Saturday, 21 November 2015

Extract of Defence Pension et al from 7 CPC Report (Pages 417 to 420)



Extract of Defence Pension et al from 7 CPC Report
(Pages 417 to 420)

Parity in pension between pre and post Seventh CPC defence forces retirees

10.2.78. The differential in pension between past and new retirees from the defence forces has been an issue that has engaged the attention of the government and various Parliamentary Committees. A number of committees and bodies have been appointed to examine the issue. This differential arises on account of the fact that computation of pension depends upon the pay scale of the person at the time of retirement. With the passage of time and revision of pay scales by successive Pay Commission, the pay and therefore the pension, of those retiring in later years undergoes a change.

10.2.79. The Estimates Committee (1980-81), in its report on resettlement of Ex-Servicemen, noted that the disparity in pension between past and present pensioners of equal rank was inequitable and recommended that the matter should be examined and a just solution found.

10.2.80. The IV CPC, on the other hand, observed that the amount of pension undergoes changes as and when the pay scales are revised. Any attempt to equalise pension with reference to revised scale of pay would, in fact, amount to the retrospective application of these scales of pay.

10.2.81. In 1991 the government set up a High Level Empowered Committee which recommended a One Time Increase (OTI) in pension from 01.01.1992. All pre-1973 pensioners (JCOs/ORs/ Commissioned officers) were brought to the level of post-1973 retirees. Graded addition with reference to post-1973 rates of pension was also made to determine OTI in rates to bridge the gap to some extent up to post 1986 level.

10.2.82 The V CPC, after taking into account the historical background including the recommendations of High Level Committees, recommended that total parity may be brought between pre 01.01.1986 and post 01.01.1986 retirees. Thereafter, for all pre 01.01.1996 retirees, their pension was consolidated as per the specified fitment formula. If the resultant figure fell short of the pension applicable to the post 01.01.1996 retirees for the same rank, it was to be stepped up to the minimum pension prescribed for the same rank (Para 165.8). It went on to state that every Pay Commission gives certain benefits in pay which are over and above the impact of inflation, either due to upgradation of recruitment qualifications or change in job contents. The benefits accorded on this account need not necessarily be passed on to the pensioners. Thus, the additional benefits suggested by them for future pensioners would not be fully available to the pre 01.01.1996 retirees. It, however, recommended partial parity known as modified parity in respect of pre and post–01.01.1996 pensioners. This provided that in case the revised consolidated pension of a person was less than 50 percent of the minimum of the revised pay scale, it would be stepped up to that level.

10.2.83. The Commission notes that a number of improvements have been brought about aimed at narrowing the gap between past and current pensioners. These include:

a. All pre 1997 PBOR pensioners have been brought at par with post 1997 pensioners.

b. Pension of all pre 2006 PBOR pensioners has been reckoned with reference to notional maximum pay in post 01.01.2006 revised pay structure corresponding to the maximum pre VI CPC pay scales as per fitment table of each rank with enhanced weightage awarded by the group of Ministers.

c. A separate pay scale of 67,000–79,000 was created to address the issue of disparity in pension of pre and post 01.01.2006 pensioners at the level of Lieutenant General and equivalent in the other two services to enable them to get pension at the rate of 36,500
and

d. Linkage of full pension with 33 years of qualifying service has been removed w.e.f. 01.01.2006 instead of 01.09.2008 in case of commissioned officers.

10.2.84. Pension payout to defence forces personnel over time: The evolution of the pension regime over time and the role of the Judiciary in settling the law on the subject has been detailed in Chapter 10.1. There is clear evidence that governments have, over time, progressively moved towards a liberalised regime for past pensioners. The VI CPC has further provided for additional pension with advancing age. In the case of defence forces personnel particularly, a number of improvements have been effected after implementation of the VI CPC recommendations. Two Committees were set up, one in 2009 and another in 2012, under the Chairmanship of the Cabinet Secretary. Based on recommendations made by them, changes in the pension rules were notified in years 2010 and 2013. Each notification went a step further in bridging the gap between pre 2006 and post 2006 pensioners. What this has effectively translated into is testified by examples of pension fixation of defence forces personnel across groups who have retired in the past decades. For example, a Lt Colonel (in GP of 8,000 in VI CPC, retired on 31 July, 1990 with a basic pension of 2,703 per month. The basic pension got revised to 7,550 and 25,700 per month after implementation of the V and VI CPC respectively. The basic pension was further revised in September 2012 to 26,265. With the benefit of dearness relief39, the pensioner is on date entitled to total pay out in terms of pension and dearness relief of 57,520 per month. Similarly, a Subedar (in GP of 4600 in VI CPC, retiring on 30 June, 1991 with a basic pension of 1,300 per month got revised to 6,188 and 9,325 per month after implementation of the V and VI CPC respectively. After further revision, the basic pension of the Officer was fixed at 11,970 per month. With the benefit of dearness relief, the pensioner is on date entitled to total pay out in terms of pension and dearness relief of 26,214 per month.

