Presentation on OROP by CGDA on 02 May 2014 - Notional Pay based Pension was Option II

Presentation of the CGDA on OROP on 2^nd May 2014

Slide 2                         Outline

• One Rank One Pension (OROP)
• Key terms used in OROP definition
• Current Pension structure
• Proposal of the Services
• Options Available
• Conclusion

Slide 3                                     One Rank One Pension (OROP)

            Scope defined in the meeting held on 26.2.2014 chaired by Hon’ble RM (MoD ID dated 26.2.2014)

            “One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service irrespective of the date of their retirement and any future enhancement in the rates of pension to be automatically passed on to the past pensioners.

            This implies bridging the gap between the rates of pension of the current pensioners and the past pensioners and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.”

Slide 4             Key terms used in OROP definition

• Uniform Pension

• Uniform pension means pension under a uniform pay/pension structure i.e. under the  pay scales with the same qualifying service and same pension calculation formula
• Does not mean same (equal) pension to all retirees (past & current)

·       Rank

·        Officers – Rank held at the time of retirement

·        JCOs/ORs – Rank with their trades/group last held at the time of retirement

Slide 5             Key terms (contd)

• Length of Service
• Total service qualifying for pension
• Qualitative comparison of length of service in terms of number of years rendered in each rank before retirement

·        Past & Current Pensioners

·        Pensioners retired during currency of pay commission are on the same structure

·        The date of implementation of Sixth CPC should be reckoned as a cut off date for the past & current pensioners

Slide 6             Key terms (contd)

• Future Enhancements

• Pay structure with annual increments relevant for serving personnel
• Method of bringing parity between the past & current retirees should be linked with the pension structure and not the pay structure

Slide 7             Key terms (contd)

• Bridging the gap in Pension
• Ministry has defined to bridge the gap in pension between the rates of pension
• While bridging the gap in pension between pre and post 2006 category for the maximum number of personnel, some variation may persist  

Slide 8             Proposal of the Services: An Analysis

• The various features of the proposal have been examined and grouped into three categories as follows

• Agreeable features/points
• Will disturb Pension structure and needs to be referred to the Pay Commission
• Beyond the purview of the Working Group

Slide 9             Proposal of the Services (contd)

• Points of agreement

 Initial upgradation of pension will be made from 1^st April 2014 [Para 9 (a)]

• Linkage of full pension with 33 years of QS shall be removed [Para 9 (b)]

• For Sepoy, Naik & Havildar, the ceiling of 32 years of QS shall be removed [Para 9 (c)]

Slide 10           Proposal of the Services (contd)

• Issues which will disturb Pension Structure and need to be referred to Pay Commission

• Qualifying service be rounded off to the nearest completed year [Para 5]

• Notional pension based on the highest pay, as on 1^st July actually drawn (inclusive of annual increment) by each rank with reference to the length of QS shall be allowed to past pensioners [Para 7]

• Definition of OROP does not differentiate between different pay groups/services, highest pay drawn by each rank irrespective of pay groups, shall be taken into account across the three services [Para 8] 

Slide 11           Proposal of the Services (contd)

• Issues which will disturb Pension Structure and need to be referred to Pay Commission

• After initial upgradation, pension will be revised on 1^st July every year starting from 1^st July 2014 [Para 9 (a)]

• If revised pension for a rank at any length of service is less than the pension for the same rank for lower length of service, pension of higher length of service shall be stepped up to the level of lower length of service for that rank [Para 9 (f)]

• If live data is not available for any rank/length of service, pension for the next higher rank for same length of service to be taken reducing the pension by half the amount of difference in Grade pays of the two ranks [Para 9 (k)]

Slide 12           Proposal of the Services (contd) 

• Beyond the scope of OROP

• Honorary Nb Sub, MACP Nb Sub & equivalents will be granted the pension of Nb Sub [Para 9 (j)]

• Change/improvements in Hony Lt/Capt shall be applicable to regular commissioned officers in the ranks of Lieutenant & Captain, if it is beneficial [Para 9 (j)]

• Condition for counting of reduced service in the ranks for pre-1986 retiree officers shall be removed in order to pay all retirees with the same criteria [Para 9 (m)]

Slide 13           Proposal of the Services (contd)

• Beyond the scope of OROP

• Pension of current pensioners for all time bound ranks (up to Colonel) to be extended to past pensioners with same length of commissioned service, if the past pensioners had retired before 16^th December 2004

• For this purpose, years of service will be relevant and tables for higher rank shall be taken into consideration to determine pension [Para 9 (n)]

• Any changes in the policy regarding pay or promotion which affect the pay/pension of future pensioners shall also be passed on to the past pensioners from the same date [Para 10].  

Slide 14           Option Proposed

• For implementation of OROP based on the existing norms viz. Rank, Pay drawn, Qualifying service etc, following two options are proposed

• Option I           On the basis of average/mean amount of pension for all current retirees

• Option II          On allowing notional increments on minimum of fitment tables for the rank last held

Slide 15                       Option I

• Pension differs for the same rank and the same qualifying service due to different pay drawn by each individual

• To neutralise the difference, an average (arithmetic mean) of pension of all current pensioners (post 2006) could be determined and applied to past pensioners

• Protection for pst-2006 pension drawing less than the mean shall be required

• Those drawing pension above the mean continue to get the higher amount of pension

Slide 16                       Option II

• Service rendered in the rank held last shall be considered

• Minimum of fitment tables for the rank last held to be taken as a benchmark on 1.1.2006

• The increments earned during the service in the last rank held shall be notionally allowed @ 3% over the minimum of fitment tables

• 50% of the amount so fixed could be considered as pension

Slide 17           Comparative Statements

Rank	Pension pre-2006	Pen range post-2006	Option I	Option II
Major (QS 22 years)	16550	19285-22745	21484	22855 (10 increments)
Colonel (QS 26 years)	27795	26745-34570	31376	32620 (10 increments)
Brigadier (QS 33 years	29145	30475-37985	34822	33320 (5 increments)
Maj Gen (QS 33 years)	30350	35410-38500	37131	36665 (7 increments)

Slide 18           Comparative Statements

Rank	Pension pre-2006	Pen range post-2006	Option I	Option II
Hav Y QS 24 years	7375	7005-11000	7443	7495 (10 increments)
Subedar Y QS 28 years	11970	10455-14370	11971	12375 (10 increments

Slide 19                       Implementation Approach

• Option I
• Implementation is easy and can be implemented through Table based circulars
• Pension across the three services for a particular Qualifying service will be taken into account & mean calculated
• After issue of Government letter and circular thereon, payment is to be made by PDAs
• It can be implemented in short time

Slide 20                       Implementation Approach

• Option II
• Notional Pay after allowing the increments in last rank will be required from Pay Accounting Authorities
• Current PDA details would be required
• Corrigendum PPO have to be issued by PSAs based on LPC-cum-Data Sheet
• It is time taking process as more than 18 lakh cases will be involved

 [My comment: - Option II appears to be the Notional Pay based pension!😊 Only the Concordance Tables 😒 appears not to have been thought of!!