Aerial View : With Pension based on Notional Pay, What happens to OROP? With some tables to help you

Thursday 10 May 2018

With Pension based on Notional Pay, What happens to OROP? With some tables to help you

Dear Readers,

With Pension based on Notional Pay, What happens to OROP? Any expert comments are welcome

Below are some of the ready references.

A. GoI, MoD No 17(4)/2008(1)/D(Pen/Policy) dated 11.11.2008

“4. Consolidation of Pension

4.1. The Pension/Family Pension of existing Pre-1.1.2006 pensioners/family pensioners will be consolidated with effect from 1.1.2006 by adding together:

(i) The Existing Pension (including commuted portion of pension, if any)/ Existing Family Pension.

(ii) Dearness Pension, if any, as applicable from 1.4.2004 to those retired /died prior to 1.4.2004.

(iii) Dearness Relief upto AI CPI (IW) 536 i.e. 24% of basic pension/family pension plus dearness pension.

(iv) Fitment weightage @ 40% of the Existing Pension/Existing Family Pension. Where the amount of fitment weightage work s out in fraction of a rupee, it will be rounded off to the next higher rupee.

NOTE: Where the Existing Pension/Existing Family Pension includes the effect of merger of 50% of Dearness Pay in respect of those retired/died on or after 1.4.2004, the existing pension/family pension for the purpose of fitment weightage will be re-calculated after excluding the merged Dearness Pay of 50% from emoluments for computation of existing pension/existing family pension. This will be in line with the definition of “Existing Pension” and “Existing Family Pension” given in Para 3 of these orders.

4.2. The amount so arrived at in terms of Para 4.1 above will be regarded as consolidated pension/family pension with effect from 1.1.2006. Since the consolidated pension will be inclusive of commuted portion of pension, if any, the amount of pension commuted will be deducted from the said amount while making monthly disbursements.

5. The consolidation of pension will further be subject to the provision that the consolidated pension, in no case shall be lower than fifty percent of the minimum of the pay in the pay band plus the grade pay corresponding to the pre revised scale from which the pensioner had retired/discharged including Military Service Pay and ‘X’ Group pay where applicable.

For example, if a pensioner had retired in the pre-revised scale of pay of 6600 – 170 – 9320, the corresponding pay band being 9300 - 34800 and the corresponding grade pay and Military Service Pay being Rs. 4,600/- and Rs. 2,000/- respectively, his minimum guaranteed pension would be 50% of Rs. 9300 + Rs 4600 + 2000 i.e. Rs 7,950 for 33 years of qualifying service. The pension so calculated will be reduced pro-rata, where the pensioner had less than the maximum required service of 33 years for full pension and in no case it will be less than Rs. 3,500/-. In case the pension consolidated as per Para 4.1 above is higher than the pension calculated in the manner indicated above, the same (higher consolidated pension) will be treated as Basic Pension with effect from 1.1.2006.

B. MoD, vide No. 12 (1)/2014/D (Pen/Policy) – Part II dated 3.2.2016 has stated as follows:

“6….. If revised pension as on 1.7.2014 worked out in terms of these orders happens to be less than the existing pension/family pension as on 1.7.2014, the pension shall not be revised to the disadvantage of the pensioner.

10. The OROP shall be basic pension from 1.7.2014…..”

C. GOI, MOD letter No. 1(2)/2016 - D(Pen/Pol) dated 30^th September 2016

“4…… Therefore, it has been decided that w.e.f. 1.1.2006 revised consolidated pension and family pension of pre-2006 armed forces pensioners shall not be lower than 50% and 30% respectively of the minimum of the pay in the Pay Band plus Grade Pay corresponding to the pre-revised scale from which the pensioner had retired/discharged/invalided out/died including Military Service Pay and Group X pay, if any, without pro-rata reduction of pension even if they had rendered qualifying service of less than 33 years at the time of retirement. Accordingly, Para 5 of this Ministry’s letter dated 11.11.2008 would stand modified to this extent.”

