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Sarbajeet K. Sen

New Delhi , April 27

IN what may come as an unexpected bonanza for nearly 1,17,000 employees of Life Insurance Corporation (LIC), the Ministry of Finance today issued a notification allowing the corporation to go ahead with payment of performance linked lump-sum incentive (PLLI) for the year 2002-03.

The aggregate payment that LIC has been allowed to make through this route has been capped at 3 per cent of the total wage bill for the year. According to official sources, the total payout is expected to be in the region of Rs 40 crore.

Coming during the thick of elections, the notification has been issued by the Finance Ministry after formal approval from the Election Commission.

``We had referred the matter to the EC. We had to be certain that the issuance of the notification would not violate the EC guidelines for public sector units. The EC did not have any objection since the process of payment of PLLI by LIC has been an ongoing one for the past few years,'' senior Finance Ministry officials said.

Officials said that LIC would be free to make the payment whenever it wanted and would not have to wait for the completion of the election process. The amount to be disbursed would be divided proportionately among all the employees of the corporation.

For incentive payment under the head, the LIC employees are placed under four categories. While Class-III and IV employees come under one slab of payment, the Class-II employees come under a single slab whereas the Class-I officers are split into two slabs based on their seniority.

The system of annual payment of PLLI, which is intended to improve productivity of its staff, was started by LIC as part of the five-year wage settlement for the period August 1, 1997 to July 31, 2002.

The incentive is paid only if the Corporation's financial performance exceeds the minimum threshold levels fixed for growth in new policies, growth in first year premium income and growth in total premium income.

Prior to this, the corporation has made a total payment of 10.67 per cent under the PLLI head.

While growth did not reach the agreed threshold levels in 1999-2000, the corporation paid 3 per cent of the wage bill in 2000-01 and 6 per cent in 2001-02.

In addition, 1.67 per cent PLLI was given as arrears for the first two years of the wage settlement during which negotiations were on for revision of pay packets.

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