Wednesday, March 19, 2014

Extending the OROP Estimations To Pre VI CPC Colonel Retirees

It increasingly appears that OROP may not turn out to be a simple issue as far as implementation goes. My personal view gets firmer in my mind that "OROP" is an apt "platform" for obtaining equity and parity in terms of pensionary benefits. But it needs careful thought in devising and then implementing such a parity. Principles need to be kept in mind at the "design stage" itself for minimising anomalies in post implementation phase.

I'd again like to emphasise "minimising" over "eliminating" as it would be unrealistic to assume that unforeseen anomalies would not arise and these, if and when they do appear, would need to be tackled post implementation. But the foreseen ones need to be certainly taken care of prior to implementation of a wide-ranging concept such as OROP.

There have been some fairly extensive on-line attempts to make comprehensive tables for pensions under OROP. To my mind, the basic flaw in approaches I have seen is a tendency to attempt an adaptation of Circular 500. Those sorts of tables are static. Pension once fixed for past (read, pre CPC) retirees at a certain level, stays fixed. The very thrust of OROP would however mean a variation in pensions for previous retirees  in the same rank and with the same length of service. How can there be "One Rank One Pension", for the same length of service, if the "One Pension" does not keep changing to stay at the current level of pension of a current retiree in that rank with the same length of service?

It is to be borne in mind the pension of a current retiree in a specific rank with a certain length of service would be more, on account of increments in pay, as compared to the pension of another, also post CPC, retiree in the same rank with the same length of service who might have retired a year or two previously. So, OROP automatically implies that even pensions of past retirees would need to be incrementally upgraded each time a person retires in the present after receiving an annual increment in pay. How else would pension be "One Pension"?

Having considered the possibility of OROP involving some form of an increment system, perhaps it is time to rationalise some of the doubts that have arisen over the multitude of tables and spread-sheets that have sprung up. I have now attached a table as it pertains to the rank of Colonel. To clarify, the COS re-fixed the pension of pre VI-CPC Col retirees at Rs. 27795/- based on minimum of pay in post VI CPC pay-band. A reverse calculation would then appear to suggest that the minimum pay of Col, post VI CPC, in PB IV was Rs. 40890/-. Based on this, a table can be drawn up.

The table does not imply that a Colonel retiring, after 01 Jan 2006, at 20 years of service would get Rs. 31755/- as pension. What the table means is that if an Officer gets promoted to Col at 15 years of service as on 01 Jan 2006, 5 years later at a service length of 20 years, he would get a pension of Rs. 31755/- after factoring in the increments in basic pay.

For most cases, the pension of a Col retiring after 01 Jan 2006 would be determined by the level his pay was fixed at as on 01 Jan 2006. For a Col retiring today with a service of, say, 25 years, we'd have to determine at what level his basic pay was fixed as on 01 Jan 2006, 8 years ago, when he had a service of 16 years. Then we'd need to apply increments on the same lines as shown in the table for a person who became Col with 15 years of service as on 01 Jan 2006 with a pay fixation of 40890. The basic of the Col with 16 years of service, the one who will be retiring now with a service of 25 years, would probably be higher.

So, whatever the Col with 25 years of service gets as pension after retiring on 31 March, so must all the previous Colonels who retired previously also with 25 years of service. Now, if that is not OROP, it is high time a clarification was obtained from the Govt as to what it really is.

Feedback is invited in respect of the table and the contents of this blog post.

{Edit 1}: The table is now embedded. For a larger size view please click on the hyperlink in the the text of the blog post above.

{Edit 2}: For a fuller context, reference may please be made to previous blog-posts by following the hyperlink.




20 comments:

  1. While i could not find the table any where,is weightage factor taken into account?
    LT Gen's Published OROP tables takes into account weigtage factor also

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  2. Is this blog getting Oxygen from the Indian National Congress?
    If MPs, IAS, JUDGES CAN HAVE A CLEAR CUT DEFINITION OF OROP, why not the Defence who need more than any of the Groups mentioned

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  3. @Venkatesh VT: The hyper link to the table in the blog post is clearly discernible. If clicked upon it takes a blog reader to the table, as hyper links are supposed to.

    The table is also fairly self explanatory for coming to an understanding of the matters concerning this blog post.

    As to which table with weightage factor" you are referring to, I could not possibly comment as you have failed to provide a link.

    In any case, none of these tables are ready to use "OROP Pension Calculators", in case you have misunderstood the aim behind these.

    These are merely illustrative as my table clearly states in fairly bold notation. Think of these as mental exercises to grasp some of the various hues and shades OROP could assume. We will cross the weightage bridge when we get there.

