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A Format For Understanding And Calculating Financial Effects Of Annual OROP Review

Contents of this blog post were transferred to this blog post. Please click the link to read.

The OROP "Increment" Issue

In the midst of media frenzy, which can often turn bizarre and out of touch with reality, some mis-conceptions, borne out of tendencies of individuals or sub-groups to hold forth on their rather unique interpretations of a subject, can get wider publicity than deserved. Even more dangerous is the possibility of such discernibly untenable views bringing dis-credit to an entire subject or issue to which these "opinions" are sought to be linked.

As to how the subject of a "3% annual increment" arose in relation to OROP could be the subject of post-mortems and analysis for decades to come. There is, already, very sound analysis on the dubious nature of the "increment" matter. A link is placed at the bottom of this blog post.

Suffice it to say, to ensure that OROP means "OP", there will be a requirement of an annual review of the pension bench-marked for each rank corresponding to varying years of service. It would need to be checked that the pensions bench-marked for April 2014, the implementation date for OROP, are not lower than the pensions actually paid in months of review, viz., July 2014, July 2015 and so on. As pension payment and salary disbursement processes are computerized, such annual checks ought not to present difficulties to organizations such as PCDA.

Very briefly, this can be done for pensions paid in July 2014, July 2015 and so on. Data for 2014 and 2015 should already be available and for July 2016 and later it could be made ready by September of the respective year. It must be noted that from January 2016 onward, recommendations of VII CPC would apply. But, as those recommendations may be put into effect at a much later date, this system of reviews could continue beyond 2016 till implementation of recommendations of VII CPC.

Let us be clear, these July reviews may or may not result in enhancements in pensions bench-marked for the month of April 2014, the starting point for OROP. If at all some enhancements are called for they may or may not apply across the board. The enhancements, if any, may or may not amount to 3%.

Just because the salaries of serving personnel get annual increments does not mean these would necessarily result in enhancement of pensions for the same rank with the same number of years of service. As an example, when a serving person with 24 years of service gets his next increment, his years of service may also go up to 25, though not in all cases. So his pension with 25 years of service may still be equal to that of a previous retiree with 25 years of service. The pension of a retiree with 24 years of service may not get affected.

Ready-made salary tables showing actual salaries of serving personnel, though extremely useful as inputs for further study, can mislead if read out of context. Instead a blank format as embedded below may serve to illustrate what is required to be done in a process of pension review and what are the issues involved.

The format also highlights the need for parity of pensions desirable in the context of time bound promotions, an issue as important as the need for an annual review, if not more. {Edit: The Maj_Lt Col/Col 26 years parity zone in green applies only to Officer Retirees with PC as per terms and conditions of commissions}

{Edit} : For a check on the validity of irrational scare-mongering on outgo, a snap-check has been proposed in this subsequent blog-post.

For further reading on the 3% "matter" readers may also like to peruse this blog post.

Dangers Of 140 Character Wisdom On OROP

The famous micro blogging website, and it need not be named here, does great service in this day and age of a hyper connected world. However, every once in a while, the downside, of a tiny ripple of a mere idea getting turned into a cliff sized wave of flawed interpretations, becomes more than a little apparent.

I've just had yet another experience of this recently. While engaged in a conversation about the justification, or the lack of it, for applying the concept of OROP to civilian organizations, I tried to bring out my logic with an illustration of a hypothetical situation in which OROP would be called "AFTCPB", an acronym for "Armed Forces Truncated Career Pensionary Benefit", so as to make it unambiguously clear to the meanest intelligence that:

It applied to armed forces personnel only.
It was based on the shorter career spans of people in uniform in armed forces.

The aim was to put forward the logic that since service conditions of civilian organisations did not include those particular attributes present within the armed forces, perhaps, OROP need to apply only to personnel of the armed forces who retire at much younger ages as compared to personnel of other government organizations, including the Central Armed Police Forces.

The 140 character nature of the post did not exactly facilitate holding forth on explaining in several paragraphs that calling OROP by another name to illustrate its "armed forces" specific application was merely a "What If" approach. In other words, "What if OROP was called AFTCPB? Would other civilian organizations be also able to say they needed it too, as TC (Truncated Careers) did not apply in their case"?