10.2.85. The illustrations point to substantial increases in pension, across various categories of defence pensioners.

10.2.86. Recommendations: The concept of pension, so far as Civilian employees including CAPFs are concerned, has undergone a complete change. Entrants on or after 01.01.2004 on the civilian side are covered under the National Pension System. In the case of defence forces personnel however, the government has continued with the Defined Benefits pension regime. This regime, as far as past pensioners is concerned, has also witnessed significant improvements with a view to establishing parity between old and new pensioners. The Commission has dwelt on the judicial pronouncements regulating the regime of pensions in detail in Chapter 10.1.

10.2.87. The Commission recommends the following with regard to fixation of pension for past defence forces personnel retirees:

i. All the Defence Forces who retired prior to 01.01.2016 (expected date of implementation of the Seventh CPC recommendations) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised to arrive at the notional pay of the retiree by adding the number of increments he/she had earned in that level while in service, at the rate of three percent. Military Service Pay shall be added to the amount which is arrived at after notionally fitting him in the Seventh CPC matrix. Fifty percent of the total amount so arrived at shall be the revised pension.

ii. The second calculation to be carried out is as follows. The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.

iii. Pensioners shall be entitled to the higher of the two.

It is recognised that the fixation of the pension as per the above formulation (i) above may take a little time since the records of each pensioner will have to be checked to ascertain the number of increments earned in the retiring level. It is, therefore, recommended that in the first instance the pension, may be fixed in terms of formulation (ii) above, till final fixation of the pension under the Seventh CPC matrix is undertaken.

10.2.88. Illustration on fixation of pension for defence forces personnel based on recommendations of the Seventh CPC

Case I

10.2.89. Pensioner ‘A’ retired at last pay 46,310 in PB-4 with GP 8700 on 31 March, 2006 under the VI CPC regime, having drawn one increment in the V CPC pay scale 15,100-450-17,350.



Amount in

1
Basic Pension fixed in VI CPC
30,505
2
Initial Pension fixed under Seventh CPC (using a multiple of 2.57)
78,398
Option 1
3
Minimum of the corresponding pay level in 7 CPC
1,25,500
4
Notional Pay fixation based on one increment
1,29,300
5
Notional Pay after adding Military Service Pay of 15,500
1,44,800
6
50 percent of the notional pay in pay level so arrived and Military Service Pay
72,400
Option 2
7
Pension amount admissible (higher of Option 1 and 2)
78,398



Case II
10.2.90. Pensioner ‘B’ retired at last pay 13,100 in GP 2800 on 31 May, 2015 under the VI CPC regime, having drawn two increments in PB-1.



Amount in

1
Basic Pension fixed in VI CPC
8950
2
Initial Pension fixed under Seventh CPC (using a multiple of 2.57)
23,002
Option 1
3
Minimum of the corresponding pay level in 7 CPC
35,400
4
Notional Pay fixation based on 2 increments
37, 600
5
Notional Pay after adding Military Service Pay of 5,200
42, 800
6
50 percent of the notional pay in pay level so arrived and Military Service Pay
21,400
Option 2
7
Pension amount admissible (higher of Option 1 and 2)
23, 002

18 comments:

  1. Sir, I retired as Hav (Group-Y) on 01 Dec 1997 with 16 yrs service in the 5th CPC regime. I earned 9 increments in the rank of Hav before retirement. Can I exercise Option 2. Kindly guide me. Thanks.

    ReplyDelete
    Replies
    1. Sir, you will have to wait for SAI 1/S/2016 because what is re-reproduced are contents of the Report of 7 CPC. These are just recommendations and the SAI will depend on GoI approval or otherwise of the 7 CPC recommendations.

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  2. A pre 2006 retired Lt Col with say 21 years service will then be entitled to 7 increments as the current Lt Cols are time scale at 13 years service. ??

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    Replies
    1. Sir, please see reply to the query of @jinjon above except that SAI 2/S/2016 will be applicable for Officers (based on which the Pension orders will flow.)

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  3. Para 10.2.83(d) shd be revised. All bfor 1.9.08 the condition of 33 yrs for full pension remains. The Para gives this date as 1.1.06. You may like to clarify. Myself retd on 30.6.06 and had to fulfil 33 yrs reqt which incl rk weightage. As per your contention in one of your earlier posts annual equalisation was not so imp. In Lt of 7cpc, it has failed to specifically mention that equalisation of pensioners at 2023 levels will b the pension which will b used to derive our new pension as on 1.1.16. Annual equalisation would make the CPC irrelevant to us. We would have certainly gained. Eg a Brig pension if both orop and 7cpc are effected is likely to be 101000~. A brig retiring in Jan 16 will have a pension of 110000~.By the time of next equalisation ,a brig with three increments in 7cpc would further widen this gap.

