OROP · pension

Nipping 7 CPC Anomalies In The Bud

This blog post is intended to share some observations, as gleaned from discussions in online fora, on the lack of clarity observed in recommendations of the seventh pay commission in relation to pensions of pre 01 January 2016 retirees of the defence services.

The relevant recommendations of 7 CPC, duly highlighted for reference, can be down-loaded with this link .

The following questions arise from those highlighted recommendations :

      • Para 10.2.87 (i) of the recommendations mentions “Pay Band and Grade Pay” as a means of first  “fixing” at minimum level in the 7 CPC matrix for calculating notional pay of pre 01 Jan 2016 defence retirees. But retirees of pre 01 Jan 2006 era only had a pay-scale and no grade pay to identify with the “levels” of the 7 CPC matrix. How will pre 01 Jan 2006 retirees fix their notional pay in the matrix as Grade Pay and Pay-Bands were introduced only after 01 Jan 2006 by VI CPC?
      • Then, the same para goes on to recommend that a retiree should add the number of increments “earned” in that level for arriving at the notional pay. Does that mean the increments actually granted or the number of increments from the last pay drawn counting back to the lowest stage of the pay-scale in which a pre 01 Jan 2006 retiree retired?
      • Para 10.2.86 (ii) of the 7 CPC recommendations provides an alternate calculation, viz., of multiplying by 2.57 the pension fixed at time of implementation of VI CPC. But pensioners are already drawing OROP pension with DR at 125%. Thus 2.25 X OROP pension presently being drawn is likely to be higher than the 2.57 X VI CPC pension recommended by 7 CPC. Does that mean 7 CPC will provide a negligible increase, if any, in pensions of defence retirees?
    • To take an example, if five increments plus two stagnation increments actually earned by a Lt Col (or equivalent) who retired with, say, 28 to 30 years of service in August 2004 are put in the matrix at “index” of 7, his notional pay will correspond to a Lt Col of post 01 Jan 2006/01 Jan 2016 era with 13+7=20 years of service i.e. 10 years less than the 2004 Lt Col. Even if the Aug 2004 Lt Col retiree is eligible to count total increments on the pay-scale of 13500-400-17100 down from his last pay (with stagnation increments) of 17900/-, the number of increments comes to 12. If that is put in the matrix, in level 12-A, the Lt Col’s notional pay would be fixed at index 12 which corresponds to a current Lt Col with 13+12=25 years of service, which will be about 4 to 5 years less than the actual service put in by the 2004 retiree. Does the 7 CPC intend to do away with the “equal service” clause of OROP in this fashion?

It may be fitting for services HQs and veterans associations to take up these specific issues for rationalization.

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4 thoughts on “Nipping 7 CPC Anomalies In The Bud

  1. Counting increments in particular level/rank seems impracticable for the older lot. Moreover, after implementation of OROP, this proposal/recommendation may not be beneficial in some cases. Alternate proposal is simple and beneficial in majority of cases. In this, new basic pension after implementation of OROP into 2.57 would be easier to implement and beneficial as well. For instance lt col top of the table scale ie. 34765*2.57=89346(new pension). After OROP, one with top scale would get pension from Jan 2016- 34765*2.25=78222.

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    1. The 2.57 multiplication would yield pension of a current Officer with much less service as has been pointed out in the blog-post, even if the OROP pension is multiplied by 2.57. Besides, there is no guarantee anyone is going to use the 2.57 x OROP formula. They are talking of 2.57X(VI CPC pension). So it would be better not to jump to conclusions.

      The only sensible solution in the case of Officers is to use the increment method as proposed by 7 CPC, but ensuring that first pensions of retirees of the period 01 Jan 2006 to 31 December 2015 are calculated in this manner and then OROP criterion of “same rank and equal service” is applied in the case of pre 01 Jan 2006 veteran officers.

      So, it may well be prudent not to shoot ourselves in our collective foot by opting for what we may be misled into believing as “simple and beneficial”.

      A straightforward modification could also make 7 CPC recommendations and OROP to be in harmony. I have read this elsewhere but it seems a logical solution. Instead of using the number of increments actually earned in pay-scale / pay-band at time of retiring, the number of increments should be those required after 01 Jan 2006 ( it would be the same for those serving after 01 Jan 2016 as well) for an Officer to attain the same QS as the pre 01 Jan 2006 retiree.

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    2. @Dasila : My good Sir, where did you get that notion of 2.57 multiplication being “beneficial”? You have mentioned “top of the scale” pension of 89346/- for older, pre January 2006, Lt Col retiree which, you should realize, would be given, if your “simple” recommendation is followed, for a service of 32 years and above put in by the older retiree. It will be equal to the theoretical pension of a Lt Col retiring after 01 January 2016 with just 25 or 26 years of service.

      Instead of asking for pension of a Col(TS) retiring with 32 years of service and above after January 2016 for an older pre 2006 Lt Col veteran with equal service , you are trying to limit pensions even in the lower Lt Col pay-band or level of 7 CPC matrix.

      Kindly have a look at my table by following this link.

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