It is reliably learnt that a certain meeting taken by the Defence Minister where representatives of Service HQ as well as members of the governing/executive committee of ESM organisations were present, the following was made clear and obvious and approved by the Defence Minister: -
1. There isn’t an annual increment of pension because pension is for the years of service rendered to the Nation through the Armed Forces/Govt Civilian employment.
Elucidation A: - Increments are paid for every subsequent year in service i.e pay of a serving personnel/employee A with 25 years service will be 3% lesser than the pay of a serving personnel/employee B with 26 years of service.
Elucidation B: - Pension is paid on the basis of the last pay drawn for the number of years of service rendered on the date of retirement. In the above example, A will get a pension for 25 years of service and B will get a pension for 26 years of service. An increment will mean that A will get the pension of B, who has rendered 26 years of service and pension of B will have to be incremented and become pension for 27 years of service.
2. There would, however, be an annual review in OROP. This is to remove the following anomalies: -
2.1. If C retires in a certain rank with 20 years service on 30 June of that year will draw less than D who retires with 20 years of service on 31st July of the same year because D gets the benefit of 3% increment on 1st July.
2.2. Bunching effect of 4 years in 4th CPC, 3 years in 5th CPC and 2 years in 6th CPC
2.3. Implementation of AVSC Phase I w.e.f 16th December 2004. It has resulted in officers being promoted to say Select rank of Lt Col in the 18th but those after 16th December 2004 being promoted in the 14th year.
3. Perusal of the modified/enhanced parity tables indicate a pension of Rs 7065 for a Sepoy in the 20 to 27 years service bracket and become Rs 7175 if the Sepoy served 27.5 years or more. Similar cap will occur for all personnel within a time frame of 5 years. Therefore, alarm bells rung by vitiated persons are based on lack of information or mala-fide misunderstanding the issue of OROP
4. It has been calculated and re validated with data for the period of 5 years and the financial effect is estimated to be 0.85% or Rs 185 crore till every ESM reaches the top of the table appropriate to his rank and years of service.
5. The first annual review was scheduled to take place on 1st Jul 2015 and the next annual review would take place on 1st January 2016, when the recommendations of the 7th CPC kick in. Thereafter all annual reviews would be effective from 1st January of that year.
6. It is understood that the 7th CPC is very clear about the differences between Civilian pension and Military pension. Due to the Civilian Govt employees serving till the age of 60 years, it has been termed mature pension. Because Services personnel retire at younger ages, Military pension has been termed “aborted” pension, deserving a different method of being dealt with.
7. It is also understood that the ESM present at the meeting (Lt Gen Balbir Singh, Maj Gen Satbir Singh, Brig Katara, Gp Capt Gandhi etc) had vouched for the DGL prepared for OROP and the arguments in favour of matters cited in above paragraphs.
8. This is being published to clear the air and reduce the fog of mistrust and, consequent but inadvertent misinformation & misunderstanding.