Current Speculations On The Recommendations Of Government Panel On Armed Forces Pay Anomalies

 

With recent news trickling in on the latest Government view-point on OROP and NFFU, a list of probable scenarios can be drawn up, viz.,

*The proposal for OROP would not be accepted.

*NFFU would be introduced for serving Officers.

*Modified Parity would be the basis of enhancing pensions of past  (preVI CPC) retirees.

*New pay bands would be created rank wise for fixing pensions.

This leads to the very basic, fundamental and principle-based consideration that lies at the core of the OROP matter. In other words, litmus-test questions, based on two primary considerations of truncated careers and intra-veteran-parity, can be posed for establishing the validity of such a readjustment of pensions, as follows:

*Would the truncation of careers of armed forces personnel vis-a-vis those of equivalent civilian employees be compensated for in terms of pensionary benefits? A very basic, rule of the thumb yardstick for comparison would be whether the pension of a person in the armed forces retiring today at age 50 equal, ten years later, the pension of an equivalent civilian employee, who had joined at the same time as the armed forces retiree, the civilian retiring 10 years later at age 60 years?

*Would the pensionary benefits of a person retiring in the armed forces today at age 50 years have appropriate compensation for the shortfall in the pension he’d draw over the next 10 years as compared to the pay and allowances the equivalent civilian employee would be drawing over the same period? This compensation would, of course, not be required if the person from the armed forces was absorbed in a Government civilian post for the said period.

*Though one rank one pension may not have been agreed to, for some manner of parity, or modified parity, within the set of retired personnel of the armed forces, would the re-fixation of the pension of pre VI CPC retirees take place in:

                **Pay-band of the rank in which the veteran retired?

**Pay-band of the rank the retiree would have automatically attained under present rules merely on the basis of the length of his service? Example: A pre VI CPC retiree in rank of Major (PC) with more than 20 years of service would have been automatically in the Pay-band of Lt Col now.

**Pay-band of the rank the retiree would have been placed in based on the length of his service AND after application of NFFU? Example: A pre VI CPC AND pre AVS-I retiree in the rank of Lt Col (TS) with 30 years of service would have been in the pay-band of Col (TS) without NFFU and Brig with NFFU.

Another yardstick for checking the rational basis of the rejigged pensions would be the enhancement factor for the pension of an Honorary Officer or, say, a Branch Commissioned Officer of IAF, who suffer negligible truncation of career, as compared to the enhancement factor applied to the pension of an Officer with a Permanent Commission who might have retired at age 52 in the rank of Lt Col or a non-commissioned Officer retiring at an even younger age. This is not to say a Hony Officer or an IAF BC Officer should not have an enhancement in pensions, but the factor for truncation needs to be proportionally higher for those retiring at earlier ages.

Inputs for arriving at basic assumptions for the foregoing were provided by the contents and comments on this ---> valuable blog post

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Basis For Fixation Of Pension : Length Of Service Vis-A-Vis Rank

Post VI CPC, most of the adjustments, corrections and rationalisations that the authorities found the need to incorporate in the original awards have already been put into place.

However, the matter of parity of pensions on the basis of length of service rendered continues to remain unaddressed.

At a few times in the past decades, the minimum service required to attain time-bound elevation to the next higher, non-select, rank has seen a quantitative reduction, but the defence services personnel who retired prior to these reductions, continue to be considered for pensions on the basis of the ranks they retired in and not on the basis of the higher ranks they would have automatically been given, had they continued to serve, based purely on the length of the service they had rendered.

This discriminates against older retirees in spite of the equal, or even longer, service they might have put in relative to subsequent retirees. In a scenario of variable qualifying service for time-bound promotions, the length of service rendered assumes significance.

This applies to most cadres across the services at the levels of Officers, JCOs and all other ranks.

A specific example can be cited in the case of Officers who were affected in this manner by the implementation of Phase I recommendations of AV Singh Committee which were implemented with effect from 16 December 2004. A Lt Col/Lt Col(TS) retiree, who retired before 16 December 2004, with more than 26 years of service, would have automatically been eligible for being given the rank of Col(TS) if he had continued to serve beyond 16 Dec 2004. But his pension, inspite of the length of service rendered, is that of Lt Col.