D. The Govt of India (and MoD) has approved (GoI, MoD letter No. 17 (01)/2016-D (Pen/Pol) dated 29^th October 2016) that pension in the 7^th CPC dispensation would be based on notional pay on the date of retirement/death. The exact wordings are as follows:

“It was provided in the ibid Govt letter (GoI, MoD letter No. 17 (01)/2016-D (Pen/Pol) dated 29^th October 2016. It was provided in the ibid Govt letter that the revised pension/family pension w.e.f. 1.1.2016 of pre-2016 pensioners/family pensioners shall be determined by multiplying the Basic Pension (before commutation/Basic Family Pension (exclusive of Dearness Relief) as has been drawn on 31.12.2015 by 2.57 to arrive at revised pension under 7^th CPC.

3. Revised pension/family pension of all Armed Forces Personnel who retired/died prior to 01.01.2016 shall be revised by notionally fixing their pay in the pay matrix recommended by the 7^th CPC in the level corresponding to the pay in the pay scale/pay band and grade pay at which they retired/died. This will be done by notional pay fixation under each intervening Pay Commission based on the formula for revision of pay. The revised rates of Military Service Pay, Non-Practising Allowance, where applicable and ‘X’ Group pay & Classification Allowance for JCOs/ORs, if applicable notified in terms of 7^th CPC orders, shall also be added to the amount of pay notionally arrived at under the 7^th CPC matrix and shall be termed as notional reckonable emoluments as on 01.01.2016….”

E: Some back of the envelope figures

Minimum Notional Pay of Lt Col viz. PIPB Rs 37400 + GP 8000 + MSP 6000 = Rs 51400 and pension Rs 25700 in the 13^th year of service.

With an annual increment of 3%, the Lt Col’s Notional Pay works out to Rs 55840 + 6000 = Rs 61840. Pension would therefore be Rs 30920 (rounded off to nearest Rs 10/-).

However, Table 1 of Circular 555 shows the pension of Lt Col at 20 years service as Rs 31305 i.e. the Notional Pay is Rs 62610.

But Annexure A of Circular 568 shows minimum Notional Pay for Lt Col (TS) as Rs 52530 and pension as Rs 26265.

Some (un)helpful tables? Some have forwarded these on WhatsApp. Hope they have checked accuracy as some figures have been intentionally changed to catch those plagiarists.

Remember what your pay + RP or PIPB+GP+MSP was on the date of your retirement?

Capt/Lt/Flt Lt
Component		4th Pay +RP			4th Pension					5th Pay + RP					5th Pension						6th Basic						6th Pay							6th Pension						7 CPC Basic				Pension		Family Pension
Xplier/Increment		Rs 100 pa			50%					Rs 300 pa					50%						3%						Basic + GP+MSP							50%										50%		30%
Rk Pay/ MSP/ Grade Pay		200								400											6100/6000																			15500
1		3000			1500					10000					5000						15600						27700							13850						61300				38400		23000
2		3100			1550					10300					5150						16260						28360							14180						63100				39300		23600
3		3200			1600					10600					5300						16940						29040							14520						65000				40300		24200
4		3300			1650					10900					5450						17640						29740							14870						67000				41300		24800
5		3400			1700					11200					5600						18360						30460							15230						69000				42300		25400
6		3500			1750					11500					5750						19100						31200							15600						71100				43300		26000
7		3600			1800					11800					5900						19860						31960							15980						73200				44400		26600
8		3700			1850					12100					6050						20640						32740							16370						75400				45500		27300
9		3800			1900					12400					6200						21450						33550							16775						77700				46600		28000
10		3900			1950					12700					6350						22280						34380							17190						80000				47800		28700
11		4000			2000					13000					6500						23140						35240							17620						82400				49000		29400
12		4100			2050					13300					6650						24020						36120							18060						84900				50200		30100
13		4200			2100					13600					6800						24930						37030							18515						87400				51500		30900
14		4300			2150					13900					6950						25870						37970							18985						90000				52800		31700
15		4400			2200					14200					7100						26830						38930							19465						92700				54100		32500
16		4500			2250					14500					7250						27820						39920							19960						95500				55500		33300
17		4600			2300					14800					7400						28840						40940							20470						98400				57000		34200
18		4700			2350																29890						41990							20995						101400				58500		35100
19		4800			2400																30970						43070							21535						104400				60000		36000
20		4900			2450																32090						44190							22095						107500				61500		36900
21		5000			2500																																			110700				63100		37900
22		5100			2550																																			114000				64800		38900
23		5200			2600																																			117400				66500		39900
24		5300			2650																																			120900				68200		40900
25																																								124500				70000		42000
26																																								128200				71900		43100
27																																								132000				73800		44300
28																																								136000				75800		45500
29																																								140100				77800		46700
30																																								144300				79900		47900
31																																								148600				82100		49200
32																																								153100				84300		50600
33																																								157700				86600		52000
34																																								162400				89000		53400
35																																								167300				91400		54800
36																																								172300				93900		56300
37																																								177500				96500		57900
38																																								182800				99200		59500
39																																								188300				101900		61100
40																																								193900				104700		62800

