Thursday, February 20, 2014

Further Iterations On The OROP Pension Estimates : Lt Col In PB IV

On the basis of a comment on the previous blog-post, it became necessary to consider the first set of corrections to the OROP estimates.

To be absolutely forthright, due to a lack of concrete data, one has to base estimates on premises. In the present case there is the very important backdrop of the "Minimum Of Pay In Pay Band" vs "Minimum Of Pay Band" issue. The matter was only partially resolved based on the recommendations of Committee of Secretaries and is even now the subject of litigation for a retrospective implementation with effect from 01 January 2006.

But as the pension for pre VI CPC Lt Col retirees in PB IV was refixed at Rs 26265/- in place of 25700/-, one can make a quick reverse calculation and come to the conclusion that the minimum pay for a Lt Col in PB IV post VI CPC is Rs. 38530/-. From that conclusion, sound or otherwise, one can proceed to calculate increments, round these off to the next higher multiple of 10 and arrive at a fresh set of figures for basic pension applicable to a pre VI CPC Lt Col retiree.

A table, after what one could call the application of "Minimum Of Pay In Pay Band" correction, can be prepared. {EDIT: Care must be taken to keep in view that the same basic pension would not apply to everyone with the same no. of years of service. Basic Pay in pay band would vary as per fixation with effect from 01 January 2006.} (For a larger size view, please click on the thumbnail below):


Whatever the catalysts or driving forces be in the selection, by the Government, of the present point in time for announcing the acceptance of principle of OROP, for retirees of armed forces, it remains to be seen how this would translate into reality at the ground level.

Skepticism has been voiced, in the media and online, as to whether there would be shortfalls in the delivery as against the anticipated outcome. This leads us right back to the question at the heart of the matter. What is the "anticipated outcome"? Has any clarity emerged in the stated positions of the advocates of OROP since the times I had attempted to outline what OROP "could" imply in this blog post?

As far as statements go, the Hon'ble Finance Minister spoke of bridging gaps in pensions. Spokespersons of the political party in power have defined it as equal pension for the same length of service for the same rank regardless of the point of time when an ex-serviceman retired. This, barring the understandable doubts arising from past experiences, could be construed as full pension parity based on the rank at retirement and length of service and not modified parity.

Such an OROP would be expected to fully bridge the gap, with effect from 01 April 2014, between the pension of a pre VI CPC retiree in rank "x" with reckonable service "y" and the pension of a post VI CPC retiree also in rank "x" and length of service "y". Presently, the pre VI CPC retiree gets pension applicable to the length of service corresponding to the minimum of the pay band of rank "x"  post VI CPC.

Now, even if such a happy state came to be realized, it would not completely address the old issues that have been raised off and on. It may help to create a brief list here that could be rationalized, enlarged and/or modified depending on feedback received. The areas that might require fine-tuning are:

*What is the concept of "One Rank"? I've stated in different words elsewhere and have read it on others' blog posts and comments, that "Rank" is a variable, not a constant. Yesterday's rank "x", in the above example, may not be the same rank "x" today in terms of the time-frame required to attain it automatically on the basis of length of service. The clearest recent example is the pre and post VI cpc ranks of Lt Col and Col(TS), respectively, applicable at retirement for pension calculation after an identical service of 26 years, in the same cadre and with the same commission. My old blog post could apply to discrepancies in pensions of two retirees even with OROP.

*Does OROP compensate for the truncation of careers in armed forces as compared to civilian employees? Even with OROP, would the pension, between the time of retirement of a armed forces retiree and the time an equivalent civilian retires, equal the pay and allowances of the latter in the same period? Equally importantly, would the OROP pension of the same armed forces retiree equal the pension of the "equivalent" civilian employee at the time the latter retires several years after the armed forces retiree?

*Does OROP compromise the case for NFFU for the armed forces on the same lines as given to civilians?

Clearly, there would be no simple answers to these questions as well as to others that might arise. But to address the immediate ambiguity as to whether OROP would be full, partial, modified, semi-modified or whatever, we could at least share in clear terms what "full OROP" ought to be.

Let us take the case of a specific rank. For pull parity of pension for a Lt Col who retired before 01 Jan 2006, his pension should equal the pension as per the pay band applicable to a Lt Col serving and retiring beyond 01 Jan 2006 as follows. Please note these figures are subject to verification and any corrections or suggestions for modifications would be welcome.

Guidance provided towards ascertaining pay-band details in the Aerial View Blog is gratefully acknowledged in the making of this table. (For a larger view, please click on the thumbnail below)

{Edit} Please view an update here.

