Want to know how OROP was calculated? Part I

Reply Reference No. PC-37/RTI/D (P/P)/2014 dated 05 Aug 16

Received on 12 Sep 16

58-A

Most Immediate

Kindly refer to the age old demand of ‘One Rank One Pension’ which has been appearing quite often in media during elections.

2.      The demand is not really implementable. However, the categories of pensioners which have been created after the implementation of the 6^th CPC’s report have invited concern of the Government. The proposal that the categories created in case of Armed Forces pensioners in the post 1.1.2006 scenario needs to be brought so that there may be only 2 categories of pensioners viz. pre-1.1.2006 and post 1.1.2006.   

3.       With a view to consider the above proposal in its right perspective, information/details are required immediately on the following points: -

          Commissioned Officers

(i)      Pension of Commissioned Officers who retired in 1995 with 5 years service in that rank. 2 to 3 examples, say, Major General, Brigadier, Colonel may be worked out.

(ii)    The pension of those ranks with same length of service i.e. 5 years, as on 1.1.2009.

          PBOR

(i)      Information sought in (i) and (ii) may also be provided in respect of 2-3 ranks of PBOR.

(ii)    Pension of a Havildar with 5 years service in that rank, who retired before 10.10.1997.

(iii)   Pension of a Havildar with 5 years of service in that rank, who retired after 10.10.1997 with 5 years of service.

4.      (i)      In post 1.1.2006 scenario, a category of pensioner was created in the case of Commissioned Officers who retired between 1.1.2006 and 1.9.2008, as in their case linkage of qualifying service with weightage in service was not de-linked  while computing pension. If it has to be neutralised, what will be the financial implications?   

          (ii)    Similarly in the case of PBOR, a category of pensioners was created who retired between 1.1.2006 and 31.8.2008 because in their case classification allowance at the old rate was taken into account while computing pension. If this has to be neutralised in the sense that benefit of allowance has to be given w.e.f 1.1.2006m what will be the financial implications?    

5.       In case One Rank One Pension has to be conceded, total financial implication involved may also be provided.

6.      The information on the above points may be got worked out immediately and get it faxed alongwith calculation sheet by 21.5.2009 evening.

Sd/-----------

Harbans Singh

Director (Pen/Policy)

Jt CDGA, R K Puram

MoD ID No. 10 (1)/2009/D (Pen/Pol) dated 20.5.2009

Copy to: PCDA (P) Allahabad.

MOST IMMEDIATE

FAX/SPEED POST

No. Gts/Tech/0167/Vol-I

Office of the PCDA (P)

Draupadi Ghat

Allahabad

Dated: 21^st May 2009

To,

Shri Paras Ram, IDAS,

Jt. CGDA (AT-II)

Office of the CGDA

West Block V

R K Puram

New Delhi – 110 066

Subject: - One Rank One Pension 

Reference: - MoD ID No. 10 (1)/2009/D (Pen/Pol) dated 20.05.09

          The information/details as required by the MoD vide ID dated 20.05.09 quoted under reference are forwarded herewith as desired by the Ministry. 

Para 3 (i) and (ii) of MoD ID dated 20.05.09

Commissioned Officers

(i)     Pension of Commissioned Officers who retired in 1995 with 5 years service in that rank, 2 to 3 examples, say Major General, Brigadier, Colonel.  

(ii)    The pension of those ranks with same length of service i.e 5 years as on 01.01.2009.

Comments

5 years service in the rank is not relevant for determination of pension and service in a particular rank is not indicated in the PPO etc. However, we have located three cases – one each of Colonel, Brigadier, and Major General who had put in seven years, six years and three years in the respective rank and who retired in 1995. We have also located three cases, one each of Colonel, Brigadier, and Major General who retired in 2009 with the same length of qualifying service as those in the illustrative example of 1995 retirees. Comparison of their pension is given in Table – I.

PBOR

(i)     Pension of PBOR who retired in 1995 with 5 years service in that rank.

(ii)    The pension of those ranks with same length of service i.e. 5 years as on 01.01.2009

Comments

As brought out above, 5 years service in the rank is not relevant for determination of pension and service in a particular rank is not indicated in the PPO etc. For the rank of Naik to Subedar Major, we have taken typical length of qualifying service of each rank (Group B or Y) and taken the original pension sanctioned in 1995, consolidation on 01.01.1996, improvement in pension w.e.f from 01.01.2006, and Sixth CPC consolidation on 01.01.2006. We have also taken actual pension sanctioned to 2009 retiree of the same rank, Group and same qualifying service. The comparison is shown in Table –II.    

(iii)  Pension of a Havildar with 5 years service in that rank who retired before 10.10.1997.