Maj/Lt Cdr/Sqn Ldr
Component		4th Pay +RP			4th Pension					5th Pay + RP					5th Pension						6th Basic						6th Pay							6th Pension						7 CPC Basic				Pension		Family Pension
Xplier/Increment		Rs 100 pa			50%					Rs 300 pa					50%						3%						Basic + GP+MSP							50%										50%		30%
Rk Pay/ MSP/ Grade Pay		600								1200											6600/6000																			15500
1		4000				2000				12800						6400					15600							28200							14100							69400		42500		25500
2		4100				2050				13125						6563					16270							28870							14435							71500		43500		26100
3		4200				2100				13450						6725					16960							29560							14780							73600		44600		26700
4		4300				2150				13775						6888					17670							30270							15135							75800		45700		27400
5		4400				2200				14100						7050					18400							31000							15500							78100		46800		28100
6		4500				2250				14425						7213					19150							31750							15875							80400		48000		28800
7		4600				2300				14750						7375					19930							32530							16265							82800		49200		29500
8		4700				2350				15075						7538					20730							33330							16665							85300		50400		30200
9		4800				2400				15400						7700					21550							34150							17075							87900		51700		31000
10		4900				2450				15725						7863					22400							35000							17500							90500		53000		31800
11		5000				2500				16050						8025					23270							35870							17935							93200		54400		32600
12		5100				2550															24170							36770							18385							96000		55800		33500
13		5200				2600															25100							37700							18850							98900		57200		34300
14		5300				2650															26060							38660							19330							101900		58700		35200
15		5400				2700															27040							39640							19820							105000		60300		36200
16		5500				2750															28050							40650							20325							108200		61900		37100
17		5600				2800															29090							41690							20845							111400		63500		38100
18		5700				2850															30170							42770							21385							114700		65100		39100
19																					31280							43880							21940							118100		66800		40100
20																					32420							45020							22510							121600		68600		41100
21																																										125200		70400		42200
22																																										129000		72300		43400
23																																										132900		74200		44500
24																																										136900		76200		45700
25																																										141000		78300		47000
26																																										145200		80400		48200
27																																										149600		82600		49500
28																																										154100		84800		50900
29																																										158700		87100		52300
30																																										163500		89500		53700
31																																										168400		92000		55200
32																																										173500		94500		56700
33																																										178700		97100		58300
34																																										184100		99800		59900
35																																										189600		102600		61500
36																																										195300		105400		63200
37																																										201200		108400		65000
38																																										207200		111400		66800