This did not register with another person who insisted the civilian organizations, he incorrectly referred to them as "para military", would ask for AFTCPB as well. This was attempted to be clarified by yet another person who joined the conversation, a familiar participant in blog comment threads. The hash tag #OROP appears to be a great signalling device and never fails to attract the attention of the thousands affected. Here's a link to the conversation.

There the matter would have ended, when notifications on my micro-blogging account alerted me that my "handle" had been mentioned in others' posts. I found the same issue of calling OROP something other than OROP was being discussed and someone else had in fact put forward a serious proposal that it actually be renamed and that his post be re-circulated, perhaps like one of those numerous online petitions that seek the support of other like minded persons on the web.

As things often happen, it led to an exchange between participants suggesting this was an idea derived from what I had mentioned, about calling OROP as AFTCBP, albeit only to illustrate its applicability solely to the armed forces, and that if anything required re-circulation, it was my original post. Part of this subsequent exchange clearly demonstrates how stake holders can argue at cross purposes, steering the ship of logic off course, into uncharted waters.

That is the last thing that is required. It would be far from constructive to even attempt to rename OROP. It merely needs to be understood by everyone that the justification for OROP applies only to the armed forces. If the justification is fully explained in documents implementing OROP, as it is most likely to be explained when and if the implementation takes place, there would be no doubt in anyone's mind OROP applies only to personnel of armed forces.

If there are shortfalls or deficiencies in pensionary benefits of CAPF or civilian government organizations then a case for rectifying those has to be taken up separately and not because of implementation, when and if it happens, of OROP for personnel of armed forces.

So, in the remote possibility of anyone at all having the "re-circulation" urge, perhaps consideration could be applied to using the "share button with the ~~bird~~ t" at the bottom of this blog post as a more constructive alternative to any 140 character bit of wisdom, mine or anyone else's, on what OROP should or should not be called.

As I had mentioned previously, the ship of considering alternatives to OROP had sailed a long time ago. That seems to apply equally to the option of calling it something else.

The Need For Retirement Rank Normalisation For OROP

Whatever be the reason for the distinct sound of sand in the OROP gear box, there now appears to be no major conceptual hurdle to implementing it.

The only thing, one which I have stressed upon repeatedly in the past, and one which could use a bit of repetition here, albeit briefly, is if a Commissioned Officer, a JCO, a Havildar, Naik, Sepoy did x years of service before retiring in year y, that must have a direct bearing on the pension that he now earns, not just the rank he retired with in year "y".

This, needless to say, can only apply to time bound ranks. Unless it is firmly grasped that a failure to do so would only be introducing another basis of inequity and disparity, our efforts in obtaining some form of delayed justice through OROP would have fallen short.

If we apply a bit of mind to the concept of a rank, starting with ranks given with time bound promotions, the first thing that ought to strike anyone is that it is a complex entity. It is not just the sum total of the consonants and vowels that comprise the word that denotes a rank. There is a vital need to be able to differentiate between the "nomenclature" and "description" associated with a "Rank".

A rank obtained on the basis of time bound promotions can be seen to be dependent on several variables and hence is not a constant itself.

One simple depiction of a rank as follows ought to yield some very logical inferences, without the intervention of words:

ser@pr	R	ret_yr

tc

Where R~ "nomenclature" of rank; ser@pr~No. of years of service at promotion; tc~type of commission; ret_yr~year of retirement

Then, clearly, a veteran would not just have a retirement rank of M-A-J-O-R. It would be one of the following :

Maj

2005

≠

Maj

1995

≠

Maj

1975

13	Lt Col	2005	≠	18~20	Lt Col	1995

pc				pc

To put it in plain language, each one of those three Maj ranks are not "one rank". Similarly, the two Lt Col ranks are different, hence the "inequality" sign.

Therefore, by hind-sight, before getting on board the OROP bandwagon, there was a need to come to terms with what was meant by “One Rank”. But having come this far, and “complexities” now being cited as a basis for the need to be “patient”, a quick fix solution, to the variability of criteria for time bound promotions needs to be urgently incorporated into any envisaged resolution of the “complexities”.

This merely re-states, at what is perceived to be a crucial juncture, some ideas expressed in the past.

