Expected Hearing Of A Case With A Possible Bearing On OROP

In their order dated 16 Feb 2015, in the case Civil Appeal No(s). 2966/2011, the Hon'ble Supreme Court of India had "...granted three months' time finally to work out the modalities for implementation of the one rank-one pension..." to the Government of India. The next hearing for the case is likely to be on 28 Sep 2015. How the case relates to OROP in general, is for legal experts to outline for the enlightenment of others. But in view of the recent "announcement", the court order could have some effect on, or relationship with, the rolling out of OROP.

Briefly:

*Does the outcome of the case apply only to the respondents or would it imply implementation of OROP for all?

*Does the announcement of OROP on 05 Sep 2015 meet the requirement of the Hon'ble Supreme Court for the appellants to "work out the modalities for implementation" or would it require the issue, by due date (which has already expired) of the notification and issue of Government orders for implementing OROP?

*What if the Hon'ble Supreme Court finds that non-issue of the implementation order constitutes "contempt"? Would a contempt order then be issued?

*Whether the order leads to implementation of OROP or counsel for appellants submits that OROP has been implemented as directed by the Hon'ble Supreme Court, would it have any bearing on the various claims to credit for having implemented OROP or for having obtained its implementation, considering that it would be seen to have resulted on account of a judgment of the Hon'ble Supreme Court?

Though the ongoing dialog on OROP and its implementation would be central to the collective interest and focus of all stake holders, there is just a chance the hearing and judgment could prove to be relevant as well.

The Potential Can Of Worms Of Averaged Pensions In OROP

It is anybody's guess when an official implementation letter for OROP would be issued. Till it can be seen and its detailed provisions are known, it would really be impossible to assess how OROP would translate into reality.

In the last blog post, I had placed the methodology of calculating the average of pensions, for a certain rank with a certain number of years of service, as the most important concern of all. Now, with the other issue that had caught the public imagination, viz., the applicability of OROP to pre-mature retirees, receding into the background, it may be important to look at the averaging matter so as to be a little aware of the consequences any decision regarding the same could have.

The statement of 5th September, on the subject of averaging, carries just the sort of vague tones of feigned innocence that ESMs, with their hard earned experience of the devious manner in which phraseology can be deployed as a weapon of offence against them, might be justified in sitting up up and taking notice. If such a blatant attempt as introduction of that VRS issue can be made, in a statement to be read by no one less than Hon'ble RM, there could be some reasonable basis for concern on what else might be in store.

Not being one inclined to favor spreading paranoia, I would still urge a bit of caution. I would not like to subscribe to current speculations whether or not the highly publicized VRS matter was an overt feint intended, by some sections, to mask more covert measures for whittling away at the entitlements that should flow from OROP. The VRS matter could have been a simple last minute drafting glitch, but it would be erring on the side of safety to not take things at face value.

To quote the statement of 05 September 2015, "..Pension will be re-fixed for all pensioners retiring in the same rank and with the same length of service as the average of minimum and maximum pension in 2013..".

What does the "average of minimum and maximum pension in 2013" mean? Some of the questions raised would, of course, be the same as those mentioned in the previous blog-post. But I felt it best to keep this list of queries in one place here. A bit of repetition of the old along with newer aspects, as they emerge, may not hurt.

*Is it the maximum and minimum pension actually paid to a certain rank with a certain number of years in 2013? If so, will it also include pensions of those who retired before 01 January 2006 paid in 2013

*Is it notional max and min pension calculated on the pensionable emoluments of a certain rank with a certain number of years?

*If it is the notional pension, how will it be calculated? For instance, for a Lt Col with 20 years of service at the beginning of base year (January 2013 if it is calendar year or April 2013 if it is the financial year), will a calculation first be made to see what the pay of that Lt Col would have been in December 2005, i.e. at 13 years of service for the calendar year scenario and 13 years 03 months of service in the financial year scenario, in both of which he would have been in the Lt Col rank in Dec 2005. Then the up-gradation of VI CPC would have to be applied to see where the fixation would have been from 01 Jan 2006 and his pay on 01 Jan/01 Apr of 2013 arrived at after applying increments. Similarly, would the notional pension at the end of base year (December 2013 or March 2014) be then calculated and average pension calculated from the notional pensions at the beginning or end of base year?

*Would the simpler way of just taking the notional pay at 20 years of service from the pay-band for the Lt Col, of the previous example, be the solution? But that would assume the Officer started at the bottom of the pay-band and reached the pay as applicable to a Lt Col with 20 years of service. This, in most of the cases, won't be true due to intervention of the VI CPC implementation date of 01 Jan 2006.

*The calendar year vs financial year ambiguity is peculiar, to say the least. If it had been the financial year 2013_14 ending 31 March 2014, it would have made perfect sense to implement from April 2014, as was originally announced by the Government as, let us face it, Government is Government, regardless of which political party is in power. If, due to reasons of bureaucratic or political prestige, July 2014 is to be the date of implementation then should not the base period, rather than "base year", have been fixed as from July 2013 to June 2014?

*How will pension of an ESM with a combination of rank and a certain number of years of service, that no one retired with in base year, be worked out? For example, how would the pension of a Major with more than 20 years be calculated? There will be no notional or actual pay or pension data for 2013 as there will be no Officers retiring in the rank of Major in 2013 with service equal to or more than 20 years of service as all officers would have become Lt Col after 13 years of service. Similarly, there would be no Lt Col retirees in 2013 with more than 26 years of service. They would minimally have received time bound promotion of Col on completing 26 years of service. As a specific example, how would OROP pensions of, for instance, a Major retiree with 24 years of service or a Lt Col retiree with 28 years of service, who retired before 2006, be calculated?

*How will notional pension be calculated for retirees in ranks with a certain number of years of service that would place them at top of pay-bands of ranks they had retired in, as service required to reach top of current pay-band of the rank they had retired in years ago would probably correspond to up to 10 years less than the service they had put in? To, again, take the example of a pre December 2004 Lt Col retiree with 28 years of service, if his pension is not equated, as it should, with that of someone retiring in base year with equal service and promoted, on time-bound basis, to Col, then the top of scale for Lt Col pay-band would correspond to years of service less than what the Lt Col had put in. Would they then exercise some imagination to extend the pay-band for calculating his pension for the same Lt Col rank or cook up some imaginary "stagnation increment" formula rather than shifting him notionally to the pay-band of Colonel, which would be closer to reality of pensioners with same service and same rank retiring in base year?

*Even now, with the "minimum of pay in pay-band" principle, there is a gradation in pension tables with qualifying service. Some panel discussions referred to "mean of scale" and whether it should not be "top of scale" i.e. notional pensions based on figures of pay for these two points in the pay-band. That sounds a bit too much like a "rule of thumb" process. Would that not simply remove the "years of service" aspect of OROP from the equation? Would it, for example, equate the OROP pension of a retiree with 20 years of service to that of one with 30 years of service just because they were in the same rank, hence the same pay-band, hence the same mean, at retirement?

I would like to, again, stress here that, to my mind, this issue of calculating the "average" has even greater relevance than the matter of periodicity of OROP reviews. Even if discussions focus on bringing down the periodicity from five years to three or two, the matter of the exact manner of calculating pensions should receive the highest priority. It is a more critical component of implementation as subtle variations could hugely impact results.

While shrill protests, to the point of hoarseness, over "One Rank Five Pensions" are understandable, maybe a bit of application of mind to the "fixation methodology" is required without further delay for getting details transparently sorted out before a notification gets formalized from keyboards prone to "as on/with effect from" kind of anomalies.

The OROP Announcement

With Hon'ble RM repeating most of the press-reports of the last couple of days while announcing the outlines of OROP, the initial reaction of dismay from all affected is understandable.

Some of the online praise being heaped on this "implementation", clearly stemming from political affiliations or ignorance, or a combination of the two, is also understandable but not really germane to the issue.

At first glance, the manner in which OROP is intended to be implemented raises several issues. These can be listed, in my perception, in the following descending order of priority :

Averaging Of Pensions Paid In Base Year

*Which pensions are to be "averaged"?

*Will these be pensions paid throughout the base year? Would the base year be the calendar year 2013 or the financial year 2013_14? {Edit} : Will these be notional pensions based on pay and years of service for each rank?

*Will these also include the bottom of pay-band pensions of pre VI CPC  retirees paid in base year thus bringing OROP pensions much lower than pensions of current pensioners with the same rank and pension service? That is what the statement appears to imply as per highlighted text.

*Which pensions paid data from base year will be used for Major retirees with more than 20 years of service as no such retiree would have retired in base year, all Officers with that length of service having become Lt Cols. Would the OROP pension for such retirees be based only on pensions applicable to those who retired as majors prior to VI CPC?

*Similarly, what would be the pensions paid data for Lt Cols and Maj retirees with more than 26 years of service as no Maj or Lt Col would have  retired with as many years of service in base year or after 01 Jan 2006. Would such officers also be getting their pensions bench-marked to those with equal service who retired prior to 01 Jan 2006, in other words the existing "bottom of pay-band pension" i.e. "no change"?

*Most importantly, how would such averaging bring about OROP? Averaged pensions, mostly applicable to pre 01 Jan 2006 retirees, would be much lower than pensions of current retirees as their own lower non-OROP pensions (bottom of pay band) paid in base year would be used for calculating the average.

Five Yearly Review This had been an important issue between the ESM associations and the Government. There were points of view that perhaps a biennial review, or even a triennial one, could have been used. I am very sure even an annual exercise of reviews is entirely feasible as I have stated in the past few blog-posts. But, now with this averaging bomb-shell, the review takes on another vitally important dimension. ESM associations had expressed the misgiving that with a five year review we would have One Rank Five Pensions. Bad enough though that was, now with this averaging scheme, even with a one year review there would be several pensions for the same rank. There would be the highest pension for a post 2006 retiree and a range of pensions of those retiring after 01 Jan 2006 and then the averaged pension as applicable to pre 2006 retirees which will be the lowest of the lot. The annual review could have bridged the gap somewhat through a process of annual averaging. But with the five yearly review, that option too is gone.

Time Bound Promotions This had been covered in online discussions and apparently catered for in a DGL attributed to thinking within the Services HQs. Today's statement on OROP is totally silent on this very important issue giving rise to apprehensions of further strife and litigation on a matter clearly related to discrimination.

                   

Pre-Mature Retirement On TV, one had to uncomfortably view interviews with spokespersons so clearly trying to fudge issues, trying to mislead by bringing in issues of "boarded out" personnel and then trying to divert attention to those who had not completed pensionable service. How would the matter of OROP relate to those who had not completed pensionable service anyway? The interviewers also did not know how to press the matter by being specific and asking these fidgeting entities as to what was the disposal in respect of the people who had taken pre-mature retirement after completing pensionable service and were currently in receipt of pensions. So, till the official Government letter implementing OROP is issued, this matter will continue to exercise the minds of those affected.

Unless these issues get addressed in subsequent days and weeks, OROP as announced will have failed to come anywhere close to the way it has been defined and accepted.

                     

Format For A Quick Snap Check On Increase In Monthly Outgo Caused By Annual OROP Review

While the previous blog post points to the nature of complete annual data that needs to be furnished, by opponents of annual OROP reviews to substantiate their scare-mongering warnings of dire financial implications, there is an even easier "first-step" manner to debunk their fiscal-doom fiction.

Let data be presented as a sample case for a few Officer ranks in a slightly modified format to just establish monthly "outgo" trends from one review to the other.

It can be purely a simulation exercise as data upto July 2015 is already available with PCDA.

After this data has been obtained and usually rational but mis-informed people can be reassured that skies will not be falling on anyone's head, the next step would be to add two extra columns for annual outgo and  annual increase for the period.

It is doubtful, of course, whether the opponents of annual reviews would be willing and ready, though they are entirely "able", to render that data "faithfully", we can always have a recourse to a RTI application to obtain data in that format. 

A more extensive evaluation of financial implications, which are likely to be of the minimal kind, could be gauged from data in this format :

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.