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  4. @VED SACHAR: I think you had your caps lock key "on" for part of your comment.

    Do provide your interpretation in clear terms, if you possibly can, of what you term as a "clear cut definition" of OROP and I'm sure veterans of the defence services (I think that is what you meant by "the Defence")would acknowledge your grasp and knowledge of the matter.

    And as for the "Oxygen" bit, you have left most readers bewildered , I'm afraid. So we'll leave that aside, for the moment.

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  5. The service HQs appears have limited the max of incre available in the duration of a CPC say 9 and additional incre based on blocks limited to 3 for those put in longer service in previous CPC.Thus a full cols OROP WILL BE LIMITED TO 50% OF MIN PAY FOR RANK PLUS 11 INCRES.It will be in the range of 36500/-which matches with the tables of service HQs.

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  6. I missed the link since it was not in the standard blue color(force of habit of over 25 yrs seeing all links in blue)
    I was referring to the table circulated by Lt Gen Bahri & the link is https://groups.google.com/forum/#!topic/jvvsenavihar/z645XL0hgfE where suitable weightage is given & the concerned file is "Offrs OROP Calculation.xlsx"

    Sorry for not providing the link earlier
    The main issue is how to arrive at a solution which seems fair to all & also take care of all rules that the govt is going to throw at us & i am sure 7th PC will create more rules to frustrate us
    I for one would not mind losing few thousands if the solution is a simple one & can be understood by every one easily as well as implemented easily i.e. with out delay.
    Even today bankers are having tough time & giving a tough time to the pensioners due to their lack of understanding

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  7. @Unknown:"...Thus a full cols OROP WILL BE LIMITED TO...";

    You have not established any co-relation with the aspect of the no. of years of service.

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  8. @Venkatesh VT: I had seen that spreadsheet elsewhere also. It does not clarify how the figure of 43390/- for a service of 25 years in 2006 has been worked out for a Lt Col.

    The spreadsheet takes the case of just one batch that had a service of 25, 26, 27 years and so on from 2006 onwards. How does that help us to establish the post VI CPC pension of a post VI CPC Lt Col retiree with say 20 yrs, 21 yrs, 22 yrs and so on of service? We need those figures for establishing the equivalent pensions of pre VI CPC Lt Col retirees also with 20 yrs, 21 yrs, 22 yrs and so on of service.

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  9. It seems there is a lot of confusion to define OROP. It should not be that complicated.
    Let us consider NFFU as it exists for All India Gp 'A' Service officers. It says"whenever an IAS officer gets empanelled at a particular post in the Centre, all other Group-A service officers shall also be moved up to the same pay level after a period of two years from the date of empanelment. The upgradation of other Group-A officers shall not have any functional effect, that is, the upgradation shall only result in a higher pay or grade pay and would not lead to an enhanced status. Such officers shall maintain the status of their functional grade pay."
    Now imagine, an IAS officer of a particular batch gets empanelled. A system needs to be in place to immediately identify all the Gp "A" service officers and that too, exactly after 2 years, and move them up the NFFU chain. Too complicated? Isn't it mind boggling as to how to identify the officers across the wide spectrum and implement the NFFU?
    Nobody is complaining that it is too complex and administratively nightmarish! The simple truth is, where there is a will, there is always a way. That truth is, it is already in existence!This is the age of computerisation; once the requisite data is fed into a central computer system, implementation is a matter of pressing a few buttons.
    Can we apply the same logic to OROP? I think we should be able to. I have the following suggestions:
    1.All the pension records of pensioners showing the rank, grade pay, and length of service should be on a central computer system.
    2.PCDA(Pensions) should publish the highest pension fixed for each rank and the number of years commissioned service every six months.(This is a variable, but can be easily monitored)
    3.The pension so fixed should be automatically passed on to all the pensioners having the same rank and length service.
    4.The only difference between the pensions of selection grade and Time scale officers will be the difference due to grade pay.
    5. This is in principle, equivalent to NFFU upgradation on the civil side.
    With this there will be no confusion. All pre-2006 and post-2006 pensioners would draw the same pension at all times!

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  10. I just don't get it! How are the learned even imagining getting pensions higher than Lt Gens in Apex scale and the Army Cdrs!! Guys get real. There is a simple principle-pension of a higher rank has to be higher than that of lower rank. And the pensions of those are fixed, for Army Cdr at Rs 40,000. It therefore follows that Lt Gens will get less than 40,000, Maj Generals less than Lt Gens and so on down the line.

