Aerial View : Am I correct?

In the letters to dignitaries, Maj Gen Satbir Singh SM (retd), Chairman IESM, is quoted to have written, amongst other things: -

"7. Rates of pensions are enhanced every year since the basic pays of serving soldiers are enhanced at the rate of three percent every year………. If this is not implemented, juniors will start drawing more pension that their seniors. In that event, protection clause will need to be applied which will be difficult to implement and will cause delays"(emphasis supplied)

Are Rates of pensions enhanced every year because Basic Pays are not enhanced every year?

This post endeavours to address this issue.

The Fundamentals

There is a starting pay obtained by different formulae in the previous CPCs. The formula in the 6^th CPC report recommended that the Basic Pay (of which Rank Pay forms part, where applicable,) as on 1.1.2006 is by multiplied by a factor of 1.86 to obtain the Pay in the Pay Band. By this formula, the more senior the official, the higher was the Basic pay and, therefore higher the Pay in the Pay Band from 1.1.2006.

Please see tables below in this formulated refixation (effect of a correction advised by Ld Attorney General on 3 Sep 13 have not been factored in). As is evident for the Armed Forces, the basic pay/starting pay in the Pay Band (Col 3) was worked out using the 1.86 x Basic Pay + Rank Pay drawn on 1.1.2006 and given in relevant Paras of the SAI/SNI/SAFI 2/S/2008 and Appendix C, Corr 2/S/2008 and SAI 3/S/2008 for each Rank: -

