Monday 12 September 2016

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 6th 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: 21st 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/6th CPC/Committee/Vol –IV dated 23rd July 2012.


-38/E-
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.


-38/F-
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 25th 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/6th CPC/Committee/Vol – IV dated 23rd 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/6th CPC/Committee/Vol – IV dated 26th 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














-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 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/6th CPC/Committee/Vol-IV dated 30th 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

-61/A-

SUBJECT; PENSION ISSUE OF HONY LIEUTENANT/CAPTAIN

          Post 6th 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 4th 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 5th 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 6th 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     


9 comments:

  1. Sir, the utter lack of transparency in the manner by which OROP figures were computed has been uppermost in minds of several classes of ESM and the subject of representations to the One Man Judicial Committee.

    The information that is now going to be made available to veterans through your RTI initiative should have been made available by the Govt at the time of what was called "OROP implementation".

    It will be of extreme value to ESM to learn what logic was advanced for explaining the inexplicable, justifying the unjustifiable such as anomalies and discrepancies of the kind highlighted here http://goo.gl/sWCpGs.

    ReplyDelete
  2. It will surely be very interesting to read.

    ReplyDelete
  3. Dear Sir,
    Even though the term OROP had been mentioned in the correspondence, the subject of discussion in these notes and letters actually pertains to the run up to CSC-09 and CSC -12.
    Will there be some info on how OROP was computed in 2015 ?
    Thanks and regards.

    ReplyDelete
    Replies
    1. Information declined as the OMJC is yet to make its recommendations and decision taken. By why would CGDA change its methodology of calculations from 2009 to 2012 to 2015?

      Delete
  4. Sir, the info. provided to you on Pay of Hony.Lt (HFO/H.sub.Lt) listed as page 61-A is not correct. Fixed Pay of Hony Lt & Hony Capt. as per 4 CPC is 3300 & 3400 respectively & not 3100 & 3300 as mentioned at page 61-A. Regards. HFO BL Kalra

    ReplyDelete
  5. Experts make the thing complicated
    and
    Touching your nose with hand round about the head
    If the 6th CPC interpretation had been done as it
    is given where is the question OROP and litigations.
    There is a proverb-JIS GAON ko SARPANCH NAHI HAI,USKO GEETHAD NE SARPANCH BAN JAATHAA HAI"

    ReplyDelete
    Replies
    1. You like quoting local proverbs a lot, don't you? Even if it means making garbled transliterations to try and make a point.

      I think the query "where is the question" may be hard to answer for someone who has not grasped the basics of all the ambiguities about the recommendations of VI CPC that required so much of representation and litigation to correct. What was "given", as you have put it, was so full of holes that the "interpretation" was bound to be defective.

      Delete
  6. As per subject 61-A for the sake of Regular Lt & Capt service Pension of Hony Comm Officers were not increased on 1-1-2006 & 1-7-2009.

    ReplyDelete