    ReplyDelete
    Replies
    1. Sir, though I do not provide replies to individual queries (mujhe kitna milega or kyun itna hi), please provide rank at the time of retirement and the Pay in the Pay Band, Grade Pay and also what was fixed as your Basic pension. I will try to set your doubts at rest, provisionally.

      You have given 2023 levels? Misquote for 2013? By the way isn't OROP to bring pre-2006 pensioners to the 2006 levels? And you superannuated in 2006 and so are OROP compliant. Therefore what increments do you expect because increments are for additional years of effective service.

      But the finality will only be when the SAI 2/S/2016 and relevant Pension orders are issued.

      Delete
    2. @batsy, Case I is for an officer retiring on 31.3.2006. Might be of interest for you.

      Delete
  4. On what scale would be the pension of pre 2006 Maj with 33years service with weightage including 19 years commissioned service fixed as per 7thCPC

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  5. For the sake of facts, no opinion/calculations etc will be offered till relevant Govt approval of 7 CPC recommendations and SAI/SNI/SAFI are issued.

    Thank you.

    ReplyDelete
  6. 7 CPC is offering NPS for Defence personal as a choice? If we fall in trap, Gratuity is gone because that is being linked to the rules governing providential fund. For NPS subscriber neither Fin ministry nor PFRDA has made any rule since last 12 years. All govt. Bounty is for old system of pensioners and no one is ready to look into the plight of NPS subscribers who joined govt service after 2004. As. Such. Even though it is being declared in parliament that the Gratuity will be available to NPS fellows, no rules are made till date. It is big suspense.

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  7. @Col MS Raju: From what I'd understood, one 7 CPC pension calculation for a pre Jan 2006 Lt Col with 25 years of service would be 25470x2.57=65457.90. For a Lt Col retiree of the period 01 Jan 2006 to 31 Dec 2015, it would be ( actual pension fixed)x2.57. I don't think MSP enters that equation.

    As per the matrix, if a Lt Col retiree of pre Jan 2016 category, promoted at 17 years of service with 25 years of service at retirement had earned 8 (25-17=8) increments, his pension would be (143500+15500)/2 =79500.

    However, considering that to attain 25 years of service, an officer would require12, ie.12=25-13, increments and not the 8 actually earned in the pre AVS-I era, then his pension as per the matrix would need to be , ought to be, (161500+15500)/2= 88500.

    However, I'd be grateful for any corrections regarding these speculations.

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  8. I retired on 1-10-1977 as Nb sub after put in 21-1/2 years service. What will be my basic pension in 7th CPC. Off course recommended.

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  9. Sir, I ex jao iaf took discharge after 15 years of service on Feb 1991. Now my basic pension is 6971.00, is it correct one as on Jan 2016 ? Pls let me know the correct amount what should be at present, and after Orop and 7cpc ( basic only)

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  10. Considering the well defined structure of the rigid pyramid of military only three parameters are need to be considered for the fixation of pensions 1. Rank 2. length of service and grade. and a compensation for retiring from the service depending on the difference of age between the civilian counter part. Either te civilian counter part is ignorant about tit or they are purposely ignore it for their supremacy. My earnest request to the bureaucrat is that they should not drag our well discipline soldier the same way the civilians demand their demands. Civilian always turned against the government at any time as strike and other kind of agitations. It will not effect the functioning of the government compare to such agitation from the forces. It is sensitive area and the government should give legitimate copensation for their contribution to safeguard our nation from external aggression and other disturbances from outside. I hope the top brasses will represent the case strongly and keep the rank and file under strict discipline and elevate their morale to the required level. Now a days soldiers are not fighting with swords. They are operators of sophisticated equipment and need more dexterity to use it effectively when needed. Some where I read that the soldiers are described as 'TOOL HANDLERS'. If so, who operate these equipment? and where they stand in the file? I feel sorry for our soldiers who sacrifice their life for the nation.

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  11. Regarding "Linkage of full pension with 33yrs of QS has been removed from 01-01-2006 for commisioned officers"There is no order yet from DESW for its implementation.

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  12. This comment has been removed by the author.

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  13. This comment has been removed by the author.

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  14. Sir for sgt Gp X 7cpc BP awarded was RS
    4277 and brought up to lower rank Rs5519.eventually BP was increased to
    8585 through OROP.what will the calculation for 7cpc 4277 or 8585 X2.57

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