Further Iterations On The OROP Pension Estimates : Lt Col In PB IV

On the basis of a comment on the previous blog-post, it became necessary to consider the first set of corrections to the OROP estimates.

To be absolutely forthright, due to a lack of concrete data, one has to base estimates on premises. In the present case there is the very important backdrop of the "Minimum Of Pay In Pay Band" vs "Minimum Of Pay Band" issue. The matter was only partially resolved based on the recommendations of Committee of Secretaries and is even now the subject of litigation for a retrospective implementation with effect from 01 January 2006.

But as the pension for pre VI CPC Lt Col retirees in PB IV was refixed at Rs 26265/- in place of 25700/-, one can make a quick reverse calculation and come to the conclusion that the minimum pay for a Lt Col in PB IV post VI CPC is Rs. 38530/-. From that conclusion, sound or otherwise, one can proceed to calculate increments, round these off to the next higher multiple of 10 and arrive at a fresh set of figures for basic pension applicable to a pre VI CPC Lt Col retiree.

A table, after what one could call the application of "Minimum Of Pay In Pay Band" correction, can be prepared. {EDIT: Care must be taken to keep in view that the same basic pension would not apply to everyone with the same no. of years of service. Basic Pay in pay band would vary as per fixation with effect from 01 January 2006.} (For a larger size view, please click on the thumbnail below):

BENCHMARKS FOR A GENUINE OROP PARADIGM

Whatever the catalysts or driving forces be in the selection, by the Government, of the present point in time for announcing the acceptance of principle of OROP, for retirees of armed forces, it remains to be seen how this would translate into reality at the ground level.

Skepticism has been voiced, in the media and online, as to whether there would be shortfalls in the delivery as against the anticipated outcome. This leads us right back to the question at the heart of the matter. What is the "anticipated outcome"? Has any clarity emerged in the stated positions of the advocates of OROP since the times I had attempted to outline what OROP "could" imply in this blog post?

As far as statements go, the Hon'ble Finance Minister spoke of bridging gaps in pensions. Spokespersons of the political party in power have defined it as equal pension for the same length of service for the same rank regardless of the point of time when an ex-serviceman retired. This, barring the understandable doubts arising from past experiences, could be construed as full pension parity based on the rank at retirement and length of service and not modified parity.

Such an OROP would be expected to fully bridge the gap, with effect from 01 April 2014, between the pension of a pre VI CPC retiree in rank "x" with reckonable service "y" and the pension of a post VI CPC retiree also in rank "x" and length of service "y". Presently, the pre VI CPC retiree gets pension applicable to the length of service corresponding to the minimum of the pay band of rank "x"  post VI CPC.

Now, even if such a happy state came to be realized, it would not completely address the old issues that have been raised off and on. It may help to create a brief list here that could be rationalized, enlarged and/or modified depending on feedback received. The areas that might require fine-tuning are:

*What is the concept of "One Rank"? I've stated in different words elsewhere and have read it on others' blog posts and comments, that "Rank" is a variable, not a constant. Yesterday's rank "x", in the above example, may not be the same rank "x" today in terms of the time-frame required to attain it automatically on the basis of length of service. The clearest recent example is the pre and post VI cpc ranks of Lt Col and Col(TS), respectively, applicable at retirement for pension calculation after an identical service of 26 years, in the same cadre and with the same commission. My old blog post could apply to discrepancies in pensions of two retirees even with OROP.

*Does OROP compensate for the truncation of careers in armed forces as compared to civilian employees? Even with OROP, would the pension, between the time of retirement of a armed forces retiree and the time an equivalent civilian retires, equal the pay and allowances of the latter in the same period? Equally importantly, would the OROP pension of the same armed forces retiree equal the pension of the "equivalent" civilian employee at the time the latter retires several years after the armed forces retiree?

*Does OROP compromise the case for NFFU for the armed forces on the same lines as given to civilians?

Clearly, there would be no simple answers to these questions as well as to others that might arise. But to address the immediate ambiguity as to whether OROP would be full, partial, modified, semi-modified or whatever, we could at least share in clear terms what "full OROP" ought to be.

Let us take the case of a specific rank. For pull parity of pension for a Lt Col who retired before 01 Jan 2006, his pension should equal the pension as per the pay band applicable to a Lt Col serving and retiring beyond 01 Jan 2006 as follows. Please note these figures are subject to verification and any corrections or suggestions for modifications would be welcome.

Guidance provided towards ascertaining pay-band details in the Aerial View Blog is gratefully acknowledged in the making of this table. (For a larger view, please click on the thumbnail below)

{Edit} Please view an update here.

EXTENDING THE WG CDR VS TOMAR (RETD) LITIGATION TO OTHER ISSUES

{Edit: A brief chronology of the matter has been added at the end of the blog post}

Issues do not exist in water-tight compartments, nor can principles that apply in one case be automatically extended by rule of thumb to another.

But recent blog-posts connected with the issue of OROP opened up a train of thought based on related judgements and judicial pronouncements. But then, trains of thought can be runaway trains, going downhill at break-neck speed , inviting a derailment at every curve. There is nothing like the blogosphere for obtaining requisite braking in the shape of comments and counter-views to keep the train on track.

The case of Wg Cdr VS Tomar vs UOI led to this train of thought getting onto a branch line. Para 25 of judgement of Hon'ble Supreme Court in UOI Vs SR Dhingra and Ors (2008) 2 SCC 209, as quoted in AFT judgement on OA 106/2009, would seem to bar an employer from fixing a retrospective date of implementation of a benefit arbitrarily. Now, though the AFT judgement relates to parity of the pro-rata clause related to pensionary benefits for pre and post VI CPC retirees, it could have wider ramifications.

A lay person's appreciation could be the same principle, as enunciated in the judgement, applies to the implementation of phase I recommendations of AV Singh Committee. It needs to be emphasized here, the application would seem to extend to the entire implementation of phase-I recommendations of AV Singh Committee and not in respect of just the pensionary aspects.

Let us consider this:

*The implementation of phase-I recommendations of AV Singh Committee was retrospective.

*The Govt fixed the retrospective date as 16 Dec 2004.

*This retrospective date divided a homogeneous group into two not only for the benefit of pensions but also in respect of benefits of faster promotions AND consequently higher pay and allowances of those who were in service.

This needs to be considered independently of the issue of parity of pensions of pre AVS-I Lt Col/post AVS-I Col(TS) which I had sought to highlight earlier.( <—- Click link to view )

A simple example would be a Captain who had 6 years of service on 01 January 2002. He picked up the promotion to rank of Major wef 16 Dec 2004 when the AVS-I recommendations were implemented in 2005 retrospectively. Whereas another Officer who completed the same service of 6 years on 30 Dec 2004, immediately received the benefit of the promotion, including the higher pay and allowances, also retrospectively. The former would appear to have a case for arrears of a kind different from the Rank Pay arrears that we're all so focused on.

Now just consider the arrears that could arise for all who continued in service, forgetting for the time being the pensionary issue related to Lt Col/Col(TS). 

Depending on a legally correct retrospective date of implementation, Officers, both serving and retired, could be entitled to arrears of pay and allowances on account of promotions and increments extending back several years from Dec 2004.

This matter needs to be examined in relation to my previous blog post wherein it had been suggested ( <—— Click link to view ) there is a strong possibility

of a homogeneous group having been sub-divided in two, though the word "set" had been used at that time in place of "homogeneous group". The homogeneous group would have been the one that required to receive the benefits the Govt. itself had decided were required to be given when it formed the AV Singh Committee.

So what should have been the legally correct retrospective date for implementing phase-I recommendations of AV Singh Committee? It would have to be a date that defined a homogeneous group for the purpose of receiving benefits that the Govt intended to bestow.

*It could have been 01 Jan 96 for Officers in service as on that date as it was V CPC which first postulated the requirement of ACP which the AVS-I recommendations were an extension of, even though it had been represented at an AFT that there was no nexus.

*It could have been the date on which the terms of reference were given to the Committee.

*It could have been the date the Committee finalised it's recommendations.

*It could have been the date on which the Govt accepted "in-principle" the recommendations of the Committee.

But the concepts of arbitrariness and sub-division of a homogeneous group seem to apply in retrospective selection of 16 Dec 2004 as the date of implementation for passing on benefits of phase-I recommendations of AV Singh Committee.

Whether or not there are sufficient grounds for individuals and/or groups to contemplate further investigative exploration, followed by attempts at a resolution of the matter, would depend on guided collective reasoning being applied to the subject.

{Edit 1} : This issue re-surfaces every now and then, as it did about four months ago.(<——- Click link to view )
{Edit 2} : In order to fully comprehend the manner in which the sub-division of a homogeneous group occurred by selection of the implementation date, here is a brief time line, each date being a point in time where a case exists for a sub-division having taken place, resulting in discrimination:

*Jul 2001 : AV Singh Committee ordered.
*Sometime in July 2002 : Committee recommendations submitted to Govt.
*Sometime in 2003: Govt announced acceptance "in principle" of recommendations.
*December 2004: Govt. Announced acceptance of recommendations.
*March 2015: Implementation notified retrospectively from 16 Dec 2004.

A news item from the era gives a brief outline of the chronology:    

The Continuing Debate Over The IV CPC Pay-Scale

Calculations of arrears of pay on account of the IV CPC rank-pay issue have been, mostly, completed by the organisations responsible for disbursement of pay. The arrears have started trickling into the bank accounts of veterans. But questions and doubts remain about the correctness of the calculations done and the manner in which the judgement of the Hon'ble Supreme Court was interpreted by the government.

 

The queries heard most often are:

• How will the judgement affect those who were not in service as on 01 Jan 86 and joined later?
• Will the judgement have any bearing on pensions of those who retired before 01 Jan 86?
• How will the basic pay be affected in the case of those Officers who got promoted to the rank of Captain after 01 Jan 86?

There is a common basis for such queries to have arisen. Paras 6, 7 and 8 of the Govt. of India letter dated 27th December 2012 form the very foundation of  these issues. The letter mentions only SAI 1/s/87 and is about refixation, and only refixation, of basic pay on 01 Jan 86, based on an outline, as included in the letter, of  the interpretation by the Govt of the judgement.

 

Serving officers and veterans need to look beyond the SAI and pose questions about the running pay scale introduced at the time of IV CPC. It is a classic chicken and egg question. Was the payscale, with its rank stages, based on the manner of calculation of emoluments or were the calculated emoluments fixed into the running pay-scale, the latter having come into existence by the decree of some higher power that governs our universe?

 

The detailed report of IV CPC would record how the running pay-scale was established. A couple of direct queries could begin to offer some clarity:

• How is it that as per the calculation done for a Maj {as cited in the PCDA(O) example}, the revised emoluments came to 3555/- but the starting stage for the rank of Maj was fixed at 3400/- in the pay-scale?
• What was the basis for defining the pay-scale and determing the rank stages? Which part, chapter and para of the IV CPC report records the basis of formulation of this pay-scale?
• Does the IV CPC report specify exactly how the revised emoluments were to be calculated as on 01 Jan 86? If so, in which part of the report?
• Did the litigation on the matter involve specific arguements for a change in the running pay-scale or did the judgement imply the running pay-scale would have to be altered for "giving" rank pay, retrospectively?
 

In case pensions of pre 01 Jan 86 retirees, basic pay of those commissioned, or promoted to Capt, post 01 Jan 86 are to be revised upwards, there would appear to be a need for a revision of the running pay-scale itself.
 

 

If commonality of principles is a consideration, the same treatment needs to be applied to the pay-scales at the time of V CPC as well. But more important than the issue of pay-scales at the time of V CPC would be a re-look at how a deduction of RP can ever be justified at the time of V CPC when it's deduction at the time of IV CPC has just been reversed by the Govt? But that's a different topic and can be looked at separately.

 

This follows from a previous blog post.    

 

 

 

How The IV CPC Arrears Calculation Measures Up Against Expectations

At the very outset, there is a need to identify the most basic factor in the reasonings put forth on blogs and chat-rolls, over the past couple of years, while anticipating the quantum of arrears due to be paid to armed forces officers, that has caused a 'shortfall' between the 'actual' and 'expected' arrears. The assumption centered on the argument that rank pay was part of basic pay and hence the revised emoluments for Jan 86 were required to be calculated using the formula :

 

Revised Emoluments = Unrevised BP+DA+IR+20% of Unrevised BP
+Rank Pay For Jan 86

 

The train of thought that followed from this assumption, flawed or otherwise, was that after adding the rank pay in this fashion, it had been deducted and the emoluments fixed at the appropriate stage, corresponding to the years of service, in the running pay-scale, in which the rank/years-of-service stages diluted the revised emoluments causing fixations at lower levels.

 

The above assumption certainly appeared logical from the point of view that considered Rank Pay to be part of Basic Pay and which required fixations based on parities vis-a-vis equivalent civilian posts, which in turn required a revision of the running pay-scale itself.
 
A large amount of speculation on these lines was further compounded by the lack of hard facts and information. This was, perhaps, partly due to the fact that the matter continued to be sub-judice till the very end and critical information relating to the litigation was hardly the sort of material that ought to have been put in the public domain.
 
So, it was always necessary to consider the most optimistic and pessimistic scenarios. As an example this lower estimate , made in this Blog on 07 February 2013, coincides almost exactly with Example 3 of Maj C as given in the Calculation Methodology of PCDA(O) Pune.

Similarly, the PCDA(O) Pune methodology meshes with the option illustrated with the green arrow in this blog-post dated 14 September 2013 2012.

The "shortfall" in the same example of Maj C arises only when one looks at the estimate of Rs. 4050/- in place of the now fixed amount of Rs. 3600/- and is caused solely on account of the widely shared assumption as stated in the opening para of this blog post.

The expectation that following the judgement, the IV CPC scale would be amended to establish correct inter-se parities vis-a-vis civilian posts hasve not yet materialised, but the cited error of the lower fixation of Rs. 3400/- in the example of Maj C has been totally corroborated now in the manner PCDA(O) have chosen to make the calculation.

The speculation that enhancements would not be applicable on subsequent promotions have also been upheld in the Example 2 of Capt B in the PCDA(O) methodology for the promotion case marked with an asterisk.

If further litigation or representation are planned, the re-defining of the payscale and method of calculating revised emoluments, at IV CPC and V CPC would perhaps be critical considerations.



 





Guesstimates Of Rank Pay Arrears

Now that the pay disbursement authorities have started implementing their interpretation of the Govt. letter that, in-turn, interpreted the judgement of the Hon'ble Supreme Court on the Rank Pay case, there would be deviations from others' interpretations of the judgement or of the Government interpretations thereof, not to forget, from countless pipe-dreams and wishes of die-hard optimists who must have expected a bonanza of some description.

 

So, till the actual methodology of working out arrears becomes available in the public domain, one can but grope in the dark to snatch some reasonable estimate of what sort of inflows would result.

 

The one thing that appears fairly clear at present from the Govt. letter is that there's a strong possibility the re-working of emoluments would be guided by the following restrictions:

 

• The re-fixation of BP, in the payscale, as on 01 Jan 86 would take place after reversal of the deduction, made at the time of IV CPC, of an amount equal to the rank pay applicable to the rank held by an Officer as on 01 Jan 86 eg the basic pay of a Maj fixed at 3400/- as on 01 Jan 86 could be refixed at Rs. 4050/- wef 01 Jan 86. Or, it might be as low as Rs. 3600/-.

• Subsequent promotions would, probably, not entail a jump in BP equivalent to the rank pay of the next rank, though of course the higher rank pay would be applicable on promotion.
 
• There would be no revision of the deductions of rank pay made at the time of V CPC. However, as the BP for Dec 95 would be higher due to revision of basic as on 01 Jan 86, the BP wef 01 Jan 96 might have to be refixed upwards by an amount equivalent to one increment in the V CPC scales.

However, it is not certain how the disbursement and audit agencies might choose, unless they have already chosen, to further restrict the dues of those affected. Just taking the bare minimal case of the Maj stated above, ideally, the arrears, for just the duration of IV CPC, ought to be on the lines estimated as follows:

 