Rank – Capt & equivalent
Pre-revised Scale						Revised Pay Band PB-3+ Grade Pay + MSP
9600-300-11400						PB 3 Rs 15600-39100+6100+6000
Pre-revised Basic Pay						Revised Pay
Pay in 5^th CPC Scale	Rank Pay					Pay in Pay Band						Grade Pay				MSP		Total Revised Pay			Pension as on 01Jan 06
1	2					3						4				5		6			7
9600	400					18600						6100				6000		30700			15350
9900	400					19160						6100				6000		31260			15630
10200	400					19720						6100				6000		31820			15910
10500	400					20280						6100				6000		32380			16190
10800	400					20840						6100				6000		32940			16470
11100	400					21390						6100				6000		33490			16745
11400	400					21950						6100				6000		34050			17025
11700	400					22510						6100				6000		34610			17305
12000	400					23070						6100				6000		35170			17585
12300	400					23630						6100				6000		35730			17865
Rank – Major & equivalent
Pre-revised Scale					Revised Pay Band PB-3+ Grade Pay + MSP
11600-325-14850					PB-3 Rs 15600-39100+6600+6000
Pre-revised Basic Pay					Revised Pay
Pay in the 5^th CPC scale		Rank Pay			Pay in the Pay Band					Grade Pay			MSP					Total Revised Pay			Pension as on 01Jan 06
11600		1200			23810					6600			6000					36410			18205
11925		1200			24420					6600			6000					36410			18205
12250		1200			25020					6600			6000					37020			18510
12575		1200			25630					6600			6000					37620			18810
12900		1200			26320					6600			6000					38230			19115
13225		1200			26840					6600			6000					39440			19720
13550		1200			27440					6600			6000					40040			20020
13875		1200			28040					6600			6000					40640			20320
14200		1200			28650					6600			6000					41250			20625
14525		1200			29250					6600			6000					41850			20925
14850		1200			29860					6600			6000					42460			21230
15175		1200			30460					6600			6000					43060			21530
15500		1200			31070					6600			6000					43670			21835
15825		1200			31670					6600			6000					44270			22135
Rank – Lt Colonel & equivalent
Pre-revised Scale							Revised Pay Band PB-4+ Grade Pay + MSP
13500-400-17100							Rs 37400-67000 + Rs 8000 + Rs 6000
Pre-revised Basic Pay							Revised Pay
Pay in the 5^th CPC scale		Rank Pay					Pay in the Pay Band					Grade Pay			MSP				Total Revised Pay		Pension as on 01 Jan 06
13500		1600					38530					8000			6000				52530		26265
13900		1600					38530					8000			6000				52530		26265
14300		1600					39690					8000			6000				53690		26845
14700		1600					39690					8000			6000				53690		26845
15100		1600					40890					8000			6000				54890		27445
15500		1600					40890					8000			6000				54890		27445
15900		1600					42120					8000			6000				56120		28060
16300		1600					42120					8000			6000				56120		28060
16700		1600					43390					8000			6000				57390		28695
17100		1600					43390					8000			6000				57390		28695
17500		1600					44700					8000			6000				58700		29350
17900		1600					44700					8000			6000				58700		29350
18300		1600					46050					8000			6000				60050		30025
Rank – Colonel (Time Scale) & equivalent
Pre-revised Scale							Revised Pay Band PB-4+ Grade Pay + MSP
15100-450-17350							Rs 37400-67000 + Rs 8700 + Rs 6000
Pre-revised Basic Pay							Revised Pay
Pay in the 5^th CPC scale		Rank Pay					Pay in the Pay Band					Grade Pay			MSP				Total Revised Pay			Pension as on 01 Jan 06
15100		1600					40890					8700			6000				55590			27795
15550		1600					40890					8700			6000				55590			27795
16000		1600					42120					8700			6000				56820			28410
16450		1600					42120					8700			6000				56820			28410
16900		1600					43390					8700			6000				58090			29045
17350		1600					43390					8700			6000				58090			29045
17800		1600					44700					8700			6000				59400			29700
18250		1600					44700					8700			6000				59400			29700
18700		1600					46050					8700			6000				60750			30375
Rank – Colonel & equivalent
Pre-revised Scale								Revised Pay Band PB-4+ Grade Pay + MSP
15100-400-17350								PB-4 Rs 37400+8700+6000
Pre-revised Basic Pay								Revised Pay
Pay in the 5^th CPC scale			Rank Pay					Pay in the Pay Band			Grade Pay			MSP					Total Revised Pay		Pension as on 01 Jan 06
15100			2000					40890			8700			6000					55590		27795
15550			2000					42120			8700			6000					56820		28410
16000			2000					42120			8700			6000					56820		28410
16450			2000					43390			8700			6000					58090		29045
16900			2000					43390			8700			6000					58090		29045
17350			2000					44700			8700			6000					59400		29700
17800			2000					44700			8700			6000					59400		29700
18250			2000					46050			8700			6000					60750		30375
18700			2000					46050			8700			6000					60750		30375
Rank – Brigadier & equivalent
Pre-revised Scale									Revised Pay Band PB-4+ Grade Pay + MSP
16700-450-18050									PB-4 Rs 37400+8900+6000
Pre-revised Basic Pay									Revised Pay
Pay in the 5^th scale				Rank Pay					Pay in the Pay Band		Grade Pay						MSP			Total Revised Pay	Pension as on 01Jan 06
16700				2400					43390		8900						6000			58290	29145
17150				2400					44700		8900						6000			59600	29800
17600				2400					44700		8900						6000			59600	29800
18050				2400					46050		8900						6000			60950	30475
18500				2400					46050		8900						6000			60950	30475
18950				2400					47440		8900						6000			62340	31170
19400				2400					47440		8900						6000			62340	31170

After the implementation of the Ld Attorney General’s opinion dated 3 Sep 13, the Basic Pay will increase by the amount of Rank Pay for Captains to Brigadiers and equivalents in Navy and Air Force.

[What the addition of Rank Pay could do to the Pay Bands of Maj Gen and Lt Gens is for another post!]

The 3% is the annual increment for every additional year of service. It is not an enhancement/increase of Basic Pay

Illustration - I

Captain 'A' who is in that rank on 1.1.2006. His Basic Pay is Rs 18600+ GP Rs 6100+ MSP Rs 6000 making for total emoluments of Rs 30700 and his pension Rs 15350.

In July, i.e. 1.7.2006 Captain 'A' will get Rs 18600 + Rs 6100 and 3% increment of BP + GP Rs 6100 + MSP Rs 6000 = Rs 31450. His pay in the Pay Band has increased by the amount of 3% increment because he has an additional year of service in the rank of Captain. His pension now increases from Rs 15350 to Rs 15725.

Illustration - II

Another officer Lt 'B' promoted to Captain rank on 1.1.2007. His Basic pay in the Pay Band will be fixed at Rs 18600 + GP Rs 6100 + MSP Rs 6000 making his total emoluments Rs 30700 and a pension of Rs 15350.

