Wednesday, September 14, 2016

Pension Fixation Based On Notional Progression (Cont'd) : OROP

To be sure, this is merely a re-hash of issues covered on this blog, on other web-sites and blogs, in chat forums, in group e_mails or bars at clubs and institutes.

Not that drawing arrow-marks for marking out a logical pension progression is expected to result in an overnight re-framing of pension awards. But, on the lines of progression path for 7 CPC pension fixation in the previous post, here is the same concept applied to one of the tables (the first one) issued for implementing OROP.




{Edit}: A little clarification appears in order. The notional progression as suggested in the table needs to be governed by some constraints. 

Notional pay, hence pension, of an older retiree in a certain rank must progress to the level suggested in the table provided currently serving Officers in the older retirees' cadre and with the same type of commission progress on basis of time, i.e. length of service alone, to the higher level as shown.

The progression would, by and large, be applicable up to the rank of Major in most types of commission. But progression to the notional level of current level of Lt Col at service of 13 years may exclude those types of commissions with which Officers do not currently progress automatically to rank of Lt Col at a service of 13 years.

Similarly, notional progression to pay, hence pension, of Col(TS) at a QS of 26 years, as suggested in the table, would be justified for those types of commission with which Officers currently get the rank of Col(TS) after completing a service of 26 years.

Sunday, September 11, 2016

Some Notions Of Progression For Pension Fixation

Some time ago, I had come across a reference to "notional fixation" in pay-bands applicable to Major for determining the OROP pensions of older pensioners in Major rank, considering no one retires in Major rank anymore due to speedier time-bound promotions. Similar concerns apply in the case of fixation of 7 CPC pensions.

The concept of "notional fixation" was excellent but the rider about restricting the "progression" to a Major's pay-band didn't appeal so much. I had given my opinion, for what it was worth, in a previous blog-post.

To repeat myself, when it comes to time-bound ranks, pension parity needs to be based firstly on the nature of enrolment/commission and the cadre, then on "time" i.e. qualifying service and only after that on the "rank" which is not a constant measure of service rendered in the case of time-bound ranks. Attributes of time bound ranks have changed over the years. In their case, the true measure of service rendered is, well, the service rendered, in number of years. Here's a link to this concept. Again, it applies to 7 CPC as much as OROP.

While working on the co-relationship of qualifying service with stage and level numbers of the 7 CPC Matrix in the previous blog post, it became apparent that the "notional progression" can't be a uni-directional one, leading vertically downwards in the same pay-band.

Such a "notion" budgets for imaginary increments but not the enhancements in grade pay that automatically come with time in reality. So, for a correct "notional progression", the progression has to be downwards and sideways based on what actually happens to those currently serving.

The following example indicates the manner of progression of pay for time-bound ranks which provides a rational basis for fixing 7 CPC pensions of older pensioners.

A critical and basic requirement for the validity of such a downward-sideways progression is, if the older pensioner had been in service after 16 Dec 2004, would he or would he not have been eligible, based on the QS in the extreme left column, for time-based progression to the next higher level shown in the progression path in the table. If the answer to that is in the affirmative, then fixing his pension in the lower pay-band would be a straight-forward case of discrimination.

Even though implementation of 7 CPC pay fixation is reportedly being held in abeyance, the principles of pension parity, as illustrated in the following table, would still be valid regardless of any enhancements in pay levels that might come about):


{Edit}: A little clarification appears in order. The notional progression as suggested in the table needs to be governed by some constraints. 


Notional pay, hence pension, of an older retiree in a certain rank must progress to the level suggested in the table provided currently serving Officers in the older retirees' cadre and with the same type of commission progress on basis of time, i.e. length of service alone, to the higher level as shown.

The progression would, by and large, be applicable up to the rank of Major in most types of commission. But progression to the notional level of current level of Lt Col at service of 13 years may exclude those types of commissions with which Officers do not currently progress automatically to rank of Lt Col at a service of 13 years.

Similarly, notional progression to pay, hence pension, of Col(TS) at a QS of 26 years, as suggested in the table, would be justified for those types of commission with which Officers currently get the rank of Col(TS) after completing a service of 26 years.

Saturday, September 10, 2016

A Straight Forward Set Of Pension Parity "Equations" For 7 CPC : Maj, Lt Col, Col(TS) Pensions {Pre Dec 2004 Retirees}

{Matrix Figures Updated}
At the present moment, there is no sign of any movement on implementation of 7 CPC recommendations regarding pensions of armed forces veterans.  {Edit: The 7 CPC recommendations were subsequently implemented using a inter-CPC formula based "notional pay" method instead of using increments, which too did not attempt to normalise fixation of "notional pay" based on qualifying service.}

If and when some orders are issued, these are likely to be only for fixing pensions by multiplying either VI CPC or OROP pensions by 2.57. Multiplying VI CPC pensions by 2.57 is likely to yield January 2016 pensions nearly equal to or less than OROP combined with the January 2016 DR.

In a scenario like that, with OROP anomalies still not sorted out, it may be hoping for the impossible to expect rationalization of the good old 20 years Major and 26 Years Lt Col pension anomalies.

