Models For A Probable Contour Of The OROP Format

{Edit: The contents of this blog post have been cut and pasted on this Yahoo! Group Post of a group located at Bangalore without my permission or attribution to me and without any link back to this post. This manner of reproduction is in infringement of my rights. Could a reader in touch with the group induce them to post this material with due link back and attribution? Thanks and regards}

It is not that the issue of Pension Parity on the lines of OROP has not been attempted to be addressed by CPCs in the past. Everyone affected would already be aware that pensions of pre VI CPC retirees are fixed at 50% of pay in the revised pay-band. This is modified parity of the kind V CPC had introduced for post 01 Jan 86 retirees whilst giving full parity to pre 1986 retirees.

This can lead to the query whether the Govt is envisaging some form of "full" parity in the case of armed forces under the OROP scheme.

How did "full" parity work after V CPC? It brought the notional pay of pre 1986 retirees at the same level as those serving as on 01 Jan 86. Therefore pre and post 01 Jan 86 retirees were at the "same level" (not including the post 01 Jan 96 retirees). At the same time, the pre and post 01 Jan 96 retirees had modified parity, the pre 01 Jan 96 retirees getting, in words of the CPC, "consolidated pension (shall) be not less than 50% of the minimum pay of the post as revised by V CPC, held by the pensioner at the time of retirement".

In the context of OROP, one can ask whether the same sort of idea with "variations upon a theme" is now sought to be implemented as OROP.

This essentially means examining the nature of OROP. Is it intended to be an inter CPC exercise or whether it will operate intra-CPC as well?

As an example, Circular 500 fixes the pension of a pre VI CPC retiree in the rank of Colonel and with 20 years of service at Rs. 22742/- on the "minimum pay in revised pay band" principle. If OROP is purely inter CPC in nature, it could imply that full parity would be restored on a similar fixed-pension basis for pre VI CPC retirees.

Such a full parity working on only "inter-CPC-retirees" basis could mean one of several things:

* Pension of a pre 01 Jan 2006 Col retiree with 20 years of service would be a fixed amount equal to the pension of a Col retiring on 31 Jan 2006 with 20 years of service.

OR

* Pension of a pre 01 Jan 2006 Col retiree with 20 years of service would be a fixed amount equal to the pension of a Col with 20 years of service as given in the table based on post VI CPC  pay-band viz., 31755/-

OR

* Pension of a pre 01 Jan 2006 Col retiree with 20 years of service would not be a fixed amount but would be periodically adjusted with the "current" (at the time of periodic adjustment) pension of a Col retiree with 20 years of service.

In such a (pre-only) format, the pensions of post CPC retirees would be calculated as per the current norms and would not be changed as per the process outlined above.

But the intra CPC implementation {Edit : Ideally, this should be called an "Inter-cum-Intra CPC parity} would essentially mean that all pensions as on "the periodic adjustment date" must be equal for all current and past retirees in the same rank and with the same pension service.

In the periodic adjustment model, the pensions may or may not be as per the table I have provided a link to above. It is again repeated, for the benefit of those with a tendency to gravitate towards cognitive impressions of colored columns of a table rather than to the underlying idea in drawing up of a chart or table, the table only indicates the pension of a Col with 20 years of service would have been 31755/- if he'd picked up the Col rank with 15 years of service as on 01 Jan 2006 and retired 5 years later  as on 31 Jan 2011 with 20 years of service. For all other cases, the post VI CPC pensions of a post VI CPC Col retiree with 20 years of service would be fixed based on the level at which his basic pay was fixed as on 01 Jan 2006. There would be variations.

This is merely to underline the impression that while it ought to be of interest to everyone to attempt to draw some rough contours of the form OROP might take, it would be rash to see an "illustrative" table and jump to erroneous conclusions.

Extending the OROP Estimations To Pre VI CPC Colonel Retirees

It increasingly appears that OROP may not turn out to be a simple issue as far as implementation goes. My personal view gets firmer in my mind that "OROP" is an apt "platform" for obtaining equity and parity in terms of pensionary benefits. But it needs careful thought in devising and then implementing such a parity. Principles need to be kept in mind at the "design stage" itself for minimising anomalies in post implementation phase.

I'd again like to emphasise "minimising" over "eliminating" as it would be unrealistic to assume that unforeseen anomalies would not arise and these, if and when they do appear, would need to be tackled post implementation. But the foreseen ones need to be certainly taken care of prior to implementation of a wide-ranging concept such as OROP.

There have been some fairly extensive on-line attempts to make comprehensive tables for pensions under OROP. To my mind, the basic flaw in approaches I have seen is a tendency to attempt an adaptation of Circular 500. Those sorts of tables are static. Pension once fixed for past (read, pre CPC) retirees at a certain level, stays fixed. The very thrust of OROP would however mean a variation in pensions for previous retirees  in the same rank and with the same length of service. How can there be "One Rank One Pension", for the same length of service, if the "One Pension" does not keep changing to stay at the current level of pension of a current retiree in that rank with the same length of service?

It is to be borne in mind the pension of a current retiree in a specific rank with a certain length of service would be more, on account of increments in pay, as compared to the pension of another, also post CPC, retiree in the same rank with the same length of service who might have retired a year or two previously. So, OROP automatically implies that even pensions of past retirees would need to be incrementally upgraded each time a person retires in the present after receiving an annual increment in pay. How else would pension be "One Pension"?

Having considered the possibility of OROP involving some form of an increment system, perhaps it is time to rationalise some of the doubts that have arisen over the multitude of tables and spread-sheets that have sprung up. I have now attached a table as it pertains to the rank of Colonel. To clarify, the COS re-fixed the pension of pre VI-CPC Col retirees at Rs. 27795/- based on minimum of pay in post VI CPC pay-band. A reverse calculation would then appear to suggest that the minimum pay of Col, post VI CPC, in PB IV was Rs. 40890/-. Based on this, a table can be drawn up.

The table does not imply that a Colonel retiring, after 01 Jan 2006, at 20 years of service would get Rs. 31755/- as pension. What the table means is that if an Officer gets promoted to Col at 15 years of service as on 01 Jan 2006, 5 years later at a service length of 20 years, he would get a pension of Rs. 31755/- after factoring in the increments in basic pay.

For most cases, the pension of a Col retiring after 01 Jan 2006 would be determined by the level his pay was fixed at as on 01 Jan 2006. For a Col retiring today with a service of, say, 25 years, we'd have to determine at what level his basic pay was fixed as on 01 Jan 2006, 8 years ago, when he had a service of 16 years. Then we'd need to apply increments on the same lines as shown in the table for a person who became Col with 15 years of service as on 01 Jan 2006 with a pay fixation of 40890. The basic of the Col with 16 years of service, the one who will be retiring now with a service of 25 years, would probably be higher.

So, whatever the Col with 25 years of service gets as pension after retiring on 31 March, so must all the previous Colonels who retired previously also with 25 years of service. Now, if that is not OROP, it is high time a clarification was obtained from the Govt as to what it really is.

Feedback is invited in respect of the table and the contents of this blog post.

{Edit 1}: The table is now embedded. For a larger size view please click on the hyperlink in the the text of the blog post above.

{Edit 2}: For a fuller context, reference may please be made to previous blog-posts by following the hyperlink.

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.