Original BP Fixed For Maj On 01 Jan 86 By IV CPC	3400.00
Original BP Fixed For Maj For Dec 95 Due Initial Fixation By IV CPC	4650.00
Assumed BP Refixed Vide GOI  Ltr For Maj As On 01 Jan 86	3600.00	4050.00
Assumed Revised BP For Dec 95 Due Implementation Of GOI Ltr	4800.00 4950.00	5100.00
Arrears For BP And DA For IV CPC	43926.00	127137.00
Intt @ 6% For 7 yrs	18448.92	53397.54
If the major in the above example is lucky and/or wishes to be optimistic and assumes upward revision of BP for Dec 95 will result in re-fixation of BP for V CPC, then the following arrears could be “hoped for” as well
Original BP Fixed For Same Maj On 01 Jan 96 By V CPC	13500.00
Assumed BP Refixed Vide GOI  Ltr As On 01 Jan 96	13900.00
Assumed BP Revised As On DOR Due Implementation Of GOI Ltr	17100.00 (without any stagnation increment at end of scale)
V CPC Arrears For BP And DA As On DOR	97926.00 54000/-
Intt @ 6% For 7 yrs	41128.92 22680/-

{Edit: Arrears for V CPC have been amended as the original figures of  97296/- &

  41128.92/- represent the total arrears and intt. for both IV and V CPCs}

One does come across opinions that tend to dwell on the means that might be deployed to "short-change" the affected parties. In that line of reasoning, there may well be an attempt to restrict the enhanced revised BP of IV CPC to a level below the starting stage of the next rank in the IV CPC scale. An example could be that at, or after, the initial refixation on 01 Jan 86, the BP of a Maj would ultimately stagnate at 3800/- till the date he was promoted to Lt Col. In other words, in the example in the table above, the refixed BP of the Major would start at 3800/- and not Rs.4050/- even if the revised calculation yielded the latter figure. The BP would become 3900/- only on the date of promotion to Lt Col. This is a fairly dark and pessimistic view but it does bring us back to those increments vs scale-revision considerations of the past.

A Judgement And It's Implementation

Now that the official act of implementing the judgement of the Hon'ble Supreme Court of India, or an interpretation of the judgement, at any rate, relating to the rank pay issue, has been set in motion through the issue of a Government letter, there are, understandably, expressions of views, in the press and on the blogosphere, as to how the implementation meets or does not meet the letter and spirit of the judgement.

It would be extremely unwise to jump to conclusions and apply a layman's reasoning to an issue that has seen the engagement of some of the soundest and ablest legal minds during the course of a protracted litigation relating to the matter in the highest court of the land. In any case, in the absence of the complete details of arguments and counter-arguments, it's virtually impossible to arrive at a conjecture as to what was prayed for, what was finally granted and how faithful is the implementation to the intent of the judgement.

Of course there are doubts and queries. These grey areas need to be identified and logical analysis applied to ascertain whether there is actually a shortfall and what are the available remedies, if any.

With that aim in mind, the following list could serve as a starting point for clearly documenting the doubts:

*How does the implementation propose to resolve the matter of deduction of rank pay at the time of V CPC?

 **This is relevant in context of that part of the judgement which clearly directs that rank pay be given retrospectively from 01-01-1986? The judgement does not say "give rank pay retrospectively from 01 Jan 86 to 31 Dec 95" or "give rank pay retrospectively from 01 Jan 86 for the IV CPC fixation".

 **It needs to be recalled in this context that at the time of V CPC, for determining emoluments as on    01 Jan 96, the    un-revised basic pay and the old rank pay formed part of the calculation.

 **Shouldn't the emoluments as on 01 Jan 96 have included the new rank pay and not the old rank pay? Let's not forget, at the time of IV CPC the new rank pay as on 01 Jan 86 was to be part of the calculation for revision of emoluments.

 **Then, the calculation for V CPC involved subtracting the new rank pay from the calculated amount. 

 **Thus can we say that rank pay amounting to [(revised rank pay)+{(revised rank pay)-(old rank pay)}] was "not given" at  the time of V CPC and ought now to "be given" in the implementation in context of the judgement?

 **This matter was previously touched upon here.

*How is the issue relating to the payscales proposed to be resolved?

 **How have the rank stages been established for the 'running' payscale of IV CPC without including the element of rank pay?

 **Does the judgement say "give rank pay retrospectively from 01 Jan 86 but do not incorporate it in the payscale"?

  **Wouldn't giving the revised basic, with rank pay added' to a new promotee in ranks of Capt to Brig as on 01 Jan 86, discriminate against subsequent promotees who would get basic pay only applicable to the starting stage of the rank    in the payscale?

 **This issue was previously referred to here.  

There would be issues related to pre 86 retirees, to those who joined after 01 Jan 86. As to how the implementation precisely affect these parties also needs to be carefully evaluated.