Minutes of First
meeting of the Working Group for implementation of
One Rank One Pension
In
order to discuss the modalities of implementation of One Rank One Pension
(OROP), first meeting of Working Group constituted as per MoD’s decision dated
24th April, 2014 was held on 2nd May 2014 in
the conference hall of CGDA’s office. The meeting was chaired by CGDA.
2. Opening
the discussion, CGDA welcomed the members and intimated the mandate given to
the working group as per MoD ID dated 24th April 2014. CGDA
also stated that for implementation of OROP, the solution be practicable and
implementable within the reasonable time frame.
3. Pr,
CDA (P) Allahabad made a a presentation amplifying the definition of OROP and
key terms used in the same. Pr. CDA(P) presented two options for consideration
of the working group for implementation of OROP. Copy of presentation made by
Pr. CDA (P) is attached herewith. After presenting the options, it was stated
that working group may make a consensus on basic parameters viz. cut off date,
definition of current and past pensioners, future enhancements etc to finalise
the proposal in real terms. Pr. CDA (P) further opined that option – I which
provides revision of pension based on arithmetical mean rates of pension of
post-2006 pensioners having equal qualifying service, is practicable one and
could be expeditiously implemented by Pension Disbursing agencies in a
reasonable time frame.
4. Reps
of Services made following points for consideration of the working group: -
a) Enhancement
taken place during service of a personnel has been average down in Option –I.
b) Cut-off
date shall be taken as 1.4.2014 and pensioners retired prior to this date shall
be treated as past pensioners.
c) As
future enhancements have to be automatically passed on to the pensioners,
Service proposal for annual revision of OROP tables could also be considered.
d) Option
projected by Pr. CDA (P) will just bridge the gap and will not establish OROP.
e) Benefits
shall also be considered for JCO/OR.
5. After
detailed discussion, the following points were deliberated up on: -
i) As
mandate given to the working group is to establish parity in pensions,
establishing pay parity is beyond its purview.
ii) In
his Interim Budget speech for the years 2014-13 (attached as Annexure -2), the
Hon’ble FM announced that Government has accepted the principle of OROP for
Defence Forces ad thus decided to close the gap in pensions between Pre-2006
retirees and Post-2006 retirees. He also specifically mentioned that as a
result of changes in pension rules applicable to defence Forces notified on
three occasions in 2006, 2010 & 2013, the gap between Pre-2006 retirees and
Post-2006 retirees has been closed in ranks – Havildar, Nb Subedar, Subedar and
Subedar Major. The gap that exists in the ranks of sepoy, Naik, and in the
ranks of Major & above is now proposed to be bridged by walking “the last
mile and close the gap for all retirees in all ranks.” Based on this inference
is drawn that Pre-2006 retirees shall be consideredPast retirees. Accordingly,
those who have travelled in the regime of 6th CPC and retired
thereafter shall be treated asCurrent Retirees.
iii) Date
of implementation of new recommendations shall be from 1.4.2014.
iv) Annual
incremental increase in pension as proposed by Services would lead to change in
existing pension structure which is not in the domain of working group and also
not practical one. Hence, further enhancements in pension shall be considered
based on recommendations of Seventh Pay Commission recommendations.
6. CGDA
stressed on the need to understand the key terms used in the definition of OROP
provided by MoD through the minutes of the meeting held on 26.2.2014, with
greater clarity so as to arrive at the best possible solution. Reps of Services
concluded that for better appreciation of the two options presented by Pr. CDA
(P) during the meeting, they need a thorough examination and they will revert
on the same. However, it was suggested to have formal discussion between reps
of Services and reps of CGDA/Pr. CDA (P) to discuss some points of doubt.
Keeping in view the time line given to the working group CGDA advised to have
the discussions on the same day and views of Services shall be given to CGDA
office positively by 5th May 2014 to examine the same.
7. Meeting
ended with a vote of thanks to the chair.
Signed by all
participants
Appendix –I
Points of discussion
held between Reps of Services and reps of CGDA, PCDA (P) on 2nd May
2014
The discussion was
chaired by PCDA (P) Allahabad.
1. Reps
of Services intimated that they have gone through option-I and have the
following points for consideration/clarification.
i) Anomaly in rated
for pension for higher qualifying service vis-à-vis lower qualifying service in
same rank shall be considered for removal.
ii) Anomaly in rates
of pension for higher rank vis-à-vis lower rank in same qualifying service
shall also be considered for removal.
iii) Methodology may
be drawn for arriving at revised pension where there is no retiree available
for any length of qualifying service.
iv)
Tables for rates of pension shall be prepared for less than 20/15
years of qualifying
service.
v)
Same tables shall be prepared for Col (TS) and Col (S).
vi) Qualifying service
shall be rounded off to one year due to change of increment policy in July each
year for serving personnel. It will not make any change in the financial
effect.
2. After
detailed discussion, issues at (i) & (ii) above were agreed to in principle
subject to finding out a suitable method for achieving this. PCDA (P) suggested
that further examination will be required to arrive at any decision for issues
(iii), (iv) & (v) above. There was no consensus for the issues as at (vi)
above.
3. Reps
of Services stated that they had not examined option-II presented to the
working group – and their detailed comments will be provided to CGDA office as
early as possible.
Signatures of
participants
Record of discussions
of Second meeting of the Working Group for Implementation of One
Rank One Pension
The second meeting of
the Working Group constituted as per MoD’s decision dated 24th April
2014 was held on 8th May 2014 in the conference hall of CGDA’s
office. The meeting was chaired by Addl CGDA.
2. Opening
the discussion, Addl CGDA welcomed the members of the Working Group and desired
feedback from the Services on the proposals of Pr. CDA (P) presented during the
first meeting of Working Group held on 2nd May 2014.