In this case, the most just resolution would, of course, have to be a retrospective implementation of Phase-I of AV Singh Committee recommendations. But that may involve dealing over prolonged periods of time with intractable issues. Besides, it is hard to find a justification for retrospective implementation, of AV Singh Phase I recommendations, earlier than the date of convening the committee.

But, there's an immediate stop-gap resolution feasible at least for pensionary benefits. The pre AV Singh Phase I retirees in the ranks of Lt Col/Lt Col(TS), with the requisite length of service that would have made them automatically eligible for the rank of Col(TS), presently 26 years, need to be placed alongside Col(TS) in the column listing pensions post VI CPC.

A similar step is required for the post pre 16 December 2004 retirees in the rank of Major with the same proviso, viz., of completing the requisite length of service that would have made them eligible for the next post AVS Phase-I rank of Lt Col. {Edit: As an afterthought, it's difficult to not agree with the viewpoint, emerging elsewhere, as to why a pre 16 Dec 2004 Maj retiree with more than 26 years of service would not be eligible for the same pension as a post 16 Dec 2004 Col(TS) who would have retired before implementation of VI CPC}

The primary rationale here is the length of service is just as valid a yardstick for parity of pensions as are the ranks held at retirement, provided due consideration is applied to the fact that the next higher ranks attained through selection, as opposed to those based purely on length of service rendered, would certainly justify higher pensions.

This is an extension of part of the logic put forth in this blog post.

Beyond The OROP "Slogan"

"One Rank One Pension", or OROP in short, is not just a single issue. It is a concept and represents a whole spectrum of underlying concerns, ideas and principles related to fairness, equity and justice. The chief danger in the term OROP being tossed about in the media, as well as in sundry blogs and forums, is that the finer details and nuances of the concept are likely to become victims of hype and the low quality of discourse and discussion overseen by the not exactly keen intellects that are usually the first to get engaged in great numbers with hype of any nature.

Presently, a common understanding is evolving to a loosely held notion that OROP would mean that an armed forces retiree would get the same pension applicable to his rank regardless of when he or she retired. This brief idea now seems to represent to vast numbers amongst those affected the totality of "OROP" which has in a way been reduced to a slogan without any common understanding as to what OROP should precisely mean.

Now, let us not dispute the usefulness of slogans, per se. In order to convey a range of issues to those affected in an abbreviated form, slogans are particularly useful as devices for capturing the 'popular imagination'. A slogan can also be the platform for engaging in negotiations and discussions on the complete range of issues covered by the single slogan. The caution that needs to be exercised is the slogan be discussed and amplified to explain its full meaning so that people do not confuse the whole depth of the matter with the wording or text of the slogan.

In that sense, OROP meaning equal pension for all retirees in the same rank would fall well short of a state of equity for a veteran of the armed forces vis-a-vis a civilian counterpart. For even a reasonable, not perfect, mind you, resolution of the imbalances tilted against the veteran, OROP needs to take into account the following principle-based considerations:

*There is a need to redress the imbalance in earnings, to the veteran's detriment, on account of his truncated career vis-a-vis a civilian counterpart. The present day veteran retirees' pensions therefore must be fixed at a higher level than those of 'equivalent' civilian counterparts as the latter serve for longer periods drawing incrementally enhancing emoluments for longer periods and also, as a result, getting higher pensions at super-annuation.

*There is a need to ensure parity in pensions of veterans who retired in the past and those who super-annuate currently.

*Rank of an armed forces retiree, though an important yardstick for OROP, cannot by itself be the sole criterion for ensuring parity of pensions for veterans. For past retirees, parity of pensions with present day retirees needs to be established considering the service rendered in a particular rank and, most importantly, pegging the parity at the current pension for the rank the former would have been currently entitled to purely on the length of service they, the past retirees, had rendered at the time of retirement.

There is an urgent need for all affected retirees to comprehend all aspects of the matter and to begin to list out and consolidate the various relevant ideas that have a bearing on this issue. Some ideas on the same subject have been highlighted in this Blog in the past.

A New Angle To OROP

With the recent news of the increase in the age of superannuation for civilian employees, the defence fraternity could consider factoring in the resultant effect on the parity of defence pensions with those applicable to civilian counterparts. 

The "One Rank One Pension" issue may, perhaps, need to be viewed not only from the viewpoint of parity amongst defence veterans but also with reference to what a civilian pensioner, in an equivalent post to the one the veteran retired in, would get by way of pension. 