(iv)   Pension of a Havildar with 5 years service in that rank who retired after 10.10.1997.

Comments

A comparison of pension to pre-10.10.1997 and post 10.10.1997 retiree Havildar with 22 to 24 years qualifying service is given in Table – III.

Para 4 (i) of MoD ID dated 20.05.2009

(i)     In post 01.01.2006 scenario, category of pensioner was created in the case of Commissioned Officers who retired between 01.01.2006 and 01.09.2008, as in their cases linkage of qualifying service with weightage to service was not de-linked while computing pension. If it is neutralised, the financial implications.    

Comments

It is assessed that there were about 1100 cases of Officers from the rank of Major to Colonel who had retired between 01.01.2006 and 31.08.2008, before putting in 25 years (Major), or 26 years (Lt Colonel & Colonel) qualifying service to draw full pension for 33 years (including weightage). The shortfall (i.e. 25 or 26 years less the actual service) varies from case to case. However, taking an average of 23 years qualifying service, and average financial benefit of Rs 3000/- per case (based on some actual calculation), the financial effect will be about (Rs 3000 + 22% DR) x 12 x 1100 = Rs 4.83 crores per annum for Army.   

(ii)    In the case of PBOR, category of pensioners was created who retired between 01.01.2006 to 31.08.2008 because in their case classification allowance at old rate was taken into account while computing pension. If this has to be neutralised in the sense that benefit of allowance be given effect from 01.01.2006, the financial implications.

Comments

It is assessed that the number of ORs (i.e. Sepoy to Hony Nb Sub) who retired between 01.01.2006 to 31.08.2008 is about 88000. The average increase in pension due to increase in classification allowance is estimated to be Rs 60/- per month. Taking into account 22% DR, the financial effect would be 88000 x 12 x (60+22%DR) = Rs 7.73 crore per annum for Army.

Para 5 of MoD ID dated 20.05.2009

In case One Rank One Pension has to be conceded total financial implications involved.

Comments

It is not practically possible to work out the financial implications involved in case One Rank One Pension is conceded to because the basic structure for computing pension in respect of Armed Forces Personnel have undergone change under VI CPC. The pension of each rank/group differs from individual to individual.

          However, a sample study of Naik have been carried out taking into account the pension actually granted to a 2009 retiree Naik, Group Y with 22 years of service. This works out to Rs 6785/- per month. Pension of pre-10.10.1997 retiree Naik Group B with 22 years service after consolidation works out to Rs 4497/- per month. The difference is Rs 2288/- per month. The assessed number of pre-2006 Naik is 5 lakhs. Taking into account 22% DR, the financial effect would be 500000 x 12 x (2288 + 22% DR) = Rs 1677.51 crores per annum for Naiks alone. Thus it is evident that the financial implication in respect of the entire Armed Forces would be in thousands of crores.     

PCDA (P) has seen.

Sd/---------------

21/5/09

(D R NEGI)

CDA

Annexure

Table - I

Commissioned Officers – Illustrative Examples

Sl No.	Rank	QS	Basic pension on 1995	Revised Pension in 6th CPC on 1.1.2006	Pension post 2006 as on 1.1.2009
1	2	3	4	5	6
1	Colonel	31	3150	26050	33070
2	Brigadier	33	3350	26150	33930
3	Maj Gen	35	3400	26700	35515

Table II

Personnel Below Officer Ranks – Illustrative Examples

Sl No	Rank	QS	Pension of a retiree in 1995	Consolidated Pension on 1.1.1996	Improvement of Pension as on 1.1.2006	Consolidated Pension on 1.1.2006 in 6th CPC	Pension of post 2006 as on 1.1.2009
1	2	3	4	5	6	7	8
1	Naik	22	570	1749	2983	4497	6785
2	Hav	24	689	2104	3375	5085	6895
3	Nb Sub	26	1057	3201	4968	7486	8130
4	Sub	28	1300	3924	6188	9324	9720
5	Sub Maj	30	1490	4491	7163	10793	11615

Notes:       1. Pension of PBOR retiree in 1995 is taken for Gp ‘B’ and for retirees in 2009 for same length of qualifying service is taken for Gp ‘Y.’  

2. The requirement of 5 years of qualifying service in particular rank of PBOR has no connection in pension as their pension is computed on the maximum of pay scale of that rank.