Monday, February 17, 2014


{Edit: A brief chronology of the matter has been added at the end of the blog post}

Issues do not exist in water-tight compartments, nor can principles that apply in one case be automatically extended by rule of thumb to another.

But recent blog-posts connected with the issue of OROP opened up a train of thought based on related judgements and judicial pronouncements. But then, trains of thought can be runaway trains, going downhill at break-neck speed , inviting a derailment at every curve. There is nothing like the blogosphere for obtaining requisite braking in the shape of comments and counter-views to keep the train on track.

The case of Wg Cdr VS Tomar vs UOI led to this train of thought getting onto a branch line. Para 25 of judgement of Hon'ble Supreme Court in UOI Vs SR Dhingra and Ors (2008) 2 SCC 209, as quoted in AFT judgement on OA 106/2009, would seem to bar an employer from fixing a retrospective date of implementation of a benefit arbitrarily. Now, though the AFT judgement relates to parity of the pro-rata clause related to pensionary benefits for pre and post VI CPC retirees, it could have wider ramifications.

A lay person's appreciation could be the same principle, as enunciated in the judgement, applies to the implementation of phase I recommendations of AV Singh Committee. It needs to be emphasized here, the application would seem to extend to the entire implementation of phase-I recommendations of AV Singh Committee and not in respect of just the pensionary aspects.

Let us consider this:

*The implementation of phase-I recommendations of AV Singh Committee was retrospective.

*The Govt fixed the retrospective date as 16 Dec 2004.

*This retrospective date divided a homogeneous group into two not only for the benefit of pensions but also in respect of benefits of faster promotions AND consequently higher pay and allowances of those who were in service.

This needs to be considered independently of the issue of parity of pensions of pre AVS-I Lt Col/post AVS-I Col(TS) which I had sought to highlight earlier.( <—- Click link to view )

A simple example would be a Captain who had 6 years of service on 01 January 2002. He picked up the promotion to rank of Major wef 16 Dec 2004 when the AVS-I recommendations were implemented in 2005 retrospectively. Whereas another Officer who completed the same service of 6 years on 30 Dec 2004, immediately received the benefit of the promotion, including the higher pay and allowances, also retrospectively. The former would appear to have a case for arrears of a kind different from the Rank Pay arrears that we're all so focused on.

Now just consider the arrears that could arise for all who continued in service, forgetting for the time being the pensionary issue related to Lt Col/Col(TS). 

Depending on a legally correct retrospective date of implementation, Officers, both serving and retired, could be entitled to arrears of pay and allowances on account of promotions and increments extending back several years from Dec 2004.

This matter needs to be examined in relation to my previous blog post wherein it had been suggested ( <—— Click link to view ) there is a strong possibility
of a homogeneous group having been sub-divided in two, though the word "set" had been used at that time in place of "homogeneous group". The homogeneous group would have been the one that required to receive the benefits the Govt. itself had decided were required to be given when it formed the AV Singh Committee.

So what should have been the legally correct retrospective date for implementing phase-I recommendations of AV Singh Committee? It would have to be a date that defined a homogeneous group for the purpose of receiving benefits that the Govt intended to bestow.

*It could have been 01 Jan 96 for Officers in service as on that date as it was V CPC which first postulated the requirement of ACP which the AVS-I recommendations were an extension of, even though it had been represented at an AFT that there was no nexus.

*It could have been the date on which the terms of reference were given to the Committee.

*It could have been the date the Committee finalised it's recommendations.

*It could have been the date on which the Govt accepted "in-principle" the recommendations of the Committee.

But the concepts of arbitrariness and sub-division of a homogeneous group seem to apply in retrospective selection of 16 Dec 2004 as the date of implementation for passing on benefits of phase-I recommendations of AV Singh Committee.

Whether or not there are sufficient grounds for individuals and/or groups to contemplate further investigative exploration, followed by attempts at a resolution of the matter, would depend on guided collective reasoning being applied to the subject.

{Edit 1} : This issue re-surfaces every now and then, as it did about four months ago.(<——- Click link to view )
{Edit 2} : In order to fully comprehend the manner in which the sub-division of a homogeneous group occurred by selection of the implementation date, here is a brief time line, each date being a point in time where a case exists for a sub-division having taken place, resulting in discrimination:

*Jul 2001 : AV Singh Committee ordered.
*Sometime in July 2002 : Committee recommendations submitted to Govt.
*Sometime in 2003: Govt announced acceptance "in principle" of recommendations.
*December 2004: Govt. Announced acceptance of recommendations.
*March 2015: Implementation notified retrospectively from 16 Dec 2004.

A news item from the era gives a brief outline of the chronology: