First Impressions Of The OROP Table

In what should have been a straight-forward matter of implementation, unexplained delays, accompanied by publicly displayed recriminations and complaints, do sometimes give a rather unsettling impression of wheels within wheels, often seeming to spin in opposing directions.

As to why a clearly defined manner of rationalizing pensions has had to go through the cycle of evasions, accusations, public protests and foot-dragging can never be fully clear to most stake holders. The problem has been aggravated for affected veterans by the marked reluctance, on part of the authorities and the representative bodies engaged in steering the matter to some form of conclusion, to share the nature of their deliberations or details of the modalities of implementing OROP.

Of direct concern to stake holders was the precise manner in which OROP pensions needed to be calculated, the actual data on which these calculations were to be based and the manner of validation that needed to be put in place to ensure freedom of the final award from errors and mis-calculations. 

Even now, in-spite of a rather vocal movement over the implementation of OROP, there is precious little clarity on how the definition of OROP has to be adhered to. With that in mind, it is a bit of relief that the "tables" for OROP have now at last appeared. A word of appreciation for the government sraff who must have worked hard to ensure implementation would not exactly be out of place. Most importantly, with the tables having been circulated, those affected have something in black and white to base their queries upon.

There is no place like the beginning. At the risk of repetition, it may be useful to choose to be guided by the official pronouncement on how OROP was to be implemented. To summarize the manner of fixing pensions under OROP, and these are authentic quotes from Govt Of India, MOD, DESW Letter No. 12(1)/2014/D(Pen/Pol)-Part II dated 07November 2015:

* "Pension of past pensioners would be re-fixed on the basis of pension of retirees of calendar year 2013 and the benefit will be effective with effect from 01 July 2014."

* "Pension will be re-fixed for all pensioners on the basis of the average of minimum and maximum pension of personnel retired in 2013 in the same rank and with the same length of service."

We can now approach the implementation details and tables that have been issued vide GOI MOD DESW letter number 12(1)/2014/D(Pen/Pol) - Part II dated 03 February 2016. Firstly, this letter refers to the previous letter dated 07 November 2015 and makes it clear that the tables attached are based on the principles enunciated in the earlier letter.

So, one should safely assume that all figures quoted in the tables are based on averages of minimum and maximum pensions of personnel, with the same qualifying service, who retired in calendar year 2013. All that is required to validate the tables, and to assure oneself that these conform to the principles stated in the letter dated 07 November 2015, are access to basic information as to what service number, name, rank with x years of service who retired in calendar year 2013 had the minimum pension amounting to how much and, also, what service number, name, same rank, also with x years of service also retired on 2013 with the maximum pension amounting to how much.

Simple! One only has to take these minimum and maximum pensions, add them and divide them by 2 and then check that that the OROP pension for x years of QS for that rank is the same as the average. We can then be sure that at least the tables say what the original "principle enunciating" letter of 07 Nov 2015 had, well, enunciated.

Now, and this is very important, every one may not agree with contents of that letter. It may be argued:

• The revision of OROP pensions should not be quinquennial, as the letter says, but be annual or at the very least biennial.

• Some sections may feel the OROP pension should not have been the mean of maximum and minimum of pension in calendar year 2013 for same rank and same service, as the letter has laid down, but should have been equal to the maximum.

• People could disagree with the principle stated in the letter that the calendar year 2013 would be considered for taking into account the maximum and minimum pensions of pensioners who retired in that year, stating the financial year 2013-14 should have been considered. 

• Associations and groups could even argue that the date of implementation be 01 April 2014 as was the original intention stated by the Govt of the day and not 01 July 2014 as has now been implemented . After all, parties in power change but the Govt is Govt. What the Govt has stated once should not be undone merely because another political party has come to power.

Could veterans not argue and protest on those lines? Of course they could and they have, to the point of, if I may put it, contracting laryngitis.

But accepting all the shortcomings or lacunae in the Nov 7 letter, we do, I think, have an entitlement in trusting that, if not true OROP, then at the very least the contents of the 07 Nov 2015 letter would be implemented in letter and spirit and that the implementation instructions and tables issued would do exactly that. We would be entitled to transparency and clarity in the implementation which would have total conformance with what the letter dated 07 Nov 2015 says. We would have the handy means of checking conformance of tallying the averages against figures in the implementation tables as described.

But coming to the actual tables, one is presented with a slightly puzzling situation. There is, of course, no means of verifying the figures presented in the tables. There is no amplifying statement accompanying the table for clarity saying, "Minimum/Maximum pensions for Rank x, Service y years in calendar year 2013 are Amt A/Amt B", or words to that effect. Not that there is any doubt in anyone's mind that the official figures would reflect anything but the actual pensions diligently collated by the agencies assigned the task.

But any stake-holder first looking at the tables could justifiably experience some degree of confusion with the manner in which figures have been reproduced in the table. Let us take Table 1 to start with. It starts with a qualifying service of 0.5 years. The table lists the pension of Lt Col/Lt Col(TS) as well as as pension of Col(TS) as 17233/- for a QS of 0.5 years. Now, no matter how close to the stereotypical description of "military intelligence" an individual be, it should be easy enough to realize that no one is a Lt Col or Lt Col(TS) or Col(TS) at QS of 6 months. Also, if one's memory serves one right, no one gets a pension after a qualifying service of 0.5 years.

Clearly, no one could have retired in calendar year 2013 in the rank of Lt Col(TS), Lt Col or Col(TS) with a qualifying service of 0.5 years. Definitely not with a pension! So how did they get the minimum and maximum pensions for Officers retiring in 2013 with Lt Col(TS), Lt Col, Col(TS) ranks and having a QS of 6 months?

When the letter dated 07 Nov 2015 very clearly stated, and I repeat, "Pension will be re-fixed for all pensioners on the basis of the average of minimum and maximum pension of personnel retired in 2013 in the same rank and with the same length of service", did it leave any room for doubt as to how the OROP pension was to be calculated/fixed/displayed in the tables? When the letter dated 03 Feb 2016 clearly mentions that the tables are for implementing the letter dated 07 Nov 2015, there is even less room for doubt that the letter dated 07 Nov 2015 is a commandment of sorts.

How do we then explain the pensions for Lt Col(TS), Lt Col, Col(TS) ranks at a qualifying service of 0.5 years as mentioned in the table when, obviously, there was no pension, minimum, maximum, or average in calendar year 2013 for a QS of 0.5 years? That figure has not been calculated as per the rule stated in the letter dated 07 Nov 2015. Some other method has been used to establish that figure. Why has the process or method of calculation not been clearly spelt out?

Where is the guarantee the entire table is not based on some manner of calculation other than just getting the "the average of minimum and maximum pension of personnel retired in 2013 in the same rank and with the same length of service"?

Was the calculation based on the pay-bands for different ranks and not on the "the average of minimum and maximum pension of personnel retired in 2013 in the same rank and with the same length of service"? Was it some increment based calculation as in the case of the 7 CPC matrix? Was it some other thumb rule devised by the specialists in accountancy that some veterans are in such awe of, perhaps with good reason?

To further illustrate the ambiguities one can associate with the tables, how is it that the afore-mentioned table mentions the OROP pension of a Lt Col/Lt Col(TS) at QS of 32 years as 34765/- ? Where was this figure obtained from? Did officers with Lt Col/Lt Col(TS) with a QS of 32 years actually retire in "calendar year 2013" based on whose minimum and maximum pensions this OROP pension was calculated? Can the reason for a Lt Col/Lt Col(TS) with 32 years of service, retiring in that rank in "calendar year 2013" be shared with all the older Lt Col retirees whose pensions are to be fixed based on that figure?

Such doubts, in the absence of clarifications, attach to all the tables. It can only enhance trust and understanding if the authorities and those in the forefront of obtaining a just OROP share these basic details with all stake holders.

7 CPC Pensions For Maj / Lt Col : Co-Relating Years Of Service Of Older Retirees With 7 CPC Matrix Increments

I had touched on some aspects of the 7 CPC matrix in the previous post. I have always tried to reason for establishing some equitable basis of pension parity for older retirees given the reduction in years of service required to attain the same time-bound ranks as compared to earlier times.

With the arrival of 7 CPC recommendations and the still far from clear outcome of the fixation process under OROP, it can't hurt to try an make sense out of the prevailing confusion.