Newly promoted Captain B will not be getting the same BP+3% that Captain A has started to get from 1.7.2006.

Capt B will get an increment of 3% on Rs 18600+GP only on 1.7.2007.

In other words there will be difference of 3% between Captains A and B because B is junior in rank by one year.

So, on 1.7.2007, Captain 'A' gets his second increment of 3% of Rs 18600+GP +3% of Pay in the Pay Band + GP. Add MSP.

But Capt B will get his first increment of 3% of Rs 18600+GP only and being junior will draw less total emoluments and therefore, lesser pension.

Therefore, the senior in the same rank will always get higher remuneration than a junior in that rank.

By OROP principle enunciated on 16 Feb 14 i.e same years of service, same rank, same amount of pension will make sure that Captain A (Date of Rank 1.7.2006) will always get higher pay and hence higher pension than Capt B (date of rank 1.7.2007).

Conclusion

In more simple terms a Lt Col with 25 years of service will draw higher pension than a Lt Col with 24 years of service, because the Basic Pension is the same i.e. Rs 38530.

There will never be a case when an officer/OR in the same rank will draw lesser than another junior in the same rank with lesser years of service as long as same Rank, Same Years of Service, Same Pension principle is followed.

The only caveat being that if Capt B, who is junior, is promoted to next higher rank i.e Major before Capt A. Then Capt B will start at the beginning of the Pay Band of a Major (i.e. Rs 23810 + GP Rs 6600 + MSP Rs 6000) with total emoluments at Rs 36410 and pension of Rs 18205.

Numerical Tables (courtesy Brig Vijay Raheja (retd) given below. Please note: - Figures in red for reference purposes only as “Time based promotions” are Lt to Capt - 2^nd year of service, Capt to Major - 6^th year of service, Major to Lt Col - 13^th year of service and Lt Col to Col (TS) - 26^th year of service: -

	Capt		Major		Lt Col
*Components*	@100%	@50%	@100%	@50%	@100%	@50%
Basic Pay	18600		23810		37400
Grade Pay	6100		6600		8000
Military Service Pay	6000		6000		6000
Total	30700		36410		51400
Increment/yr	3%		3%		3%
Year in Rank
Y1	30700	15350	36410	18205	51400	25700
Y2	31450	15725	37330	18665	52770	26385
Y3	32220	16110	38270	19135	54180	27090
Y4	33010	16505	39240	19620	55630	27815
	Promoted to Major		-	-	-	-
Y5	33830	16915	40240	20120	57120	28560
Y6	34670	17335	41270	20635	58660	29330
Y7	35540	17770	42330	21165	60240	30120
	-	-	Promoted to Lt Col		-	-
Y8	36430	18215	43420	21710	61870	30935
Y9	37350	18675	44550	22275	63550	31775
Y10	38300	19150	45710	22855	65280	32640
Y11	39270	19635	46910	23455	67060	33530
Y12	40270	20135	48140	24070	68900	34450
Y13	41300	20650	49410	24705	70790	35395
	-	-	-	-	Promoted to Col (TS)
Y14	42360	21180	50720	25360	72740	36370
Y15	43460	21730	52070	26035	74750	37375
Y16	44590	22295	53460	26730	76820	38410
Y17	45750	22875	54890	27445	78950	39475
Y18	46950	23475	56360	28180	81140	40570
Y19	48180	24090	57880	28940	83400	41700
Y20	49450	24725	59440	29720	85730	42865
Y21	50760	25380	61050	30525	88130	44065
Y22	52110	26055	62710	31355	90600	45300
Y23	53500	26750	64420	32210	93140	46570
Y24	54930	27465	66180	33090	95760	47880
Y25	56400	28200	67990	33995	98460	49230
Y26	57920	28960	69850	34925	101240	50620
Y27	59480	29740	71770	35885	104100	52050
Y28	61090	30545	73750	36875	107050	53525
Y29	62750	31375	75790	37895	110090	55045
Y30	64460	32230	77890	38945	113220	56610

E & O E

* * * * *

Aerial View

Monday 16 June 2014

Am I correct?

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