3. The QS has been taken as terms of engagement as representative in the respective rank.           

Table - III

Havildar of Pre & Post 10.10.97 retiree – Illustrative Examples

Sl No.	Rank	QS	Pre 10.10.1997 retiree			Post 10.10.1997 retiree
			Pension of a pre 10.10. 1997 retiree	Improvement of pension as on 1.1.2006	Consolidated pension in 6th CPC	Pension of a pre 10.10. 1997 retiree	Improvement of pension as on 1.1.2006	Consolidated pension in 6th CPC
1	2	3	4	5	6	7	8	9
1	Hav	22	2025	3150	4746	2118	3294	4964
2	Hav	24	2175	3375	5085	2275	3529	5320

Note:          1. Pension of Pre 10.10.97 retiree is taken for Gp ‘B’ and for post 10.10.97 retirees for same length of qualifying service is taken for Gp ‘Y’.

2. The requirement of 5 years qualifying service in particular rank of PBOR has no connection in pension as their pension was computed on the maximum of the pay scale of that rank.

*        *        *        *        *

Cabinet Secretary Committee (CSC) – 2012

E -38/A

Office of the Controller General of Defence

Accounts, Ulan Batar Road, Palam,

Delhi Cantt – 110010

Subject: Pay/Pensionary issued of Defence personnel to be considered by a Committee

Reference: MoD ID No. 12 (11)/2012- (Pen/Policy) dated 13.7.2012 & 18.7.2012  

          The Pension related matters to be discussed by the Committee of Secretaries headed by Cabinet Secretary conveyed vide MoD’s above said ID dated 13.7.2012, has been examined in consultation with Pr CDA (P) Allahabad and comments on the same are as under: -  

1.       ONE RANK ONE PENSION    

          (a)     PBOR Pensioners:

          Ministry may be intimated that the pre-2006 PBOR pensioners are getting their existing pension in terms of MoD letter No. PC-10 (1)/2009/D (Pen/Pol) dated 8.3.2010 with reference to notional pay in revised pay structure corresponding to maximum of pre-revised pay scale. The post-2006 pensioners are getting pension with reference t 50% of emoluments last drawn or average of 10 months last pay drawn or protection allowed vide MoD letter No. 17 (4)/08(2)/D (Pen/Pol) dated 18.8.2010 (by taking notional maximum in revised pay structure corresponding to maximum of pre-revised pay scale across the three services), whichever is more beneficial. For better appreciation of the issue a table showing the revised pension in respect of Pre 2006 and Post 2006 retiree PBOR pensioners based on Government of India, MoD letter dated 08.03. 2010 and Government of India, MoD letter dated 18.8.2010 respectively has been prepared and enclosed as Table No - 1. On perusal of the same, it maybe revealed that there seems to be no wide gap between pre and post 2006 retiree PBOR pensioners.      

          As regard difference in pension of Rs 3000/- approx in respect of Havildar and Naib Subedar, it may be added that the revised pension from 1.7.2009 for these ranks has been calculated with reference to provisions contained in MoD letter dated 8.3.2010 on the basis of the notional pay in revised pay structure corresponding to maximum of pre-revised scale introduced from 10.10.1997 for the rank and group as per fitment tables attached with SAI 1/S/2008. The same method has also been adopted for calculation of the revised pension for these ranks. However, the difference in pension is due to the difference in the maximum of pay scale for both ranks/groups and also difference of Rs 1400/- in grade pay of these ranks.        

(b)    Commissioned Officer Pensioners:

          In the case of Commissioned Officers, calculation of pension is based on the qualifying service and reckonable emoluments drawn during 10 months preceding retirement. Since the reckonable emoluments vary from case to case even for an officer of the same rank and same qualifying service, uniform pension does not exist for a pre-2006 retiree commissioned officer as well as those who retired on or after 1.1.2006. The pension of a commissioned officer retired in 1996 is different from his counterpart who retires in 2005 with same rank with same qualifying service due to the difference in the reckonable emoluments. Therefore, same pension for same rank with equal qualifying service is not feasible in respect of commissioned officers.

          As regards difference of pension between Major and Lt Col, it is submitted that the Majors are placed in PB-III with Grade Pay of Rs 6600/- and MSP of Rs 6000/- whereas Lt Col are placed in PB-IV with Grade Pay of Rs 8000/- and MSP of Rs 6000/- The revised pension in these ranks in terms of Sixth CPC Government orders thus works out to Rs 14464/- (beneficial under fitment formula) and Rs 25700/- (beneficial under minimum guaranteed pension clause) respectively. Similarly Maj Gens and Lt Gens are placed in PB-IV with Grade Pay of Rs 10000/- and in HAG scale of Rs 67000-79000. After allowing notional benefit of MSP for calculation of revised pension in terms of Sixth CPC orders, the same works out to Rs 26700/- and Rs 36500/- respectively. Thus difference in revised pension for above said ranks are due to enhancement in pay band and grade pay of Lt Col and also change in HAG pay scale and allowing notional MSP for calculating minimum guaranteed pension.      

