70,000 Pensioners Seek LIC Action On Delayed Payments

The General Insurance Pensioners All India Federation has taken a firm stand, citing legal precedents and demanding not only timely payments but also compensation for the hardship faced by pensioners

General Insurance Pensioners All India Federation, which is the largest association of pensioners of general insurance industry, has served a notice to Life Insurance Corporation of India on delay in disbursement of pension to 70,000-odd retired employees from all the four state-run general insurance companies.

In its missive dated March 08, the federation has urged LIC to expedite the disbursement of due pension amount to all the eligible pensioner.

The government of India notified General Insurance (Employees’) Pension scheme, 1995 (hereinafter referred to as ‘the pensions scheme’) on June 28, 1995 and as per Regulation 13(a) of pension scheme, the Trust shall purchase immediate annuities from the LIC in respect of each employee or his family, as the case may be, at the time of he or his family becomes eligible for the benefits under this scheme or, in respect of family pension, on his death.

By this clause, it is the responsibility of LIC to release monthly pension/family pension on last working day of the month or on the first day of the following month.

Talking to Bizz Buzz, Anil Bhandari, the legal secretary of the Federation, said, “In the month of January/February nearly 2,256 pensioners did not receive their monthly pension till 5th of the month and 800 pensioners of The Oriental Insurance Company did not receive pension even by February 09.”

Therefore, it became difficult for them to meet with their day-to-day expenses. Such a delay in payment of pension is due to improper working of your officers, he said.

Supreme Court in the case of SK Dua vs State of Haryana has held that if there is no specific rule or order providing for interest, then also relief can be claimed on the basis of Article 14, 19, and 21 of the Constitution of India, because, retiral benefits are not a bounty. Since delay in payment of monthly pension has been caused due to inaction of LIC, and pensioners have earned interest on the funds, therefore, LIC is liable to make payment of interest on the delayed payment to the concerned pensioners along with monthly pension of March, 2025.

The aforesaid pensioners are also entitled for payment of damages/compensation of Rs 1,000 per day for the days of delay in payment of pension beyond the first day of the month towards the hardship, harassment and trauma suffered by them due to non-receipt of pension in time.

A source familiar with the development, requesting anonymity, said that the reason behind the delay in disbursement of the pension was that as per the existing system, LIC makes pension payment to the retired employees through the respective corporate offices of the state-run general insurers, which are located at four different places in the country. While Oriental is headquartered at New Delhi and United is at Chennai, New India and National are having their corporate offices at Mumbai and Kolkata respectively. However, LIC is currently busy in the centralisation of the system and hence the delay.

The Federation, through the notice dated March 08, 2025, has called upon the MD and CEO of LIC by this notice for demand of justice to release interest on the delayed payment of monthly pension/family pension along with monthly pension of March. Moreover, it has urged him to ensure timely payment of monthly pension/family pension i.e. on the last working day of the month when pension becomes due or at least by first day of the following month in future.