OROP · pension

Co-Relating OROP With VII CPC Notional Pay

After issue of the recent press-note on the subject, total uncertainty prevails over whether VII CPC pensions will be meaningfully re-fixed for armed forces veterans.

There are some issues that need to be considered before proceeding with even guess-work on the matter:

  • Would the VII CPC Pension re-fixation take place by multiplying the Circular 555 OROP pension with higher multiplication factors now applicable to some levels (eg 2.67x in-place of 2.57x for Lt Col)?
  • Would the OROP fixed vide Circular 555 have to be first converted to an equivalent notional VI CPC Pay which then would be multiplied by the new multiplication factor and the nearest higher VII CPC pay in the “revised matrix” then be selected to establish a notional VII CPC pay for working out the revised VII CPC pension?

Conjecture and guess-work point towards a few alternatives, tabulated here for the rank of Lt Col, for feedback and views:

Estimates Of Refixation Of VII CPS Pensions As Co-related To OROP : Pre 2016 Lt Col Retirees
Q.S. OROP Vide Circular 555 Notional VI CPC Pay Equivalent To OROP Fixed Vide Circular 555 2.67x(Notional VI CPC Pay+GP) Nearest Estimated 2.67x Multiplier Based VII CPC Matrix pay VII CPC Pension As presently Applicable i.e. Rounded OROPx2.57 Estimated Revised VII CPC Pension Based On Estimated Notional Pay Corresponding To Notional Pay Estimated Revised VII CPC Pension Based On Circular 555 OROP x 2.67
20 31305 48610 151148.7 153500 80454 84500 83585
20.5 31305 48610 151148.7 153500 80454 84500 83585
21 31713 49426 153327.42 153500 81503 84500 84674
21.5 31713 49426 153327.42 153500 81503 84500 84674
22 32428 50856 157145.52 158100 83340 86800 86583
22.5 32428 50856 157145.52 158100 83340 86800 86583
23 32428 50856 157145.52 158100 83340 86800 86583
23.5 32428 50856 157145.52 158100 83340 86800 86583
24 32428 50856 157145.52 158100 83340 86800 86583
24.5 32428 50856 157145.52 158100 83340 86800 86583
25 32775 51550 158998.5 162800 84232 89150 87510
25.5 32813 51626 159201.42 162800 84330 89150 87611
26 32813 51626 159201.42 162800 84330 89150 87611
26.5 33225 52450 161401.5 162800 85389 89150 88711
27 33225 52450 161401.5 162800 85389 89150 88711
27.5 33225 52450 161401.5 162800 85389 89150 88711
28 33225 52450 161401.5 162800 85389 89150 88711
28.5 33225 52450 161401.5 162800 85389 89150 88711
29 33225 52450 161401.5 162800 85389 89150 88711
29.5 33918 53836 165102.12 167700 87170 91600 90562
30 33918 53836 165102.12 167700 87170 91600 90562
30.5 33925 53850 165139.5 167700 87188 91600 90580
31 34303 54606 167158.02 172700 88159 94100 91590
31.5 34303 54606 167158.02 172700 88159 94100 91590
32 34765 55530 169625.1 172700 89347 94100 92823
32.5 34765 55530 169625.1 172700 89347 94100 92823
33 and above 34765 55530 169625.1 172700 89347 94100 92823

To be absolutely clear, the above approximations come nowhere near what a proper fixation ought to be. Firstly, the OROP used as a basis is itself in need of rationalization. The OMJC recommendations on OROP anomalies are not yet in the public domain and the implementation status or timeline are not known. Also, till such time the matter of linking up QS of pre 2006, especially pre Dec2004, retirees with levels and index numbers of VII CPC matrix is resolved, the “inter temporal equity” principle enunciated in recommendations of VII CPC would not have been complied with. Though the figures in that earlier blog post were based on unmodified IOR of 2.57x, the contents still serve to illustrate the issues involved.