          Since MoD has not provided any methodology for bridging the gap in pension of pre-2006 retiree commissioned officers vis-à-vis post-2006 retiree commissioned officers, this HQ office is not in a position to work out the financial implications involved in this regard. However, Ministry may be intimated that there are total 35439 pre-2006 commissioned officer retirees who will be benefitted if some enhancement is allowed for these category of commissioned officers. 

2.      ENHANCEMENT OF FAMILY PENSION OF PBOR PENSIONERS

          Consequent upon implementation of Government decision on the recommendations of Sixth CPC, a Committee was set up under chairmanship of Cabinet Secretary. Apart from other recommendations made, the Committee also recommended for bridging the gap between pre-2006 and post-2006 discharged PBOR which was implemented from 1.7.2009 vide MoD above said letter dated 8.3.2010.  

          As per provisions of said MoD letter dated 8.3.2010, all pre-10.10.1997 retiree PBOR are brought at par with post 10.10.1997 PBOR retirees and their service pension/special pension/invalid pension and service element of disability/war injury pension has been reckoned with reference to notional pay in revised pay structure corresponding to maximum of pre-revised pay scale as per fitment tables attached with SAI 1/S/2008 for each rank/group.    

          Keeping in view the term of engagement of PBOR and early retirement age for keeping the Forces young, service pension of PBOR discharged prior to 1.1.2006 was determined with reference to maximum of the pay scale irrespective of the fact whether he was drawing pay at any stage in pay scale of his rank/group. Hence, the scheme of bridging the gap between pre-2006 and post-2006 retiree PBOR has been implemented only in respect of service pension/special pension/invalid pension and service element of disability/liberalised disability/war injury pension. Since the family pension structure is uniformly applicable to PBOR as well as civilian and commissioned officers and they draw their family pension based on emoluments last drawn of the individual and the benefit of maximum of pay scales was never allowed to the PBOR family pensioners.  

          However, on receipt of a proposal for extending the benefit of notional pay corresponding to maximum of pre-revised pay scales to the family pensioners of the PBOR vide MoD ID No. 10 (27)/2010/D (Pen/Pol) dated 23.11.2011, comments of this HQ office alongwith financial implications involved has already been conveyed to MoD vide our UO No. 5662/AT-P/XV dated 29.11.2011. The financial implication has been revised after taking into account the Dearness relief @ 65% and revised financial implications are enclosed as Tables 2, 3, & 4 for ordinary, special and liberalised family pension respectively. Hence, number of beneficiaries involved – 4, 18, 404, Financial implication would be Rs 527.30 crores.

3.       DUAL FAMILY PENSION

          Due to their early retirement age, Defence pensioners have an opportunity to get re-employed in a Civil/Defence establishment and earn second pension in addition to his/her Armed Forces pension subject to fulfilment of prescribed conditions. Since the second service is limited till the individual reaches the prescribed age of superannuation i.e. upto 60 years in civil employment, the two pensions together equate them with their civilian counterparts and so long they are alive, they enjoy two pensions. However, after the demise of the pensioner, the family is eligible to receive family pension either from the Military source or from the civil source. However, family pensions are allowed if the second family pension happens to be under Employees Pension Scheme 1995 and Family Pension Scheme 1971.        

          There is no provision except as explained above under which two family pension of some person may be granted to a widow. Since the Pension Sanctioning Authorities are not aware about the number of pensioners who are re-employed and subsequently died/retired while holding the civil post which makes the family pensioners also eligible for pension, we are not in a position to intimate the number of beneficiaries and financial implications involved. 

4.      FAMILY PENSION TO MENTALLY/PHYSICALLY CHALLENGED SON/DAUGHTER OF ARMED FORCES ON MARRIAGE

          In terms of the provisions contained in GoI ID No. 30 below Rule 54 of CCS (Pension) Rules 1972, the physically/mentally handicapped son/daughter of a government servant who is otherwise entitled for life long family pension, are not eligible for family pension on their marriage. 

          Parents of such handicapped child are genuinely worried about their welfare especially after their own death where nobody is around the handicapped child to look after. A spouse may be the only trustworthy and dignified companion after parents. In fact, the family pension is on incentive which would enable a person to find a life partner and live a life of dignity. Entitlement of pension to handicapped child works as a financial security and incentive after marriage, while its discontinuation after marriage results in financial insecurity.                

          The matter has been considered by the nodal Ministry in the past and opined that it is difficult to cover mentally/physically disabled son/daughter under the Family pension after their marriage as a person no longer remains part of family of his/her parents thereafter. In case this fundamental aspect of family is changed, it would be difficult to defend the very structure of the family pension. 