Lt Col/Cdr/Wg Cdr
Component		4th Pay + RP				4th Pension					5th Pay + RP					5th Pension						6th Basic						6th Pay							6th Pension						7 CPC Basic				7th Pension	Family Pension
Xplier/Increment		Rs 100 pa				50%					Rs 400 pa					50%						3%						Basic + GP+MSP							50%										50%	30%
Rk Pay/ MSP/ Grade Pay		800									1600											8000/6000																			15500
1		4700				2350					15100					7550						37400						51400							25700							121200			68400	41000
2		4800				2400					15500					7750						38770						52770							26385							124800			70200	42100
3		4900				2450					15900					7950						40180						54180							27090							128500			72000	43200
4		5000				2500					16300					8150						41630						55630							27815							132400			74000	44400
5		5100				2550					16700					8350						43120						57120							28560							136400			76000	45600
6		5200				2600					17100					8550						44660						58660							29330							140500			78000	46800
7		5300				2650					17500					8750						46240						60240							30120							144700			80100	48100
8		5400				2700					17900					8950						47870						61870							30935							149000			82300	49400
9		5500				2750					18300					9150						49550						63550							31775							153500			84500	50700
10		5600				2800					18700					9350						51280						65280							32640							158100			86800	52100
11		5700				2850																53060						67060							33530							162800			89200	53500
12		5800				2900																54900						68900							34450							167700			91600	55000
13		5900				2950																56790						70790							35395							172700			94100	56500
14																						58740						72740							36370							177900			96700	58000
15																						60750						74750							37375							183200			99400	59600
16																						62820						76820							38410							188700			102100	61300
17																						64950						78950							39475							194400			105000	63000
18																						67140						81140							40570							200200			107900	64700
19																																										206200			110900	66500
20																																										212400			114000	68400


Col/Capt (IN)/Gp Capt
Component		4th Pay + RP					4th Pension					5th Pay + RP					5th Pension						6th Basic						6th Pay							6th Pension						7 CPC Basic			7th Pension	Family Pension
Xplier/Increment		Rs 100 pa					50%					Rs 400 pa					50%						3%						Basic + GP+MSP							50%									50%	50%
Rk Pay/ MSP/ Grade Pay		1000										2000											8700/6000																			15500
1		5500					2750					17000					8500						37400						52100							26050						130600			73100	43800
2		5600					2800					17450					8725						38790						53490							26745						134500			75000	45000
3		5700					2850					17900					8950						40220						54920							27460						138500			77000	46200
4		5800					2900					18350					9175						41690						56390							28195						142700			79100	47500
5		5900					2950					18800					9400						43210						57910							28955						147000			81300	48800
6		6000					3000					19250					9625						44770						59470							29735						151400			83500	50100
7		6100					3050					19700					9850						46380						61080							30540						155900			85700	51400
8		6200					3100					20150					10075						48040						62740							31370						160600			88100	52800
9		6300					3150					20600					10300						49750						64450							32225						165400			90500	54300
10		6400					3200					21050					10525						51510						66210							33105						170400			93000	55800
11		6500					3250																53320						68020							34010						175500			95500	57300
12		6600					3300																55190						69890							34945						180800			98200	58900
13		6700					3350																57110						71810							35905						186200			100900	60500
14																							59090						73790							36895						191800			103700	62200
15																							61130						75830							37915						197600			106600	63900
16																							63230						77930							38965						203500			109500	65700
17																							65390						80090							40045						209600			112600	67500
18																							67620						82320							41160						215900			115700	69400