For the purpose of this blog post, I have tried to focus on older retirees in the ranks of Maj and Lt Col as they are most affected amongst officer veterans by the reductions over the years in service required for getting promotions based on length of service, putting them at a severe dis-advantage to current retirees in their erstwhile cadres and streams.

I have tried to co-relate the years of service now required to attain ranks on time bound basis as against the increments specified in different levels of the 7 CPC matrix. It becomes apparent, the number of increments attained by currently serving Officers for the same years of service is much higher than older retirees. So, for the same length of service, an older retiree would have fewer increments in the same level.

If the pension of an older retiree is fixed on basis of increments given to him in the corresponding pay-band,when he was in service, his pension could be equal to that of a current retiree with much less service than him. This could run totally counter to what OROP is supposed to bring about.

Then there is the old aspect of pension parities required with current retirees, with equal service, who get automatically migrated to higher Matrix levels, as compared to older retirees, due to faster time-based promotions (link to a previous blog-post introducing the need for pension parity points is placed at the bottom of this blog post). In this specific example, there is the issue of Majors who retired with more than 20 years of service and Maj/Lt Col who retired with more than 26 years of service. 

To put the whole matter in, and I must stress this, a hypothetical table, I have assumed that level 12 A 11 of the matrix applies to the rank of Major and the first increment would start at a service of 7 6 years; Lt Col would be governed by level 12A, his first increment stage in Matrix starting at a service of 13 years and level 13 for Col must be seen to have the first increment stage at 16 15 years.

With these assumptions we can attempt to build a first approximation of how pensions ought to or can get fixed as follows (Table can be enlarged or made to pop-out) (Edit: Table was amended based on feedback)

  

{Edit: Here is a link to a blog post that tries to explain the justification for pension parity points for older and current retirees based on equal service and reductions that have taken place in service required for attaining the same time-bound rank.}

LOOKING BACK AT 6 CPC PENSIONS THROUGH THE OROP AND 7 CPC PRISM

This blog post seeks to further examine hypothetical issues arising from a reference in the previous blog-post to some attempts apparently underway for a review of pensions of pre 01 Jan 2006 retirees as fixed by 6 CPC on the principle of minimum of pay for rank in pay-band and to get these fixed on basis of increments earned in the pay-scale corresponding to the appropriate 6 CPC pay-band.

It may come as a surprise to many that at this time, when everyone seems totally engrossed with OROP and 7 Central Pay Commission, such a retro approach of dealing with issues of 6 CPC should be on display. But, the whole matter of pensions and benefits is a continuum and CPC date markers do not provide for some rigid barriers that can't be crossed. Besides, what transpired at the time of implementation of 6 CPC will have a cascading effect on OROP and, in turn, on recommendations of 7 CPC.

As regards this issue of increments based 6 CPC pension fixation, I have very few details other than the rumour that it is based on some litigation involving veteran Major Generals who had their pensions fixed based on increments they had earned in their pay-scale and not on the principle of minimum pay for their rank in the pay-band.

Now assuming there is some basis to this analysis, we need to go back to the tables and fitments of SAI 2/S/08 as amended. To simplify and to illustrate the matter, on a purely hypothetical basis, a table can be derived from the SAI ibid and its subsequent amendments for consideration as follows :

TABLE RELEVANT TO A PRE 6 CPC LT COL RETIREE

  

5 CPC Pay As Laid Down In Amendment To 2/S/2008	6 CPC Basic Pay Corresponding To 5 CPC Pay Scale As Laid Down In Amendment To SAI 2/S/2008	6 CPC MSP	6 CPC Grade Pay	Total Revised Pay	50% Of Total Revised Pay	The Number Of Years Required Currently To Reach This Increment Stage
13500	38530	6000	8000	52530	26265	13
13900	38530	6000	8000	52530	26265	14
14300	39690	6000	8000	53690	26845	15
14700	39690	6000	8000	53690	26845	16
15100	40890	6000	8000	54890	27445	17
15500	40890	6000	8000	54890	27445	18
15900	42120	6000	8000	56120	28060	19
16300	42120	6000	8000	56120	28060	20
16700	43390	6000	8000	57390	28695	21
17100	43390	6000	8000	57390	28695	22
17500	44700	6000	8000	58700	29350	23
17900	44700	6000	8000	58700	29350	24
18300	46050	6000	8000	60050	30025	25
						26
						27
						28
						29
						30
						31
						32

Granted, the corresponding 6 CPC basic pay column does not tally with the 6 CPC pay-band 4 starting at 37400/-, but that is how the pension for Lt Col rank was re-fixed at 26265/- as against the previously fixed 25700/- based on PB-4. Pay during 5 CPC, as actually earned, would logically have to be the basis for arriving at equivalent pensions for 6 CPC if at all the arguments for basing pensions on increments earned during 5 CPC are tenable.