          Since such cases are either not granted family pension by the Pension Sanctioning Authorities or if sanctioned, their pension is discontinued by the Pension Disbursing Agencies on getting married, it is not feasible to provide the number of beneficiaries involved, if the proposal is accepted by the Government and also financial implications involved in the issue.                      Sd/--------------

Jt CGDA (AT-II)

Ms A S Lakshmi

Joint Secretary (ESW)

MoD, Deptt of Ex-Servicemen Welfare

UO No. 5698/AT-P/6^th CPC/Committee/Vol –IV dated 23^rd July 2012.

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Table 1

PBOR

S No.	Rank	Group	Weightage	QS	Pension of Pre-2006 retirees w.e.f.1.07.2009 in terms of GoI MoD letter dated 08.3.2010 (Circular 430)		Pension of Post-2006 retirees in terms of GoI MoD letter dated 18.8.2010 (Circular 47)		Difference
					Max of pay scale as per fitment table SAI 1/S/2008	Revised rate of pension	Max of pay scale in all three Armed Forces w.e.f 01.01.2006	Revised rate of pension
Col No	1	2	3	4	5	6	7	8	9
1	Sepoy	X	10	20	14170	6441	14570	6623	182
		Y	10	20	12150	5523	12470	5669	148
2	Naik	X	8	22	15180	6900	15480	7037	137
		Y	8	22	13300	6046	13610	6187	141
3	Hav	X	6	24	16830	7650	18290	8314	864
		Y	6	24	14440	6564	15210	6914	350
4	Nb Sub	X	5	26	23020	10813	23020	10813	Nil
		Y	5	26	21350	10029	21350	10029	Nil
5	Sub	X	5	28	28210	13105	28210	13105	Nil
		Y	5	28	23940	11970	23940	11970	Nil
6	Sub Maj	X	5	32	26900	13450	27180	13590	140
		Y	5	32	24570	12285	24570	12285	Nil

Note: Pension of Pre-2006 is calculated on the basic of GOI/MoD letter dated 08.03.2010 whereas in Post-2006 case pension has been calculated on the basic of GoI MoD letter dated 18.08.2010 as the same in minimum safeguard for Post-2006 retirees.

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TABLE -2

FINANCIAL IMPLICATION FOR GRANT OF BENEFIT TO PRE-2006 PBOR FAMILY PENSIONERS IN LINE WITH THE 08.03.2010 GOVERNMENT LETTER GRANTING BENEFIT TO PRE-2006 PBOR PENSIONERS

S No.	Rank of Army corresponding rank in Navy and Air Force	Estimated number of 2006 Family Pensioners	Group for pension as representative	Fitment of the maximum of the previous pay scale (V CPC) under VI CPC as per SAI 1/S/2008	Proposed revised OFP of pre-2006 Family Pensioners (30% of Col 5)	Existing OFP (Modified parity rate as per Annexure III of GoI/MoD letter No, 17 (4)/2006 (i)/D (Pen/Pol) dated 11.11.2006 of Pre-2006 Family Pensioners	Average increase in Pension (Col 6 minus Col 7)	DR @ 65% w.e.f. 1/1/2012 i.e. 65% of Col 8	Per capita increase in OFP (col 8 plus col 9)	Financial effect per year including DR
1	2	3	4	5	6	7	8	9	10	11
1	Sepoy	148273	Y	12000	3600	3500	100	65	165	293580540
2	Naik	107704	Y	13150	3945	3500	445	290	735	949949280
3	Havildar	73288	Y	14290	4287	3500	787	512	1299	1142382168
4	Nb Subedar	15312	Y	21350	6405	4650	1755	1141	2896	532122624
5	Subedar	23425	Y	23940	7182	4770	2412	1568	3980	1118778000
6	Subedar Major	3533	Y	24570	7371	4830	2541	1652	4193	177766428
7	Hony Lt	2094		27000	8100	8100	0	0	0	0
8	Hony Capt	1178		27700	8310	8310	0	0	0	0
	Total	374805								4214579040

TOTAL AMOUNT OF FINANCIAL IMPLICATION IS Rs 421.45 CRORES

Note: Financial implication has been calculated by considering modified parity rate for existing pensioners because it is not possible to determine/calculate existing rates of family pension as it is based on last pay of the individual which varies from person to person.

