Friday, May 19, 2017

The Notional Pay Based VII CPC Pension Formulation : Lt Col And Equivalent Ranks

It is quite possible that theorizing on outcomes, based on bare assumptions, can lead to grossly inaccurate and misleading views on how re-formulation of VII CPC pensions would shape up.

The increment based formulation as recommended by VII CPC, now having been modified to a calculation based on notional pays in successive pay commissions, could resolve a lot of anomalies related to OROP provided it is implemented keeping firmly in view how OROP and the VII CPC matrix need to form part of a whole.

The scope of this blog post is restricted to the retirees in rank of Lt Col for the sake of simplicity. The intention is to illustrate how the qualifying service of a retiree, a concept central to OROP, needs to be taken into account during any exercise involving fixation of pensions in the VII CPC matrix.

Some key issues arise :

  • Notional pay of most VI CPC Lt Col retirees are likely to correspond closely to stages in Level 12A of the VII CPC matrix as increments, qualifying service for both VI and VII CPC serving personnel are the same.
  • Lt Cols who retired before 01 Jan 2006, especially those who retired prior to Dec 2004, are likely to have a mis-match between their qualifying service and that of those who retired after 01 Jan 2006. All affected know Lt Col rank became applicable on time-bound basis at a qualifying service of 13 years with effect from 16 Dec 2004.
  • For fixing the VII CPC notional pay of pre 01 Jan 06 Lt Col retirees, there ought to be some consideration applied to the fact that the notional pay finally arrived at should not be less than the VII CPC notional pay of a VI CPC Lt Col retiree with equal qualifying service.
  • Then, there is the old issue of the need of parity of pensions of older Lt Col retirees with pensions of Col(TS) with equal qualifying service, if they had put in a service of 26 years or more.
Full clarity will emerge only when detailed instructions are issued on re-formulation of VII CPC pensions of armed forces veterans. The following table is meant to illustrate how the re-formulation should proceed :

Wednesday, September 14, 2016

Pension Fixation Based On Notional Progression (Cont'd) : OROP

To be sure, this is merely a re-hash of issues covered on this blog, on other web-sites and blogs, in chat forums, in group e_mails or bars at clubs and institutes.

Not that drawing arrow-marks for marking out a logical pension progression is expected to result in an overnight re-framing of pension awards. But, on the lines of progression path for 7 CPC pension fixation in the previous post, here is the same concept applied to one of the tables (the first one) issued for implementing OROP.




{Edit}: A little clarification appears in order. The notional progression as suggested in the table needs to be governed by some constraints. 

Notional pay, hence pension, of an older retiree in a certain rank must progress to the level suggested in the table provided currently serving Officers in the older retirees' cadre and with the same type of commission progress on basis of time, i.e. length of service alone, to the higher level as shown.

The progression would, by and large, be applicable up to the rank of Major in most types of commission. But progression to the notional level of current level of Lt Col at service of 13 years may exclude those types of commissions with which Officers do not currently progress automatically to rank of Lt Col at a service of 13 years.

Similarly, notional progression to pay, hence pension, of Col(TS) at a QS of 26 years, as suggested in the table, would be justified for those types of commission with which Officers currently get the rank of Col(TS) after completing a service of 26 years.

Sunday, September 11, 2016

Some Notions Of Progression For Pension Fixation

Some time ago, I had come across a reference to "notional fixation" in pay-bands applicable to Major for determining the OROP pensions of older pensioners in Major rank, considering no one retires in Major rank anymore due to speedier time-bound promotions. Similar concerns apply in the case of fixation of 7 CPC pensions.

The concept of "notional fixation" was excellent but the rider about restricting the "progression" to a Major's pay-band didn't appeal so much. I had given my opinion, for what it was worth, in a previous blog-post.

To repeat myself, when it comes to time-bound ranks, pension parity needs to be based firstly on the nature of enrolment/commission and the cadre, then on "time" i.e. qualifying service and only after that on the "rank" which is not a constant measure of service rendered in the case of time-bound ranks. Attributes of time bound ranks have changed over the years. In their case, the true measure of service rendered is, well, the service rendered, in number of years. Here's a link to this concept. Again, it applies to 7 CPC as much as OROP.