RE-VISITING THE CONCEPT OF “VARIABLE RETIREMENT RANK”

One of the peculiarities of following topics online and occasionally engaging in exchange of views, on subjects that concern sizeable sections of veterans, is that sometimes it is hard to track previous discussions involving concepts or ideas that one had put forth oneself or been fortunate enough to have received by way of an input from other stake holders. Nevertheless, regardless of whether or not a track-back is possible, an idea lives, if not forever, then certainly for a very long time till proven to be absolutely without merit.

One such idea is that of a “Variable Retirement rank” or “Veteran Rank” as against that of the present fixed “Retirement Rank”.

Most of the thrust in the campaign for OROP has been based on taking the “Retirement Rank” as a gold-standard benchmark for ensuring pension parity of current and past retirees. I have repeatedly tried to highlight the “variability” of “Rank” as against the solid, ground-level parameter of length of service. Please consider following the link at the bottom of the blog post.

Certainly, it is nobody’s case that for true and fair parity in OROP, with the length of service being equal, pensions should be equal, regardless of rank at the time of retirement. It would certainly be less than a serious contention to try and propose the notion the pension of Maj Gen should equal that of a Lt Col if they have the same number of years of service at retirement.

However, as has also been repeatedly pointed out on this blog, when ranks are defined based purely on years of service, then there is an urgent need to maintain pension parity between older and current retirees with the same years of service even if they retired in different time-bound ranks, as the years of service required to attain ranks can change from time to time. This gives rise to the basis for treating time-bound ranks as “variables” and not “constants”.

To be sure, and this too is a repetition of what I’ve stated previously, ranks based on selection too are variable as are the QRs for attaining them. However, there appears no clear-cut logic with which to establish a relationship between ranks attained through the selection process in the past and those attained, also by selection, in the present scheme of things. Of course, based on statistical models that took into account all the variables of selection in different eras, some viable algorithm could be generated, by a think-tank consisting of Operations Research eggheads, for deciding whether a Lt Col retiree from the 70s would be equal to a current retiree in the rank of Brigadier in terms of selection-basis parameters.

But when it comes to time-bound ranks, the issue is straight forward. Without getting into considerations based on Quantum Mechanics or the speed of rotation of Earth, it won’t amount to a risk of inviting too much of ridicule in putting forth the point of view that 21 years in 1976 equal 21 years in 2015.

If the time-bound retirement rank of, let us take the case of Officers as an example, an officer retiring in 2015 with 21 years of service is Lt Col, then the retirement rank of a Major, who retired in 1977, also with 21 years of service, is equivalent to the current retirement rank of Lt Col in terms of service rendered. Provided, of course, they belong to the same cadre and the types of their commissions are identical.

There have been attempts in the recent past to establish parity of pensions based on such considerations. Even a copy of the services DGL on OROP, that had been doing the rounds on the web, had suggestions for equating pensions for older time-bound ranks with those of current ones. None of these attempts have come to fruition so far. Even with OROP, a Maj may not get the same pension as a present Lt Col with equal service even if the former had put in 20 years of service. The same applies to a Maj or Lt Col retiree who had put in more than 26 years of service and who ought to get the pension of a current Officer retiring in the time-bound rank of Col.

OROP insists on variability of pension of older retirees to match pensions of current retirees based only on “Retirement Rank” which is ‘fixed’ for any specific individual. The fundamental thing to consider is, if the concept of fixing a pension based on certain criteria such as pay drawn at retirement, is to undergo a paradigm shift by making it keep pace with the pension of current retirees, then there is nothing outlandish in suggesting that the fixed “retirement rank” too needs to be converted into a parameter that would take into account the variability of all the factors that determine a current time-bound rank.

We could simply state that the retirement rank of any individual past retiree be made equal to the retirement rank that is currently attainable on time-bound basis with the same years of service put in by him. This new retirement rank could be promulgated through corrigenda to PPO’s and pensions re-fixed, under OROP, based on the revised retirement rank.

It can also be suggested the concept of "veteran rank" be seriously considered. Even if the “retirement rank” stays constant, the current “veteran rank” could change and be promulgated through PPO corrigenda based on any reductions introduced in service required to attain time bound ranks.