Let's take the example of a Col, or equivalent rank in IAF or IN, retiring at the approximate age of 55, depending on the branch or arm. Now, when he reaches the age of 62, would his pension equal that of a civilian in an equivalent post retiring at 62? 

The disparity would have been considerable even without the increase in retirement age for civilians by two years. That is why there may be some relevance to the apparently abstract points raised in a previous blog post.

Matters Related To The Rank Pay Case

Though considerable effort has gone into keeping all affected up-to-date on the awaited judgement regarding the rank pay litigation, some issues need to be listed as FAQs by the appropriate Forums and Blogs, along with clear answers, for the guidance and information of all. 

As an example, the following could easily be included in such a list of FAQs: 

* Would rectification of the anomaly consist of calculating arrears of pay and allowances, and interest thereon, wef 01 Jan 86 till 31 Dec 95? 

* Would the rectification also consist of re-fixation of salary and allowances for the period O1 Jan 96 to 31 Dec 2005 and arrears paid along with interest? 

* Would the amount of pension paid to retirees also be recalculated and arrears paid with interest due to the expected increase in pay for the period of service? 

* As the fifth pay commission had introduced parity in pensions, would any upward revision in pensions as a result of the awaited judgement also have an impact on the pensions of pre Jan 86 and Jan 96 retirees? 

{Edit 1} : It is apparently in everyone's interest to address all such queries to websites/blogs such as that of RDOA and to be wary of mistakes such as duplication of litigation as advised in this Blog Post. 

{Edit 2} : Record of proceedings on the hearing on 24th February, the date previously fixed by the Hon'ble Supreme Court for a "final disposal" of the case, contains a new order. (link now expired)

{Edit 3} : The hearing of the case on 09 March resulted in an adjournment till 13 April, as recorded in this court order. (link now expired).

The Rank Pay Matter Relating To IV CPC{ continued :-) }

As had been suspected, pre-mature self-congratulations in some sections of the affected populace notwithstanding, the Government has indeed succeeded in delaying a resolution of the matter by clubbing all manners of subjects with the clear and distinct issue of the rank pay arrears of IV CPC. A final verdict has now been put off till such time the Hon'ble Chief Justice is presented with the matter and then, if it is so decided, the case would have to be referred to another bench. It is anybody's guess as to what sort of timeline could be assigned to the legal process. One can only look forward to updates in the media like this one . Edit 1: The Record of Proceedings of the Hon'ble Supreme Court has now been updated Edit 2: The Hon'ble Supreme Court has fixed 24 February 2011 as the date of "final disposal", as seen from the Record Of Proceedings. Edit 3: The next hearing is on the 8th March. Full details here.

OROP {continued :-)}

As the issue remains unresolved, one gets to read fresh "updates" and opinions on the matter every other day. There is a noticeable lack of clarity, however, as to what sort of structure "One Rank One Pension" is eventually intended to assume. It is time for the ESMs, currently in the forefront on the matter, to give some formal shape to the desired outcome.

For instance, the following aspects have never been fully explained:

*How do the proponents of OROP propose to take the length of service in a retiree's last rank into account for the calculation of pension? As an example, would a Lt Col (Retd.) who superannuated in 2001 with, say, 10 years of service as Lt Col, be entitled to the same pension as a Lt Col who superannuated in 2007 with just 3 years of service in the same rank?

*Would the proposed OROP take into account the change in rank structures pre and post AV Singh Phase I implementation. As an example, how would the pension of a Lt Col(TS) (Retd.) who super annuated on 30 Nov 2004, before the implementation date of AV Singh Committee, with, say, 29 years of service be treated vis-a-vis the pension of a Col(TS) who super-annuated, with the same sort of commission and an equivalent length of service, on 30 Nov 2007 after the date of implementation of AV Singh Phase I? Or would the non-retrospective implementation of AV Singh Phase-I cast a shadow on OROP as well, especially for Officer retirees.

*Why are ESMs not countering the repeated assertion by the political classes that OROP would be required to be extended to all Govt employees and hence would be prohibitively expensive? After all, civilian employees do not have to bear the burden of a truncated career and there is very little justification for a universal OROP as has been explained previously.

But, the continued thrust on the matter is indeed heartening. Till such time some positive official development is forthcoming, occasional updates do serve an important function, viz., of keeping all concerned abreast of the situation.