In the case of a Lt Col retiree, of course, it would not be too hard to arrive at this hypothetical, re-fixed pension based on increments gained during 5 CPC. All he would have to do would be to take out his DND statement issued on the revision caused by the rank-pay case matter. From there, it would be a simple matter to read the revised pension as shown in the column titled "50% Of Total Revised Pay". A Lt Col who had earned increments in the DND statement so as to reach a basic pay of 17900/- would then, hypothetically, be eligible for a 6 CPC pension of Rs.29350/- and not the Rs.26265/- as fixed from 01 Jan 2006.

But, an important consideration arises here. Would basing the 6 CPC pensions based on increments earned during 5 CPC amount to OROP having been granted for all ex-servicemen during 6 CPC? It would certainly appear to be a case of full parity rather than a modified parity necessitated by the parallel, if one does exist, and that is a very big if, in the eumored litigation involving retirees in the rank of Maj Gen.

However, by having a similar increment based pension for pre 7 CPC retirees and terming it as OROP for all, the 7 CPC recommendations do confound the matter somewhat.

In the above example, true OROP would have resulted if the pension had been fixed for the Lt Col retiring in say 2003 at DND basic of 17900/- if his pension had been fixed equal to pension of another Lt Col with as many years of service retiring in say July 2006. This pension would have been a lot higher than the one based on increments earned during 5 CPC.

The last column in the table indicates how many years would be required during 2006 and later to reach the equivalent 6 CPC basic that a 5 CPC retiree would have retired at. In most cases there would be a significant difference between the years of service put in by a pre 01 Jan 2006 retiree to be at the same level of equivalent 6 CPC basic pay.

That appears to indicate that the manner of OROP based on increments as suggested by 7 CPC may not be the real OROP as we understand it. It also appears to suggest that the logic of obtaining an increment based re-fixation of 6 CPC pensions for 5 CPC and earlier retirees may not be that far fetched.

Increments Earned, Pensions And OROP

In the matter of VI CPC pensions fixed for pre 01 Jan 2006 retirees, circular 397 issued by PCDA states at para 6.1, "The consolidation of pension will further be subject to the provision that the consolidated pension, in no case shall be lower than 50% of the minimum of the pay in the pay band plus the grade pay, military service pay (MSP) and ‘X’ Group pay (where applicable) introduced from 01.01.2006 corresponding to the pre revised scale from which the pensioner had retired/discharged for 33 years qualifying service and for lesser qualifying service (including admissible weightage) it will be proportionately reduced".

This circular was amended vide Circular 500 subsequently to clarify, "...the minimum guaranteed pension and ordinary family pension in respect of Pre-2006 Commissioned officers, pensioners/ family pensioners has been determined as 50% (fifty) and 30% (thirty) percent respectively, of the pay in the pay band corresponding to minimum of prerevised pay scale as indicated under fitment tables annexed with SAI 2/S/2008 as amended and equivalent instructions for Navy & Air Force and SAI 4/S/2008, plus Grade pay corresponding to the pre-revised scale from which the pensioner had retired/ discharged/invalided out/died including Military Service Pay, wherever applicable. date of fixation of pensions (01 Jan 2006 as against the original..."

or as the accompanying MOD letter had stated,

"..minimum of the fitment table for the rank in the revised pay band as indicated under fitment tables annexed with SAI 2/S/2008 as amended and equivalent instructions for navy and Air Force and SAI 4/S/2008 plus the Grade pay corresponding to the pre-revised scale from which the pensioner had retired ...... including Military Service Pay..... ".

The Circular had fixed this minimum guaranteed pension wef 24 Sep 2012.

The date was subsequently changed to 01 Jan 2006 very recently.

