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.