a severe test.

However in countries like Austria, pensioners have separate tariff system for their mobile phones.It shows that the Government pays special attention to pensioners.

In India, when pensioners become senior citizens by completing 60 years, they can have railway tickets in reduced fare, say by 40 %.Banks offer increased rate of interest, say by half percent for their deposits.

Similarly former member of parliaments or legislative assemblies draw pension provided they had completed a smallest number of years of service as an MP or MLA.

Thus, while the large section of pensioners are struggling to eke out their livelihood and to meet their both ends throughout the world countries, they are extended only a few fringe benefits at the fag-end of their life.


Fag-End, Family, Old Age Pension, Pension, Politicians, Qualifying, Security, Service, Social

Meet the author

author avatar Ramalingam
I am a freelancer and practicing lawyer.I am interested in writing articles with special reference to legal topics, history and society.

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author avatar M G Singh
8th Jul 2012 (#)

Very thoughtful. Good points brought out

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author avatar R.RAVI
11th Jul 2012 (#)

Old age is problem.Pension atleast help for food or medicine.

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author avatar Ramalingam
11th Jul 2012 (#)

Thanks for your comments.

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author avatar A K Rao
22nd Jul 2012 (#)

Money can buy the physical needs of a Human being but not the emotins, love and affections which is a most important thing for the old people! Nice article! Thanks !

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