In this season of talk of increments based pension fixation, fuelled by the new matrix put out by 7 CPC, it has come to light on the web that some stalwarts seem to suggest that fixation of the minimum guaranteed pension wef 01 Jan 2006 needs to take into account the increments actually earned in the "pre-revised pay-scales" by pre 01 Jan 2006 retirees. It is understood this is based on some judicial ruling applicable to retirees with Maj Gen rank in which increments earned are said to have been made a basis for determining the pensions of these affected Officers.

As details have not been shared, it can not be said with any certainty whether or not the context of litigation involving the Maj Gen retirees would also apply to other pensioners.

But it is an interesting development.

There would be a need to study where in the fitment tables would a particular pensioner stand after considering the increments he had earned in the pre-revised scale (pre 01 Jan 2006 pay-scale).

Then there would be the calculation and payment of arrears from 01 jan 2006.

But would that not affect the calculation methodology for OROP? It may become necessary for OROP calculation to be based on number of increments required to reach a certain number of years of service for a pay-band for a specific rank rather than on the "average of minimum and maximum pension in 2013", whatever that means.

Pay-Bands, Tables And Fitments For OROP

In the face of unknowns involved in a matter such as OROP, it may be a more prudent approach to first try and identify the type of variables one could come across rather than to attempt assigning values to those variables.

There is no need to be troubled here with the notion that for arriving at a OROP fixation one would have to apply some esoteric principle that an Operations Research boffin might have conjured up on one of his more productive days.

At the same time, I have always felt that before undertaking the churning out of tables for OROP estimates, with jubilant cries of "Viva Excel!", I might as well put in some system for validating guesstimates and opinions. Any time I had posted a table on what OROP or the rank pay revisions could involve, I tried to take pains to underline the fact that figures quoted were hypothetical, a means to illustrate a point, subject to validation and/or not for universal application.

However, some extremely useful information has recently been made available on the Aerial View blog by way of painstakingly compiled tables on what OROP could be, based on pay-bands applicable post 01 January 2006. In face of the marked silence from the Government and ESM associations on the subject, these tables are like a shining beacon, pointing towards where the reality would probably lie.

For the purpose of appreciating a need for validation, the following points might be of use

• OROP is at a different plane altogether when compared to the modified parity principle of a pre/post CPC fixation of pensions for pre CPC retirees.

• In the context of VI CPC, it needs to be remembered that fitments in the MOD letter dated 2008, and its amendments, centered around the concept of modified parity. That will not apply for OROP.

• Circular 500 and its precursors were all geared towards the "minimum of pay for rank in pay-band" principle. OROP is an entirely different paradigm.

• The concept of OROP can be seriously undermined if the process of calculation gets mired in the old concept of fitment tables that applied to pre/post VI CPC pay fixation.

• OROP seeks total parity of pensions of older retirees with pensions of present retirees (for the time being, those retiring in 2013).

As an example, to be absolutely certain of what is implied in a table, which for the purpose of suggesting the OROP pension of a Major with QS of 13 years, states the pay of a Major is 29820/- at QS of 13 years, it needs to be clearly understood that a per the table the pay would be 29820/- in 2019 for a Major commissioned on 01 Jan 2006. 

As to what would the pay of a Maj with a QS of 13 years be in base year 2013, the answer would be based on a host of other parameters such as fixation of his pay from Jan 2006 and date of actual promotion, among others. Again, the very fact that QS of 13 years would not result in a pension, goes to show the hypothetical nature of such an estimate.

For that exact reason, for OROP, we need to have validation of estimates in pay-band tables against actual pay and pension data as applicable to personnel retiring in 2013.  For such validation, the focus should also be on actual pay/pension data as applicable in base year 2013. If there is no actual average pension data for 2013 in respect of a certain rank cum years-of-service combination, then pay actually being drawn in base year 2013 by serving personnel with that rank cum years-of-service combination can be a basis for arriving at the "potential average pension".

Sometimes, a blank table does help to point out what the missing variable values are and how these can be obtained. An absence of actual figures may not exactly seek to reinforce the "Less Is More" principle, but it can help in a clearer understanding of what the issues are or could be. In a previous blog-post I had sought to suggest such an approach. Now, in order to include the pay-band estimates currently available, I have updated the table-format in that blog-post as follows:

(By hovering the cursor on the table format it can be viewed with magnification)