While working on the co-relationship of qualifying service with index and level numbers of the 7 CPC Matrix in the previous blog post, it became apparent that the "notional progression" can't be a uni-directional one, leading vertically downwards in the same pay-band.

Such a "notion" budgets for imaginary increments but not the enhancements in grade pay that automatically come with time in reality. So, for a correct "notional progression", the progression has to be downwards and sideways based on what actually happens to those currently serving.

The following example indicates the manner of progression of pay for time-bound ranks which provides a rational basis for fixing 7 CPC pensions of older pensioners.

A critical and basic requirement for the validity of such a downward-sideways progression is, if the older pensioner had been in service after 16 Dec 2004, would he or would he not have been eligible, based on the QS in the extreme left column, for time-based progression to the next higher level shown in the progression path in the table. If the answer to that is in the affirmative, then fixing his pension in the lower pay-band would be a straight-forward case of discrimination.

Even though implementation of 7 CPC pay fixation is reportedly being held in abeyance, the principles of pension parity, as illustrated in the following table, would still be valid regardless of any enhancements in pay levels that might come about):


{Edit}: A little clarification appears in order. The notional progression as suggested in the table needs to be governed by some constraints. 


Notional pay, hence pension, of an older retiree in a certain rank must progress to the level suggested in the table provided currently serving Officers in the older retirees' cadre and with the same type of commission progress on basis of time, i.e. length of service alone, to the higher level as shown.

The progression would, by and large, be applicable up to the rank of Major in most types of commission. But progression to the notional level of current level of Lt Col at service of 13 years may exclude those types of commissions with which Officers do not currently progress automatically to rank of Lt Col at a service of 13 years.

Similarly, notional progression to pay, hence pension, of Col(TS) at a QS of 26 years, as suggested in the table, would be justified for those types of commission with which Officers currently get the rank of Col(TS) after completing a service of 26 years.

Saturday, September 10, 2016

A Straight Forward Set Of Pension Parity "Equations" For 7 CPC : Maj, Lt Col, Col(TS) Pensions {Pre Dec 2004 Retirees}

At the present moment, there is no sign of any movement on implementation of 7 CPC recommendations regarding pensions of armed forces veterans.

If and when some orders are issued, these are likely to be only for fixing pensions by multiplying either VI CPC or OROP pensions by 2.57. Multiplying VI CPC pensions by 2.57 is likely to yield January 2016 pensions nearly equal to or less than OROP combined with the January 2016 DR.

In a scenario like that, with OROP anomalies still not sorted out, it may be hoping for the impossible to expect rationalization of the good old 20 years Major and 26 Years Lt Col pension anomalies.

Enough has been posted about that. Here is a brief summing up, as a kind of "impossible to realize wish-list", in the form of two "equations":

PL11;i(8--->20) = PL12A;i(1--->13) for older ( pre Dec 2004) Maj pensioners.

PL11;i(21--->28) PL12A;i(14--->21) = PL13;i(12--->19) for older ( pre Dec 2004) Maj and Lt Col pensioners with PCs.


P ---> Pension corresponding to a specific index-level combination.
L ---> 7 CPC Matrix Level.
i ---->7 CPC Matrix index number for level.

As an example, the first equation states pension calculated for level 11 index 9 should equal the one for Level 12A index 2, but won't.