Brig/Cmde (IN) /Air Cmde
Component		4th Pay + RP					4th Pension					5th Pay +RP					5th Pension						6th Basic						6th Pay							6th Pension						7 CPC Basic			7th Pension	Family Pension
Xplier/Increment		Rs 150 pa					50%					Rs 450 pa					50%						3%						Basic + GP+MSP							50%									50%	30%
Rk Pay/ MSP/ Grade Pay		1200										2400											8900/6000																			15500
1		6150						3075				19100						9550					37400							52300							26150					139600			77600	46500
2		6300						3150				19550						9775					38790							53690							26845					143800			79700	47800
3		6450						3225				20000						10000					40230							55130							27565					148100			81800	49100
4		6600						3300				20450						10225					41710							56610							28305					152500			84000	50400
5		6750						3375				20900						10450					43230							58130							29065					157100			86300	51800
6		6900						3450				21350						10675					44800							59700							29850					161800			88700	53200
7		7050						3525				21800						10900					46420							61320							30660					166700			91100	54700
8		7200						3600				22250						11125					48080							62980							31490					171700			93600	56200
9		7350						3675				22700						11350					49790							64690							32345					176900			96200	57700
10		7500						3750				23150						11575					51560							66460							33230					182200			98900	59300
11		7650						3825															53380							68280							34140					187700			101600	61000
12		7800						3900															55250							70150							35075					193300			104400	62600
13		7950						3975															57180							72080							36040					199100			107300	64400
14		8100						4050															59170							74070							37035					205100			110300	66200
15																							61220							76120							38060					211300			113400	68000
16																							63330							78230							39115					217600			116600	69900
17																							67000							81900							40950

Maj Gen/R Adm/Air Vice Mshl
Component			4th Pay					4th Pension					5th Pay					5th Pension						6th Basic						6th Pay							6th Pension					7 CPC Basic			7th Pension	Family Pension
Xplier/Increment			Rs 200 pa					50%					Rs 500 pa					50%						3%						Basic + GP+MSP							50%								50%	30%
Rk Pay/ MSP/ Grade Pay			Nil										Nil											10000/Nil																		15500
1			5900						2950				18400						9200					53000							63000							31500				144200			72100	43300
2			6100						3050				18900						9450					54890							64890							32445				148500			74300	44600
3			6300						3150				19400						9700					56840							66840							33420				153000			76500	45900
4			6500						3250				19900						9950					58850							68850							34425				157600			78800	47300
5			6700						3350				20400						10200					60920							70920							35460				162300			81200	48700
6			6850						3425				20900						10450					63050							73050							36525				167200			83600	50200
7			7000						3500				21400						10700					65250							75250							37625				172200			86100	51700
8			7150						3575				21900						10950					67510							77510							38755				177400			88700	53200
9			7300						3650				22400						11200					69840							79840							39920				182700			91400	54800
10																								72240							82240							41120				188200			94100	56500
11																								74710							84710							42355				193800			96900	58100
12																								77260							87260							43630				199600			99800	59900
13																								79880							89880							44940				205600			102800	61700
14																								82580							92580							46290				211800			105900	63500
15																								85360							95360							47680				218200			109100	65500

Lt Gen/V Adm/Air Mshl HAG
Component				4th Pay					4th Pension					5th Pay					5th Pension						6th Basic						6th Pay							6th Pension					7 CPC Basic		7th Pension	Family Pension
Xplier/Increment				Rs 100 pa					50%					Rs 500 pa					50%						3%						Basic + GP+MSP							50%							50%	30%
Rk Pay/ MSP/ Grade Pay				Nil										Nil											Nil																		Nil
1				7300	3650									22400						11200					69000						69000							34500					182200		91100	54700
2				7400	3700									22950						11475					71070						71070							35535					187700		93900	56300
3				7500	3750									23500						11750					73210						73210							36605					193300		96700	58000
4				7600	3800									24050						12025					75410						75410							37705					199100		99600	59700
5				7700	3850									24600						12300					77680						77680							38840					205100		102600	61500
6				7800	3900									25150						12575					80020						80020							40010					211300		105700	63400
7				7900	3950									25700						12850					82430						82430							41215					217600		108800	65300
8				8000	4000									26250						13125					84910						84910							42455					224100		112100	67200

Lt Gen/V Adm/Air Mshl : HAG+
Component	4th Pay				4th Pension									5th Pay						5th Pension						6th Basic						6th Pay						6th Pension					7 CPC Basic		7th Pension	Family Pension
Xplier/Increment																										3%						Basic + GP+MSP						50%							50%	30%
Rk Pay/ MSP/ Grade Pay	Nil													Nil												Nil																	Nil
1																										75500							75500						37750				205400		102700	61600
2																										77770							77770						38885				211600		105800	63500
3																										80110							80110						40055				217900		109000	65400
4																										82520							82520						41260				224400		112200	67300

21 comments:

Anonymous10 May 2018 at 21:57
Sir, without first having a rationalization of OROP, any fixation of a "notional pay" under 7CPC, or revision of 7CPC pensions based on the same, has the potential of causing further confusion.