Enough has been posted about that. Here is a brief summing up, as a kind of "impossible to realize wish-list", in the form of two "equations":

PL11;i(8--->20) = PL12A;i(1--->13) for older ( pre Dec 2004) Maj pensioners.

PL11;i(21--->28) PL12A;i(14--->20) = PL13;i(12--->18) for older ( pre Dec 2004) Maj and Lt Col pensioners with PCs.


P ---> Pension corresponding to a specific increment-stage cum matrix-level combination.
L ---> 7 CPC Matrix Level.
i ---->7 CPC Matrix index number increment stage for level.

As an example, the first equation states pension calculated for level 11 increment stage 9 should equal the one for Level 12A index increment stage 2, but won't.

Pensions corresponding to appropriate cells can be calculated based on the pay in the matrix as follows and then checked for the requisite but eternally elusive parity as per equations above (even though implementation of 7 CPC pay fixation is reportedly being held in abeyance, the of principles of pension parity, as illustrated in the following tables, would still be valid regardless of any enhancements in pay levels that might come about):

{Update: With recent, May 2017, amendments to IOR (multiplication factors), the figures displayed in different “levels” may changed and will be are now updated in a subsequent this blog-post. as and when amended Matrix is made available. The suggested manner of parities for pre 2016 retirees in time bound ranks still remains relevant}


Pay Band à
15600-39100
37400-67000
Grade Pay -à
6600
8000
8800
Level –>
11
12A
13
1
69400
121200
130600
2
71500
124800
134500
3
73600
128500
138500
4
75800
132400
142700
5
78100
136400
147000
6
80400
140500
151400
7
82800
144700
155900
8
85300
149000
160600
9
87900
153500
165400
10
90500
158100
170400
11
93200
162800
175500
12
96000
167700
180800
13
98900
172700
186200
14
101900
177900
191800
15
105000
183200
197600
16
108200
188700
203500
17
111400
194400
209600
18
114700
200200
215900
19
118100
206200
20
121600
212400
125200
129000
132900
136900



Even though such charts have been prepared and shared in dozens of other formats, based on the above considerations a rough indicator of the manner in which 7 CPC pensions need to be calculated is as follows:

Pay Band
15600-39100
37400-67000
Grade Pay
6600
8000
8700
Entry Pay (EP)
25980
45400
48900
Level
11
12A
13
Qualifying Service
Increment
Stage
Increment StageIncrement
Stage
6
1
69400





7
2
71500
8
3
73600
9
4
75800
10
5
78100
11
6
80400
12
7
82800
13
8
85300 (Pay of level 12A should apply for calculating 7 CPC Pensions)
1
121200 ✓  
14
9
87900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
2
124800 ✓ 
15
10
90500 (Pay of level 12A should apply for calculating 7 CPC Pensions)
3
128500 ✓ 
1
130600
16
11
93200 (Pay of level 12A should apply for calculating 7 CPC Pensions)
4
132400 ✓ 
2
134500
17
12
96000 (Pay of level 12A should apply for calculating 7 CPC Pensions)
5
136400 ✓ 
3
138500
18
13
98900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
6
140500 ✓ 
4
142700
19
14
101900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
7
144700 ✓ 
5
147000
20
15
105000 (Pay of level 12A should apply for calculating 7 CPC Pensions)
8
149000 ✓ 
6
151400
21
16
108200 (Pay of level 12A should apply for calculating 7 CPC Pensions)
9
153500 ✓ 
7
155900
22
17
111400 (Pay of level 12A should apply for calculating 7 CPC Pensions)
10
158100 ✓ 
8
160600
23
18
114700 (Pay of level 12A should apply for calculating 7 CPC Pensions)
11
162800 ✓ 
9
165400
24
19
118100 (Pay of level 12A should apply for calculating 7 CPC Pensions)
12
167700 ✓ 
10
170400
25
20
121600 (Pay of level 12A should apply for calculating 7 CPC Pensions)
13
172700 ✓ 
11
175500
26
21
125200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
14
177900(Pay of level 13 should apply for calculating 7 CPC Pensions)
12
180800 ✓ 
27
22
129000 (Pay of level 13 should apply for calculating 7 CPC Pensions)
15
183200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
13
186200 ✓ 
28
23
132900 (Pay of level 13 should apply for calculating 7 CPC Pensions)
16
188700 (Pay of level 13 should apply for calculating 7 CPC Pensions)
14
191800 ✓ 
29
24
136900 (Pay of level 13 should apply for calculating 7 CPC Pensions)
17
194400 (Pay of level 13 should apply for calculating 7 CPC Pensions)
15
197600 ✓ 
30

141000(Pay of level 13 should apply for calculating 7 CPC Pensions)
18
200200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
16
203500 ✓ 
31

145200(Pay of level 13 should apply for calculating 7 CPC Pensions)
19
206200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
17
209600✓ 
32

149600(Pay of level 13 should apply for calculating 7 CPC Pensions)
20
212400(Pay of level 13 should apply for calculating 7 CPC Pensions)
18
215900 ✓ 
33



19