-38/G-

TABLE - 3

FINANCIAL IMPLICATION FOR GRANT OF BENEFIT TO PRE-2006 PBOR FAMILY PENSIONERS IN LINE WITH THE 08.03.2010 GOVERNMENT LETTER GRANTING BENEFIT TO PRE-2006 PBOR PENSIONERS

S No.	Rank of Army corresponding rank in Navy and Air Force	Estimated number of 2006 Family Pensioners	Group for pension as representative	Fitment of the maximum of the previous pay scale (V CPC) under VI CPC as per SAI 1/S/2008	Proposed revised SFP of pre-2006 Family Pensioners (60% of Col 5)	Existing SFP (Modified parity rate as per Table 3 of Circular No. 458 dated 18.03.2011 based on GoI/MoD letter No. 17 (4)/2008 (i)/D (P/P)/Vol V dated 15.02.2011) of Pre-2006 Family Pensioners	Average increase in Pension (Col 6 minus Col 7)	DR @ 65% w.e.f. 1/1/2012 i.e. 65% of Col 8	Per capita increase in SFP (col 8 plus col 9)	Financial effect per year including DR
1	2	3	4	5	6	7	8	9	10	11
1	Sepoy	11950	Y	12000	7000	7000	0	0	0	0
2	Naik	8681	Y	13150	7000	7000	0	0	0	0
3	Havildar	5907	Y	14290	8574	7000	1574	1024	2598	184156632
4	Nb Subedar	1234	Y	21350	12810	10140	2670	1736	4406	65244048
5	Subedar	1888	Y	23940	14364	10380	3984	2590	6574	148940544
6	Hony Lt	169		27000	16200	16200	0	0	0	0
7	Hony Capt	95		27700	16620	16620	0	0	0	0
	Total	30208								422281224

TOTAL AMOUNT OF FINANCIAL IMPLICATION IS Rs 42.22 CRORES

Note: Financial implication has been calculated by considering modified parity rate for existing pensioners because it is not possible to determine/calculate existing rates of family pension as it is based on last pay of the individual which varies from person to person.

-38/H-

TABLE - 4

FINANCIAL IMPLICATION FOR GRANT OF BENEFIT TO PRE-2006 PBOR FAMILY PENSIONERS IN LINE WITH THE 08.03.2010 GOVERNMENT LETTER GRANTING BENEFIT TO PRE-2006 PBOR PENSIONERS

S No.	Rank of Army corresponding rank in Navy and Air Force	Estimated number of 2006 Family Pensioners	Group for pension as representative	Fitment of the maximum of the previous pay scale (V CPC) under VI CPC as per SAI 1/S/2008	Proposed revised LFP of pre-2006 Family Pensioners (100% of Col 5)	Existing SFP (Modified parity rate as per Table 3 of Circular No. 458 dated 18.03.2011 based on GoI/MoD letter No. 17 (4)/2008 (i)/D (P/P)/Vol V dated 15.02.2011) of Pre-2006 Family Pensioners	Average increase in Pension (Col 6 minus Col 7)	DR @ 65% w.e.f. 1/1/2012 i.e. 65% of Col 8	Per capita increase in SFP (col 8 plus col 9)	Financial effect per year including DR
1	2	3	4	5	6	7	8	9	10	11
1	Sepoy	5297	Y	12000	12000	10600	1400	910	2310	146832840
2	Naik	3848	Y	13150	13150	11000	2150	1398	3548	163832448
3	Havildar	2618	Y	14290	14290	11400	2890	1879	4769	149822904
4	Nb Subedar	547	Y	21350	21350	16900	4450	2893	7343	48199452
5	Subedar	837	Y	23940	23940	17300	6640	4316	10956	110042064
6	Sub Maj	126	Y	24570	24570	17500	7070	4596	11666	17638992
7	Hony Lt	75		27000	27000	27000	0	0	0	0
8	Hony Capt	42		27700	27700	27700	0	0	0	0
	Total	13391								636368700

TOTAL AMOUNT OF FINANCIAL IMPLICATION IS Rs 63.63 CRORES

Note: Financial implication has been calculated by considering modified parity rate for existing pensioners because it is not possible to determine/calculate existing rates of family pension as it is based on last pay of the individual which varies from person to person.

E -41/A

Office of the Controller General of Defence

Accounts, Ulan Batar Road, Palam,

Delhi Cantt – 110010

Subject: Issues to be discussed before Committee of Secretaries headed by Cabinet Secretary - reg

Reference: MoD ID No. 12 (11)/2012- (Pension/Policy) dated 23.7.2012  

          With reference to above, Ministry may be intimated that comments of this HQ office along with financial implications involved on the proposal for enhancement of pension of pre-2006 commissioned officer pensioners with reference to notional pay in the revised pay structure corresponding to minimum pay in the pre-revised pay scales for the rank as per fitment tables attached with SAI 2/S/2008 has already been conveyed vide this HQ office UO of even No dated 25^th June 2012. A copy of the same is attached herewith for information and further necessary action in the matter.

Sd/-----------------

Jt CGDA (AT-II)

Ms A. S. Lakshmi

Joint Secretary (ESW)

MoD Deptt of Ex-Servicemen Welfare

No. 5698/AT-P/6^th CPC/Committee/Vol – IV dated 23^rd July 2012

-49/A-

Office of the Controller General of Defence

Accounts, Ulan Batar Road, Palam,

Delhi Cantt – 110010

Subject: Pay/Pensionary issues of Defence personnel to be considered by a Committee

Reference: MoD ID No. 12 (11)/2012- (Pension/Policy) dated 24.7.2012  

          The desired financial implication of benefit of adding weightage of three years in qualifying service of three lowest ranks of pre-2006 retiree PBOR, obtained from Pr CDA (Pensions), Allahabad, is enclosed herewith as Table -1

2.      Ministry may be intimated that on implementing the proposed methodology. Although the three lower ranks would get some enhancement in their current pension but the gap in pension for pre-2006 PBOR pensioners vis-à-vis post-2006 PBOR pensioners remains almost same.

3.       Attention of  Ministry is, however, also invited to the provisions of MoD letter No. 17 (4)/08/2/D (Pen/Policy) dated 18.8.2010 in terms of  which benefit of adding weightage in qualifying service has also been allowed for calculating minimum guaranteed pension of post-2006 retiree PBOR to protect pension of post-2006 retiree PBOR vis-à-vis pre-2006 retiree PBOR. Hence, if the proposed benefit is allowed to three lower ranks of pre-2006 retiree PBOR, the same should be extended to post-2006 retirees to maintain the parity already established. However, the financial implications for future retirees cannot be worked out as the same depends upon number of retirements and also their pension which may vary from case to case. However, a comparative table indicating the enhanced pension taking into account the enhanced weightages, is being attached as Table -2 for information please.

Sd/-------

For CGDA

Sh Harbans Singh

OSD (Pension)

MoD, Deptt of Ex-Servicemen Welfare

UO No. 5698/AT0P/6^th CPC/Committee/Vol – IV dated 26^th July 2012.            

Table – 1

FINANCIAL IMPLICATION FOR GRANT OF ADDITIONAL WEIGHTAGE TO THREE LOWEST RANK OF PRE-2006 PBOR PENSIONERS

S No.	Rank of Army and corresponding ranks in Navy/Air Force	Estimated numbers of pr-2006 pensioners	Group for pension	QS	Existing pension of pre-2006 retirees in terms of MoD letter dated 8.3.2010	Proposed pension with increased weightage	Average increase in pension Col 7-Col 6)	DR @65% on Col 8	Per capita increase in Service pension (Col 8 + Col 9)	Actual financial implications including DR (Col 3 x Col 10 x 12
1	2	3	4	5	6	7	8	9	10	11
1	Sepoy	67161	Y	20	5523	6075	552	359	911	734204052
2	Naik	500805	Y	22	6046	6650	604	393	997	5991631020
3	Havildar	481891	Y	24	6564	7220	656	427	1083	6262655436

TOTAL ANNUAL FINANCIAL IMPLICATIONS = Rs 1298.85 cr

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Office of the Controller General of Defence

Accounts, Ulan Batar Road, Palam,

Delhi Cantt – 110010

Subject: Pay/Pensionary issues of Defence personnel to be considered by a Committee

Reference: MoD ID No. 12 (11)/2012- (Pension/Policy) dated 27.7.2012  

          As desired, the information regarding percentage of notification of family pension in each rank and type of pension indicated while calculating the financial implication for enhancement of ordinary/special/liberalised family pension of pre-2006 PBOR pensioners, has been obtained from Pr CDA (P) Allahabad and is enclosed herewith. Soft copies of the calculation tables are also forwarded through email at ID xxxxxxxx. 