A linked and important issue is that for level 12A, parity for QS more than 26 years actually needs to be based on Level 13 applicable to Col(TS).

For a purely speculative guesswork based estimate, a view of the expected modification to Levels 12A and 13 of the matrix with IOR of 2.67 in-place of 2.57 and showing the sought-after 26 years parity point for Lt Col and Col(TS) pensions, a table may be viewed with this link for providing feedback, corrections and views.

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6 thoughts on “Co-Relating OROP With VII CPC Notional Pay

  1. I think, in the Table provided by you , calculation of Notional Pay has not been done correctly. In 6th CPC all Lt Col were given Rs26265.00 as pension , irrespective of seniority in that rank. Taking that as starting point, if one works out Notional Pay of a Lt Col who had earned 11 increments, his Notional pay & pension based on the Notional pay will be as follows:- Pay as on 01-01-2006=(26265X2)-6000(rank pay)=46530.00. Notional Pay after 11 increments=46530.00X1.03X1.03 ( 11 times- for 11 increments @3% per annum)) =Rs64409.00. Add MSP of 15,500.00 =Rs79909.00. Hence pay as on 31 Dec 2015 will 79909X2.57=2,05,366.00 and corresponding pension =Rs1,02,683.00. Am I correct?

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    1. Dear Colonel, You are referring to pension corresponding to the “bottom of pay” in VI CPC pay-band for the rank.{Edit: The VI CPC pension of 26265 corresponded to minimum of pay of rank in PB-4 viz.,38530/-. 0.5x(38530+8000+6000) = 26265!!}

      To my mind the OM does not provide for that pay to be taken as the notional VI CPC pay for pre 2006 retirees. In terms of the OM applicable to civilian retirees, the notional VI CPC pay would be based on the last pay drawn and then converted to notional VI CPC pay following the formula laid down by VI CPC.

      In our case, for pre 2006 retirees the equivalent process would have been to take the VI CPC pay shown as equivalent to the last V CPC pay drawn, as laid down in tables of SAI 2/S/08 and the amendment issued (for including Lt Col in PB-4), and use it as the notional VI CPC pay. For example, the V CPC basic of 17990/- was tabulated as equal to the VI CPC basic of 44700/- as per the table for PB-4. 44700/- + 8000/- (GP) multiplied by 2.67, or the nearest higher pay in the now to be modified Level 12A of the matrix, would have been the notional VII CPC Basic Pay (with modified IOR). One could then add MSP of 15500/- to get the notional VII CPC pensionable pay.

      However, as OROP was put in place from Jul 2014, it is safe to assume that one possible way to arrive at a notional VI CPC pay would be basing it on the one corresponding to OROP fixed vide Circular 555.

      Also, the MSP you have added does not apply to VI CPC. It is the VII CPC MSP.

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  2. Dear Sir,

    I think IOR 2.67 is not applicable for pensioners. Lets wait for the revised pension letter for armed forces. Most likely it would same as for the central govt emp.

    Rgds

    Dasila

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    1. Of course 2.67, as you put it, “is not applicable for pensioners”. But to work out notional pay in the VII CPC matrix it would be required, as in the case of civilian pensioners. How else is notional pay for VII CPC going to be calculated?

      Again, everyone is indeed waiting for detailed instructions. That is always understood when one speculates on issues which are not clear in the present.

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      1. Hope they start from OROP base. For example, Lt Col > 32.5 yrs service highest fig is 34765. One possible method of working out notional pay- 34765-3000(MSP)=31765 *2(pension 50%)=63520(Notional pay drawn in 2013). 63520*2.57=163272. Look up this fig in def pay matrix, it is below 161500 and above 166300(L12A). Take higher of the two ie. 166300 +15500)(MSP)=181800/2=90900-89347(34765*2.57)=1553 incr.

        Rgds
        Dasila

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      2. VI CPC pension was =0.5*(basic+grade pay+msp). For OROP of 34765, the notional VI CPC pay would not be 63520/- contrary to what you have stated. Please read the table in the blog post.

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