Pensions corresponding to appropriate cells can be calculated based on the pay in the matrix as follows and then checked for the requisite but eternally elusive parity as per equations above (even though implementation of 7 CPC pay fixation is reportedly being held in abeyance, the principles of pension parity, as illustrated in the following tables, would still be valid regardless of any enhancements in pay levels that might come about):

{Update: With recent, May 2017, amendments to IOR (multiplication factors), the figures displayed in different “levels” may change and will be updated in a subsequent blog-post, as and when amended Matrix is made available. But the suggested manner of parities for pre 2016 retirees in time bound ranks still remains relevant}

Pay Band
15600-39100                  
37400-67000
Grade Pay
6600
8000
8700
Entry Pay (EP)
25980
45400
48900
Level
11
12A
13
Index
2.67
2.57
2.57
1
69400
116700
125700
2
71500
120200
129500
3
73600
123800
133400
4
75800
127500
137400
5
78100
131300
141500
6
80400
135200
145700
7
82800
139300
150100
8
85300
143500
154600
9
87900
147800
159200
10
90500
152200
164000
11
93200
156800
168900
12
96000
161500
174000
13
98900
166300
179200
14
101900
171300
184600
15
105000
176400
190100
16
108200
181700
195800
17
111400
187200
201700
18
114700
192800
207800
19
118100
198600
214000
20
121600
204600

21
125200
210700

22
129000


23
132900


24
136900



Even though such charts have been prepared and shared in dozens of other formats, based on the above considerations a rough indicator of the manner in which 7 CPC pensions need to be calculated is as follows:

Pay Band
15600-39100
37400-67000
Grade Pay
6600
8000
8700
Entry Pay (EP)
25980
45400
48900
Level
11
12A
13
Qualifying Service
Index
2.67
Index
2.57
Index
2.57
6
1
69400





7
2
71500
8
3
73600
9
4
75800
10
5
78100
11
6
80400
12
7
82800
13
8
85300 (Pay of level 12A should apply for calculating 7 CPC Pensions)
1
116700 ✓  
14
9
87900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
2
120200 ✓ 
15
10
90500 (Pay of level 12A should apply for calculating 7 CPC Pensions)
3
123800 ✓ 
1
125700
16
11
93200 (Pay of level 12A should apply for calculating 7 CPC Pensions)
4
127500 ✓ 
2
129500
17
12
96000 (Pay of level 12A should apply for calculating 7 CPC Pensions)
5
131300 ✓ 
3
133400
18
13
98900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
6
135200 ✓ 
4
137400
19
14
101900 (Pay of level 12A should apply for calculating 7 CPC Pensions)
7
139300 ✓ 
5
141500
20
15
105000 (Pay of level 12A should apply for calculating 7 CPC Pensions)
8
143500 ✓ 
6
145700
21
16
108200 (Pay of level 12A should apply for calculating 7 CPC Pensions)
9
147800 ✓ 
7
150100
22
17
111400 (Pay of level 12A should apply for calculating 7 CPC Pensions)
10
152200 ✓ 
8
154600
23
18
114700 (Pay of level 12A should apply for calculating 7 CPC Pensions)
11
156800 ✓ 
9
159200
24
19
118100 (Pay of level 12A should apply for calculating 7 CPC Pensions)
12
161500 ✓ 
10
164000
25
20
121600 (Pay of level 12A should apply for calculating 7 CPC Pensions)
13
166300 ✓ 
11
168900
26
21
125200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
14
171300 (Pay of level 13 should apply for calculating 7 CPC Pensions)
12
174000 ✓ 
27
22
129000 (Pay of level 13 should apply for calculating 7 CPC Pensions)
15
176400 (Pay of level 13 should apply for calculating 7 CPC Pensions)
13
179200 ✓ 
28
23
132900 (Pay of level 13 should apply for calculating 7 CPC Pensions)
16
181700 (Pay of level 13 should apply for calculating 7 CPC Pensions)
14
184600 ✓ 
29
24
136900 (Pay of level 13 should apply for calculating 7 CPC Pensions)
17
187200 (Pay of level 13 should apply for calculating 7 CPC Pensions)
15
190100 ✓ 
30


18
192800 (Pay of level 13 should apply for calculating 7 CPC Pensions)
16
195800 ✓ 
31


19
198600 (Pay of level 13 should apply for calculating 7 CPC Pensions)
17
201700 ✓ 
32


20
204600(Pay of level 13 should apply for calculating 7 CPC Pensions)
18
207800 ✓ 
33


21
210700 (Pay of level 13 should apply for calculating 7 CPC Pensions)
19
214000✓