Sd/----------

For CGDA

Ms Malathi Narayanan

Under Secretary (Pension/Policy)

MoD, Deptt of Ex-Servicemen Welfare

UO No. 5698/AT-P/6^th CPC/Committee/Vol-IV dated 30^th July 2012

The Calculation is based on actual % of ordinary family pension notified by this office

Rank Code	Rank	Actual OFP notified		Percentage		Estimated rank wise OFP	Estimated rank wise SFP	Estimated rank wise LFP
0	Recruit	73	1133	2.548882682	39.56	148273	11950	5297
1	Sepoy	1060		37.01117318
2	Hon Naik	4	823	0.139664804	28.74	107704	8681	3848
H	TS Naik	223		7.786312849
3	Naik	596		20.81005587
4	Hon. Hav	3	560	0.104748603	19.55	73286	5907	2618
5	Havildar	557		19.44832402
6	Hon Nb Sub	23	117	0.803072626	4.09	15312	1234	547
7	Nb Sub	94		3.282122905
8	Sub	171	179	5.970670391	6.25	23425	1888	837
K	Sub Clk	8		0.279329609
9	Sub Maj	19	27	0.663407821	0.94	3533	285	126
M	Hon Sub Maj	8		0.279329609
L	H Sub Lt	16	16	0.558659218	0.56	2094	169	75
G	H Sub Capt	3	9	0.104748603	0.31	1178	92	42
N	H/Sub/Capt	6		0.209497207
		2864		100		374805	30208	13391

Assessed strength of Armed Forces personnel as on 01.04.2006

S No	Type of pension	Rough assessed	%age
1	Ordinary Family Pension	374805	89.58
2	Special Family Pension	30208	7.22
3	Liberalised Family Pension	13391	3.20
		418404	100

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SUBJECT; PENSION ISSUE OF HONY LIEUTENANT/CAPTAIN

          Post 6^th CPC implementation, Hony Lt and Capt are given the benefit of fixation in PB-3 as in the case of Regular Commissioned Officers Lieutenants and Captains with the Grade Pay of Rs 5400 and Rs 6100 respectively (SAI 1/S/2008). Pre-06 Hony Lt and Capt had a fixed pay of Rs 10500 and 10850 respectively. During 4^th CPC Hony Lt and Capt were given consolidated pay of Rs 3100 and Rs 3300 respectively which was revised to Rs 10500 and 10850 respectively by 5^th CPC. The grievance of the Hony COs is that they have not been the benefit of multiplier 1.86 in their pre-06 pension like others and instead their pension has been revised w.r.t Pay Band 3. This, they claim has lowered their pension. 

2.      A comparison of the pension revision of Hony Commissioned Officers with Regular Commissioned Officers is as below: -

S No.	Rank	5th CPC Pay Scales	Pension based on multiplier 1.86	Current Pension based on 6th CPC PB-3
1	Reg Lt #	8250-300-10050	11358**	15600+5400+6000/2 = 13500
2	Reg Capt*	9600-300-11400	12882**	15600+6100+6000/2 = 13850
3	Hony Lt #	10500	19530+5400+6000/2 = 15465	15600+5400+6000/2 =13500
4	Hony Capt*	10850	20181+6100+6000/2 = 16145	15600+6100+6000/2 = 13850

          # Hony Lt/Capt were in fixed pay prior to 6^th CPC.

          * Whereas Regular Cos were in designated pay scales

** Taken from the consolidated table 1 of Govt letter dated 11.11.08 taking pay at the maximum for calculating the pension.

3.       This issue again came up for consideration at the time of implementation of Cab Secy Committee report. While implementing the recommendation on improving the pension of pre-06 Personnel Below Officer Rank (PBORs), the revision of Hony Lt/Capt was also considered. After a good deal of discussion in the Deptt of Expenditure a view was taken that since applying multiplier of 1.86, their pension would be more than that of Reg COs and since they have got the benefit of higher PB-3, their pension was not disturbed. It was thought prudent not to create imbalance and accordingly no further improvement was made. This position was discussed in our Note which was placed before Hon’ble RM for approval before issuing Govt letter dated 08.03.2010.         

4.      While implementing the recommendations of Cab Secy Committee, 2009 for pre-06 PBORs in Govt letter dated 08.03.2010,  a table 133 for Viceroy Commissioned Officer (VCOs) was inadvertently included allowing the pension revision as indicated in Para 3 above. This, however, was deleted vide Govt letter dated 15.04.2011, as there was no VCO existing. This had the concurrence of MoD (Fin) and Deptt of Exp. However, notwithstanding the deletion, many AFTs gave judgments in favour of Hony COs for higher pension indicated in table in Para 3.   

5.       In so far as AFT, Chandigarh order dated 30.05.2011 filed by Hardev Singh & Others Vs UoI & Ors is concerned, it was proposed to file an appeal in the Supreme Court. However, on the basis of the Hon’ble Supreme Court order dated 23.03.2102 in criminal appeal No. 564 of 2012 UoI Vs Brig P S Gill & Civil Appeal No. 3046 of 2012 Kirit Kumar Awasthi Vs UoI and Ors, such cases have been sent back by Ministry of Law to obtain necessary certificate from the Hon’ble AFT under section 31 of AFT Act 2005. AG/PS-4 (L) has taken up the matter.      

To be continued