    Please stop hallucinating

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  11. Guys get real! This is as fanciful as it can get.

    A settled fact is that the pension of a lower rank can not be higher than that of a higher rank. The pension of an Army Cdr is fixed at Rs 40,000. All lower ranks will therefore get a pension a bit lower than the next higher one.

    Rework your tables until cows come or until basic CS is allowed to function.

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  12. @Unknown and @Old Crow: No one is speaking or writing of the pensions that will come through with OROP.

    That table needs to be read in the context of the blog-post and with reference to the footnotes on the table, a thing you have probably omitted to do, jumping straight to the table itself.

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  13. There are certain home truths which can't be simply ignored, whether one likes it or not.
    Definition of OROP:
    Same rank + same length of service=same pension!
    This is not what the Honourable Defence Minister of India has committed in writing-Minutes of meeting 27 Feb refers. It is not hallucination! How it is going to be implemented is not my head ache! However I shall show some logical deduction with examples.
    As on Date: 01 Jan 2006
    Lt Col A 13 years service
    Old basic: 13500
    6CPC pay fixed:36530+8000+6000
    Lt Col B 20 years service
    Old basic:16300
    Pay fixed:42120+8000+6000=56120
    Pension of Lt Col B at 20 years qualifying service=28060
    This is the basic pension, which will remain constant. Only DA will change.
    Now consider the case of Lt Col B
    His basic pay will increase by 3% of the sum of Basic pay + Grade pay every year.
    At 20 years (year 2013) his basic pay would be 57260! Surprised?
    Pension of Lt Col B at 20 years (YEAR 2013) service=(49260+8000+6000)/2=31630
    Lt Col A and Lt Col B, retiring post 2006 with 20 years of service are getting different pensions. This anomaly is due the fact that basic pay of Lt Col A was fixed as per 6 CPC formula, applying 3% increment on basic pay only and further reduction of basic pay due to bunching! This is as per the SAI 2/S 2008. This is certainly ultra vires of Art 14 of the constitution. Both A and B belong to the same Class 100%!!!
    There is a case for increasing the pension of Lt Col A to bring it to the level of Lt Col B.
    One of the solutions for achieving this is given in my previous post.

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  14. @Sainathan "...equivalent to NFFU upgradation on the civil side...";
    😊
    That is what everyone has been saying the past few years.

    Once Maj Navdeep described the civilians' NFFU as OROP obtained by the backdoor.

    But we should concentrate on the ways parity of pensions would be delivered under OROP and not how it should be more like the civilians' NFFU.

    "..Minutes of meeting 27 Feb refers
    ..."

    Do let us have a link to those to see what was really recorded.

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  15. One basic question - would pension of retiree before Jan 2006 be fixed from 1st April 2014 at same amount as pension of retiree on 31st Jan 2006 in same rank and same service?

    ReplyDelete
  16. There are some errors in my last comment. I have therefore reposted the same with corrections:

    As on Date: 01 Jan 2006
    Lt Col A 13 years service
    Old basic: 13500
    6CPC pay fixed:36530+8000+6000
    Lt Col B 20 years service
    Old basic:16300
    Pay fixed:42120+8000+6000=56120
    Pension of Lt Col B at 20 years qualifying service=28060
    This is the basic pension, which will remain constant. Only DA will change.
    Now consider the case of Lt Col A
    His basic pay will increase by 3% of the sum of Basic pay + Grade pay every year.
    At 20 years (year 2013) his basic pay would be 49260! Surprised?
    Pension of Lt Col A retiring in 2013=(49260+8000+6000)/2=31630
    Lt Col A and Lt Col B, retiring post 2006 with 20 years of service are getting different pensions. This anomaly is due the fact that basic pay of Lt Col B was fixed as per 6 CPC formula, applying 3% increment on basic pay only and further reduction of basic pay due to bunching! Whereas Lt Col A drew annual increments @ 3% of Basic + Gd Pay from 2006 to 2013.This is as per the SAI 2/S 2008. Both A and B belong to the same Class 100%!!!
    There is a case for increasing the pension of Lt Col B to bring it to the level of Lt Col A.
    This is OROP!
    This is just one example.

    The job of PCDA(P) can not be just to issue once in a life time PPO and relax. There role should be more dynamic. It is there job to automatically issue corrigendum to PPOs as and when the pension fixed for a junior is more than a senior with the same rank and service, but who retired earlier. In the 21st century, it is a very easy job, executed by computers and softwares.
    When the govt. can transfer cash subsidies for cooking gas and subsidised rice to millions of its citizens across the length and breadth of the country, it is a joke if they cannot handle OROP.

