Another Bonanza For Pre-Mature Retirees

We had barely stopped cheering the relative advantage pre-mature retirees had received on account of OROP fixation (please view the previous blog-post) when along came the great news that the pro-rata reduction had been removed on pensions of those who had retired before 1st Jan 2006.

Till such time MOD and PCDA issue details of the revision, it would be a bit pre-mature to rush to making arrears calculators though some have already started appearing. But, just taking the revised PCDA order on VI CPC pensions, of those who had retired before 1st January 2006, it has been possible to make a first estimate of how their pensions will increase.

It is obvious that since it is pro-rata reduction on pensions that has been removed, those who retired earliest would benefit the most. From the graph prepared on the basis of the table of pensions applicable from 1st January 2006 till 30 June 2014 for, this must be emphasized again, pre 1st January 2006 retirees, it would appear pensions of Lt Col(TS) would receive the biggest boost of about 31.9% at QS of 20 years, followed by pensions of Brigadier retirees at about 28.15% for the same QS of 20 years. Lt Col(Select) and Col/Col(TS) would get nearly identical increases of about 22.21% at the same QS of 20 years. In fact, percentage increase graphs for Lt Col(S) and Col/Col(TS) are nearly merged. The percentage increases reduce as QS increases for all ranks.

But these are percentage increases over the existing pensions calculated in the table after applying pro-rata reduction. Equal percentage increase won't mean the same increase in Rupee terms. The graphs should be just a rough reckoner for PMR retirees and we need to wait for the final word from PCDA. (Viewers may access and use the zoom/pop-out facilitations on the frame below by hovering the cursor over the frame with the mouse)



But there is a buzz, not easy to ignore, that though removal of pro-rata reduction was absolutely justified, the principle of equal remuneration for equal work would appear to indicate the necessity of some sort of pro-rata enhancement of pensions of those pre 1st January 2006 retirees who had served more than the number of years required to get the pension based on minimum of pay of rank in the VI CPC pay-band, and as this pension will now be paid to everyone regardless of their QS.

This needs to be looked at from another angle. Though there is no pro-rata reduction of pensions for those retiring after 1st January 2006, a Lt Col taking PMR at 20 years of service will not get the same pension as one taking PMR at 23 or 24 years. Their pensions will depend on the number of increments they have drawn in their pay-band, the only difference being these pensions will not be subjected to pro-rata reduction.

So, if there is now parity between pre 1st January 2006 and post 1st January 2006 pensioners in the matter of there being no pro-rata reduction, should there not also be parity of manner of fixation of pensions for post and pre pensioners based on their QS or increments drawn?

In fact what 7 CPC has proposed by way of basing pensions on increments earned at time of retirement won't be OROP but the sort of full parity that could now be justifiably asked for in respect of pensions from 01 Jan 2006. As to how 7 CPC recommendations could cater for OROP, please refer my previous posts on that subject.