Such a mechanism would not be a “notional promotion” but a means to deliver bare-minimal standards of parity, based only on time-bound ranks, but within the ambit of OROP. Use of a veteran rank would also provide justifiable social parity with current retirees. Some civilian benefits earmarked for armed forces, in terms of allotment of land, membership of clubs etc is based on the nomenclature of the veteran’s retirement rank. A Lt Col retiree with 28 years of service may be currently ineligible to apply for a benefit available to a current retiree with the time-bound rank of Col with just 26 years of service.

This would also take care of most retrospective issues in respect of pension. When it is decided to upgrade a veteran rank, it would be required to specify the date of up-gradation. A Maj or Lt Col with 26 years of service would have his veteran rank upgraded to Col with effect from 16 December 2004 on which date the time bound rank of Col at 26 years of service came into being. Pensions would be upgraded to that of the up-graded veteran rank synchronously i.e. a Maj or Lt Col would be eligible for pension applicable to time bound rank of Col wef 16 Dec 2004 if the Maj or Lt Col had completed 26 years of service at retirement.

In such a case, the pensions of upgraded veteran rank of Col from retirement date to date of implementation of OROP would be governed by the existing minimum pension of rank in pay band for Col with equal service, and from date of OROP implementation, pensions would be equal to pensions under OROP as applicable to Col with equal service.

If at a later date someone decides to reduce the service required to attain the time bound rank of Col to 23 years, the veteran ranks, and hence pension, of Maj and Lt Col with 23 years of service would stand up-graded to that of Col with effect from that date.

It must be highlighted here, once again, such a mechanism would not deal with any discrimination caused in the past in respect of pay, allowances and seniority of Officers while they were in service, such as in the case of arbitrary selection of date of implementation of AVS-I. That, as I have stated previously, is quite a distinct area that needs a careful and measured legal evaluation.

For more reading on the matter, this link may be of use.

Parallels Between Efforts Of Sqn Ldr C Singh And Accomplishments Of Maj Dhanapalan

Some years ago, I think it was on a chatroll previously featured on a popular blog, I distinctly recall making a suggestion to the effect that serving and veteran officers had, in all probability, also been denied proper fixation of rank pay at the time of implementation of recommendations of V CPC.

To put this into context, at that time all discussions were centred on the rank pay issue related to IV CPC and how Maj Dhanapalan's valiant battle to right that wrong was about to benefit everyone else. RDOA had already taken up the legal process to extend a similar benefit to thousands of others affected. But in those days, details of the litigation were scarce and it was largely out of conjecture and online discussions that facts and details were beginning to emerge.

In response to my suggestion about a similar wrong-doing at the time of V CPC as well, I'd received a response of "I'm gobsmacked" from another knowledgeable and active member on the blogosphere and the erstwhile chatroll. He later on went to suggest that perhaps Maj Dhanapalan's great act relating to IV CPC was being repeated by me afresh in relation to V CPC. It wasn't, of course, as RDOA had already taken all those aspects into account in their litigation. The subject was clarified in brilliant detail by RDOA in their subsequent posts.

But I have often been troubled by the idea that we have probably missed the chance to acknowledge another "gobsmackingly" valiant effort by Sqn Ldr C Singh who waged a legal battle on a different front that too could have affected thousands of veteran and serving officers. His battle did not end in outright victory as his application was rejected at the level of an Armed Forces Tribunal. But he was the first one, at least to my knowledge, who took up a cause that affected thousands. Just as in the case of Maj Dhanapalan's case, as thousands had just "lumped it", after the IV CPC recommendations were "implemented" to the stake holders' collective disadvantage, and only one individual took up the matter, so did Sqn Ldr C Singh on quite a different issue.

To this day, I have not been able to find out if he filed an appeal in a higher court or if some other litigants had sought to represent on the same matter. But the issues that struck me as relevant in 2010, when I first learnt of this case, remain, to me, more relevant today due to more recent judgments that make the issue of "discrimination" a lot clearer for all stake holders.

The matter that Sqn Ldr C Singh had taken up was the way the phase I recommendations of AV Singh Committee were implemented. It had denied him the retirement-rank and retirement benefits relating to the next higher rank, in his case, of Wing Commander as he had retired prior to the implementation.

But the matter will not cease to hold the interest of all those with a sense of the legal implications the issue could have or ought to have had at the time. In brief, as the matter has been fully covered previously (there is a link in the last paragraph), the following salient matters bear repeating:

The implementation dated March 2005 was retrospective but from an arbitrary cut-off date (16 Dec 2004).