    The link to the minute sheet can be accessed from:
    http://rajeev.in/rajeev_writes/OROP/Response_from_Defence_Minister_Mar052014.pdf

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  17. @Sainathan: "...Surprised?...";

    Well, that is the whole point of the blog post if you would only re-read the third paragraph.

    You should also focus on a Lt Col who retired before 01 Jan 2006. To which pension would the pre VI CPC Lt Col's pension be equated?

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  18. @ Sunil
    Once the principal of One Rank One Pension is accepted, the distinction between pre and post 2006 will vanish. As clarified by the RM OROP means:
    1. Uniform pension for the same rank for the same length of service.
    2. “Irrespective of the date of retirement” means, date of retirement is irrelevant”
    3. “Any enhancement in the rates of pension to be automatically passed on to the past pensioners” implies that the system of pension administration is to be dynamic to changing situations.
    4. It also talks about the “bridging the gap between the rate 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.” The term “current pensioners” does not necessarily mean post 2006 pensioners; in a broader sense, it means a pensioner who has recently retired from service. The implication is that the system should be geared up to automatically pass on the current rate of pension to all the old pensioners with the same two common characteristics: Rank & length of service.
    The tasks for the PCDA (P) are three fold:
    (a) PCDA has a simple formula for calculating the pension, which essentially depends on (i) Rank,
    (ii) Last pay drawn and (iii) length of service. Here, the only variable is the “last pay drawn.” Irrespective of the “accidents” of service, which may produce variations in the “last pay drawn”, the pension of the current retiree of a given rank and length of service should be a standard of reference for revision of pension of all past retirees. (Here, one important comparison I would like to make with the NFFU on the civil side. The only consideration for grant of NFFU is length of service; once the pay is automatically upgraded following NFFU, pension is also upgraded. I don’t understand why the Fauji is doing the hair splitting. I think the real adversary of the Fauji is not the Babu; it is the Fauji himself, who gets immense satisfaction if he gets a better deal than another fauji even if he gets far less than an equivalent civ. Remember PB4 for Lt Cols and where the opposition was coming from?)
    (b) Update the database of all the pensioners identifying the rank and length of service. As is the practice, fractions of any length of service less than three months is ignored; above three months but less than six months is counted as six months; above six months but less than nine months is taken as six months and above nine months is taken as one year.
    (c) Develop the software to generate revised electronic pension pay orders once in a quarter or once in six months and dispatch to the PDAs electronically. Too difficult and beyond the scope of the babus of PCDA(P)? No problem! Outsource it; there is no dearth of talent in the country. Haven’t we outsourced the issue of passport to TCS?
    In summary, implementation of OROP is not all that complicated. I see it as a job involving data updating deployment of necessary software. It looks complicated basically due to the attitude of the Fauji himself- of one-upmanship, added to the negative approach of lower level bureaucracy.

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  19. @Sainathan: "@Sunil".

    No one by that ID has joined the discussion yet. Was it someone who had made a comment on some other blog?

    "distinction between pre and post 2006 will vanish";

    Well, that is what we have been discussing all along. Everyone knows the distinction needs to go for OROP to be implemented. The question is how will it be implemented.

    Whether they base past pensions on the current "standard" or fix a pension for past retirees as per equivalent pension actually drawn by a retiree on some relevant cut off date like 31 Jan 2006 / 30 Apr 2014 or base the fixed pension according to the post VI CPC tables doing the rounds, it all is part of the current discussion.

    "the real adversary of the Fauji is not the Babu; it is the Fauji himself";

    In many cases, your observation could fit the description of being "bang on target". Even now when NFFU and OROP are discussed, many begin to complain about why the differential of pay/pension/privilege between a lower and a higher rank is being reduced.

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  20. @ Sunlit
    I am sorry for writing Sunil for Sunlit. It was inadvertant mistake on my part!

    I am glad that you have agreed to many of my observations. But you know, logic does not always work when issues of services are dealt by the present est. I would not be surprised if the babus once again go out of their way to come out with interpretations to make sure faujis get next to nothing.

    I wonder why a govt. during its dying hours suddenly becomes aware of the sacrifices of the faujis, if it is not for the sake of garnering votes. If they were really serious, they could have done this job during the ten years they were in power and not durin the last ten weeks of their existence. Already Chidambaram and Anthony are History and they are in no position to implement OROP now, even if they want to.

    I only hope Faujis have not been taken for a ride once again! But that is no reason to stop speculating-and indulging in the fun game- how much benefit OROP is going to give?

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