Wednesday, March 16, 2016

Coming To Grips With OROP Data

Now that the anxiety ridden issue of grant of OROP to past pre-mature retirees seems well out of the way and credit of  the first installment of OROP arrears, to pensioners' accounts, is in progress, there is a need to take a step back and try to make a sense out of the manner in which OROP pensions have been fixed.

One may need to go back to the graphs and charts of one or two of my previous posts (links at the end of this blog-post). But to simplify the matter for a clearer understanding of, if nothing else, the need to understand, we can consider the effect of OROP on just two ranks of pre 01 Jan 2006 retirees, Lt Col and Col. Both select and time-scale ranks can be considered. (The zoom and pop-out facilitations on the embedded graph could be used if required)



We see from the above graphs, based on data taken from circulars 500 and 555, that there is a steady decrease in the percentage enhancement due to OROP with an increase in qualifying service.

That should provide some reassurance to those veterans who had taken pre-mature retirement before 01 Jan 2006. They get more of a percentage pension boost due to OROP than those who super-annuated after serving for  longer periods.

At the same time, it could be a source of puzzlement to pre 01 Jan 2006 veterans who did not take pre-mature retirement. Ought they not to have received as much of a percentage increase on account of OROP, if not more, than those who opted for pre-mature retirement? A question could arise if the declining trend in percentage pension increase is almost tantamount to imposition of a penalty on veterans for not having taken pre-mature retirement!

It is possible, of course, that pensions of post 01 Jan 2006 pre-mature retirees not being subjected to proportionate reduction of pensions, unlike pensions of their pre Jan 2006 predecessors, the Calendar year pensions in 2013 were, as a result, considerably higher than those of pre Jan 2006 retirees in the same rank and with the same service. This could explain the greater percentage increase of OROP pensions of pre 01 Jan 2006 retirees at a QS of just 20 years.

In some cases, it is not just the percentage, the actual quantum of OROP arrears is higher for retirees who took PMR at a service of 22 to 23 years as compared to retirees in the same rank with a QS of 28 or 29 years.This is easily discernible from the following graph that shows actual amounts and not just percentage increase of OROP pensions plotted against qualifying service (The zoom and pop-out facilitations on the embedded graph could be used if required):


But charts and tables can't tell the whole story. As has been mentioned elsewhere, where did OROP figures for Maj retirees at a service of 20 years come from? Or for a Lt Col with service more than 26 years? Did anyone in those ranks actually retire with service of 20 years and 26 years, respectively, in 2013? If not, what was the basis of fixing OROP pensions for Maj retirees with service more than 20 years and Lt Col retirees with service more than 26 years? Is it possible the graphs are skewed because of faulty logic having been applied in fixing OROP pensions based on some flawed extrapolations?

If sense is to be made of the slippery slope the above graphs appear to depict, perhaps obtaining actual data and methodology that formed the basis of OROP fixation, on the lines suggested previously, could be seriously considered.

Previous blog posts on the matter  can be accessed through this link

7 comments:

  1. Will it be possible to get the methodology followed by the MOD in formulating the pension scales as given in the PCDA (P) Circular 555 through RTI? A thorough study will give their mindset.

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  2. As you are comparing the C555 vs C500 scales of these Colonels, it is obvious that the pre mature cases didn't get better deal in C500 and are corrected now. As the differences are low between C555 and C500 for those beyond 24-25 year service, specially beyond 27 year service, it shows that they were better placed in C500 itself. Your work is really commendable sir.

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    1. @Manohar AM : "..it is obvious.."

      It is not all that cut and dried.

      One of the reasons as mentioned in the blog post, and also commented upon by you, could be that pre VI CPC PMR cases gained more after OROP due to the removal by VI CPC of differentials caused by proportionate reduction in pensions after 01 Jan 2006.

      The concern should be whether the non-PMR pre VI CPC cases are getting a raw deal this time. What if their OROP pensions need to be at higher levels than they are in the tables?

      As mentioned previously, there is no clarity as to why the OROP graph is flat. There is convergence, in that earlier graph, for OROP and pay-band based pensions only for QS range that shows the highest percentage increase in graphs shown here.

      This needs to be viewed in light of unanswered questions, as in the case of Lt Col, where was data obtained for minimum/maximum pensions for 2013 retirees with QS > 26 years.

      Till the data and methodology for making the OROP table is made transparent, there can't be full clarity.

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    2. True, your query about the notional data of 2013 retirees applies to 20 year service Major too. Most probable they must have worked backwards from the data available to the seniors in those ranks who retired in 2013. This is similar to the screwdriver technology in 'Make in India' programme. Whole of the exercise seems to be purely cooked up figures.

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    3. @Manohar AM : "..seniors in those ranks who retired in 2013.."

      How could any seniors in rank of Major have retired with more than 20 years of service in 2013?

      Whether the figures are erroneous or not can only be debated on if steps are taken by those affected to clear up the grey areas.

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  3. In the PCDA (P) Circular 555, there are no Lieutenants, Captains and Majors of MNS retired and their pension due is not given at all for all QS levels. Where as we see pension for all officer ranks and QS are given. As on date Majors and Lt Col and the higher up don't retire from 0.5 to 13 years service, but their pensions are arrived AY some notional figure. Is there any justification for this?

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    Replies
    1. @Manohar AM : For clarifying these mysteries, we need to obtain the basis of fixation of our own OROP pensions on the lines I had suggested in my previous reply.

      The truth will set us free as they say, and "the truth" here is nothing more than detailed information.

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