The choice of the implementation date divided a homogeneous class into two groups, with one group getting benefits and the other not.

The choice of implementation date, if rectified (let us call it the "potential rectified-date") would result in arrears of pay and allowances to all Officers who were serving at the time of the "potential rectified-date", as their subsequent promotions under AVS-I would be deemed to have taken place earlier, as governed by the earlier "potential rectified-date".

For those who retired in Nov 2004 and earlier, prior to existing implementation date, their retirement ranks would have to be suitably amended to the higher time-bound rank admissible under AVS-I, with effect from the "potential rectified-date". Let us not forget, those who retired in Dec 2004, Jan and Feb 2005 also had to be regularized retrospectively from existing implementation date in the higher rank after the issue of the Govt order for implementation in March 2005.

The rectification of the implementation date would have a cascading effect on pay, allowances, promotion dates and pensions of all those who served between the "potential rectified-date" and a day prior to actual implementation date.

But, there is no place like the beginning to follow the matter. Those interested could consider reading the contents (now suitably highlighted and amplified), and following the links in my blog post of 2010.

Minimum Guaranteed Pension As Related To The Rank Pay Matter

For some time the matter of the minimum guaranteed pension has been in the news, ~~the latest~~ a recent update being on the Aerial View blog. {Edit: The most recent update is accessible with the link at the bottom of this blog post}.

Briefly, the issue is related to the date of implementation of revised "Minimum Guaranteed Pension" for pre 2006 retirees, which was fixed as 26 24 September 2012 vide Govt. Of India, Ministry of Defence letter number 1(11)/2012-D(Pen/Policy) dated 17 January 2013, a copy of which was circulated with PCDA Circular 500 of the same date.

As stated in the Aerial View blog post, referred to at the first para of this blog post, the litigation for re-fixation of date of implementation as 01 Jan 2006, in place of 26 24 September 2012, is nearing it's final phase, the hearing now being stated to be scheduled on 13 Jan 2015 {Edit 1: Update ; ~~Now awaiting a fresh listing, perhaps in February 2015~~ Judgement now having been delivered on 17 March 2015}.

The case had to be taken up in the highest court of the land, at great expense and with herculean effort. Therefore it is all the more pertinent, for direct stake-holders and all the others affected, to review some of the attached issues which affect or are impinged upon by the likely positive outcome of the case. To start with, queries begin to form in one's mind as follows:

The case apparently, and the word "apparently" is important in this context, is concerned with just the date of implementation of the "Minimum Guaranteed Pension". Since it is a litigation in the Hon'ble Supreme Court of India, was it also intended to include the effect on the quantum of "Minimum Guaranteed Pension" as a result of the implementation of the rank pay revisions? Would the tables issued with the GOI letter of 17 Jan 2013 ibid now stand revised?

Since the rank pay matter concerns retired Officers of the armed forces, would the litigation also deal with the important and, so far, un-addressed, issues of parity of "Minimum Guaranteed Pensions" of Majors having 21 years of service with the pensions of Lt Col and "Minimum Guaranteed Pension" of Maj and Lt Col with more than 26 years of service with the pension applicable to Col(TS) of equal service?

While implementing the Hon'ble Supreme Court judgement on rank pay, GOI, MOD vide letter number 34(6)2012-D(Pay/Services) dated 27 December 2012, had also ordered payment with effect from 01 Jan 2006, of interest on arrears, including those of pension, resulting from the partial implementation of the rank-pay judgement. Would the litigation also aim to obtain a more just and equitable compensation by way of interest for arrears not ascribable to the rank pay case but applicable only to those arising out of the "Minimum Guaranteed Pension" matter?

Whatever be the scope of this litigation, it's outcome would be of interest to all veterans and yet another reason to feel proud of the direct litigants and the inspiring role of RDOA in coordinating the whole issue. {Edit 2} : The order of Hon'ble Supreme Court, delivered on 17 March 2015, is accessible by following this link.

{Edit 3} For the most recent update, please use the link to the blog Indian Military: Service Benefits And Issues .

{Edit 4} For the connected issue of pension parities between ESMs that retired in years gone by and those who retire in the present, the blog post on 'Variable Retirement Rank' may also be relevant.