Unless the concept of QS is tied in with notional pay, as well as with the concept of migrating older retirees to higher current matrix levels commensurate with their QS, the whole issue of pensions for ESM will remain riddled with anomalies.

I do not think the older Govt letters can address these issues.

Some of the possible anomalies were brought out here https://goo.gl/beqmPS .
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smadhan11 May 2018 at 10:52
It is very confusing so, let's make it simple. All those officers who has color service more than 33 yrs service be fixed at the max of the index ie at the 20th level and that should be his notional pay and pension. that's 212000 + 15500 = 227500/2 = 113750/- for a Lt Col and accordingly for col and others as it was finally done after OROP.
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Col MS Raju11 May 2018 at 11:02
Sir,
All pre-2006 retirees if given pension for their length of service and rank as per the pay scales/pay matrix laid for each Pay Commission era. It will amount OROP.I will bring out certain examples here about officers retiring in 7th CPC. A Lt Col with 20 years’ service had spent 7 years in Lt Col Rank. He then would be drawing basic pay immediately before retirement as per 7th CPC pay matrix is Rs 144700 + MSP 15500 = Total pay drawn immediately before retirement is 160200, then his pension will be Rs 80100/- and this amount of pension will prevail during entire 7th pay commission because Lt Cols with 20 years’ service retiring in any year (from Jan 2016 to Dec 2025) would be getting same pension of Rs 80100/- unless the pay matrix or MSP is revised with hike.
Similarly, a Lt Col with 25 years’ service would have spent 12 years in Lt Col rank and his last pay drawn immediately before retirement as per 7th CPC Pay Matrix is Rs 167700 + MSP 15500 = Total pay 183200, thus his pension on retirement will be 50% of last pay drawn = 183200*.5= Rs 91600/- This is better than any OROP. This pension for Lt Cols 25 years’ service would prevail for entire 7th CPC era unless there is any revision made by the Govt either in pay matrix or in MSP.
A Lt Col with 30 years’ service would have spent 17 years in Lt Col rank and his last pay drawn immediately before retirement as per 7th CPC Pay Matrix is 194400 plus MSP 15500 = Total pay 209900 and his pension on retirement in any year during 7th CPC will be Rs 104950 (209900*.5).
A Lt Col with 33 years’ service would have spent 20 years in Lt Col rank and his last pay drawn immediately before retirement as per 7th CPC Pay Matrix is 212400 plus MSP 15500 = Total pay 227900 and his pension on retirement any time in 7th CPC era would be Rs 113950 (227900*.5)
Service for above 33 years would be worked out by granting 3% annual increment beyond 33 years since the 33 years’ rule has been scrapped in 6th CPC.
The blunder which Govt has done is granting pension of 26265 per month for aa Lt Cols with 20 years to 38 years qualifying service from 01 Jan 2006 when the 33 years’ rule was scrapped can never be justified in any way.
Implementing pay commission pay matrix in every pay commission for all officers irrespective of date and year of retirement would be much better than OROP. Why should OROP carry annual increment? I will quote a simple example. There are two Lt Cols with 20 years of service. One retires at 20 years and the other one continues in service. The person retires after 20 years he would always get pension for 20 years’ service only and the officer who continued in service may serve for 33 years and he gets pension for 33 years’ service. This clearly indicates that the active service grants increments for every year whereas a retiree getting pension for fixed number of years would keep getting pension for life time for the fixed years of service he had.
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