3. Reps
of Services put forth following points for clarification by members of the
working group: -
a)
From where the Terms of references of the Working Group have been taken
b) The aim is to grant
OROP or is it one time increase to bridge the gap.
4. Reps
of Services further submitted that Terms of Reference should be taken from the
suggestions/recommendations made in the Report of Rajya Sabha Committee on
Petitions dated 19.12.2011 and subsequently re-iterated in the definition
approved by Hon’ble RM and circulated by Ministry vide their ID dated
26.2.2014. Speech of Hon’ble FM is a reference point and not Act of parliament
ad hence, it should be viewed in that light.
5. Pr
CDA (P) stated that the Terms of Reference for the Working Group has been
clearly spelt out by Ministry of Defence in order dated 24.4.2014 and there is
no need for further elucidation. Pr. CDA (P) also intimated that the key terms
have been taken in his last presentation held on 2nd May 2014
read with Interim Budget Speech 2014-15 of Hon’ble Finance Minister. The later
one is considered to elaborate the key terms which are silent in the definition
circulated by MoD vide their ID dated 26.2.2014.
6. After
discussion, it was considered that the points of disagreements may be recorded
and referred to the Ministry. These points of disagreement recorded during the
meeting are enclosed as Annx-2 to these minutes of meeting.
7. Meeting
ended with a vote of thanks to the chair.
Signature of
participants
* * * * *
Points of
Disagreement in the Second meeting of Working Group on OROP held on
8.5.2014 in the office of CGDA
Points of Differences:
-
1. Definition
of OROP
Definition
of OROP should be drawn from the Hon’ble FM Interim Budget 2014-15 speech vide
which the gap between pre-2006 retirees and post-2006 retirees for all ranks
needs to be closed.
As
per Services, the definition of OROP is given by the Rajya Sabha Committee on
Petitions presented on 19.12.20111 and re-iterated by the Hon’ble RM in his
directions given in meeting held on 26.2.2014, which states that “One Rank One
Pension implies that uniform pension be paid to the Armed Forces personnel
retiring in the same rank with same length of service, irrespective of their
date of retirement and any future enhancements in the rates of pension to be
automatically passed on to the past pensioners.” Services also feel that
essence of the Hon’ble FM speech in parliament is also the same. However,
details emerge only from the OROP definition give above which has not cut-off
date like 1.1.2006 as brought out in Para 3 of draft Government letter
submitted by the Services. In other words, in the opinion of the Services there
is no cut off date like 1.1.2006.
2. Interpretation
of the term “Uniform Pension” in the OROP definition
Uniform
pension means pension under a uniform pay/pension structure i.e. under same pay
scales with same qualifying service & pension calculation formula. It need
not necessarily lead to same pension for all retiree (past & present) in
the same rank and same qualifying service because of the annual increments
being given to the serving personnel.
As
per Services, uniform pension means ( as in the term OROP)/same/equal/identical
pension amount for Armed Forces personnel retiring in the same rank and same
length of service i.e. qualifying service ( as defined in Pension Regulations
for the Army 2008) as per para 3 of the report of the Rajya Sabha Committee on
Petitions presented on 19.12.2011. There is no intention of introducing annual
increments for pensioners.
3. Interpretation
of the term “Length of Service” in the OROP definition
The term “Length of Service” in the OROP definition (i.e. same
pension for same rank for same length of service) is to be treated as number of
years of service put in by the pensioner in the rank last held. Alternately, if
total qualifying service is to be treated for the purpose of OROP then
qualitative aspects relating to length of service in terms of numbers of years
rendered in each rank the service person has served before the retirement in
the rank last held, need to be taken cognisance of. While this will be difficult
to implement in practice, appropriate mechanism which is workable and
implementable, can be worked out to implement the spirit of OROP so as to
bridge the gap in pension of pre & post 2006 pensioners.
Whereas
Services feel that length of service and qualifying service are synonymous and
any other interpretation gives rise to certain anomalies viz. reduction or no
benefits in pension on promotion (one illustration was given). Services
interpretation is based on Rule 19 of Pension Regs 2008 as also the precedence
of MoD ltr No.1(11)/2012-D(Pen/Policy) d/d 17.1.2013 wherein qualifying service
and length of service are synonymous for determining pension. The alternative
interpretation of “Length of service” being the service only in the rank last
held is not only violative of existing regulations but also near impossible to
implement with existing format of PPOs only indicating the qualifying
service.
4. Bridging
the gap in the pension amount between current & past pensioner vis-à-vis
extending the benefit of changes of improved service conditions of serving
pensioners to past pensioners
It
is a considered that a method has to be worked out with a view to bridge the
gap in pension amount between pre & post 2006 pensioners without extending
the benefits of improved service conditions (viz. method of faster promotion
applicable to the current personnel) to past pensioners.
Services
view is that OROP is not only bridging the gap but removing the gap with a view
of granting same/equal pension to all retirees with same rank and same
qualifying service with future enhancements to be passed to the past pensioners
automatically as enunciated in the definition of OROP. It is also brought out
that benefit of MSP and Grade Pay for calculation of pension has already been
extended to past pensioners vide MoD letter No. 1(11)/2012-D (Pen/Policy) dated
17.1.2013. Similarly, other future benefits, if any, should be passed on to the
past pensioners.
5. Modalities
for automatically passing of the benefit of future enhancement in rate of
pension
As
and when there is enhancement/changes in the basic rate of pension (either
based on pay commission recommendations or Govt policy), the benefit is to be
passed on to past pensioners.
The
Services endorse the above with the qualification that there will be a need for
periodic review of OROP tables, say on a yearly basis wherein a few anomalies
which may have emerged (junior drawing more pension than senior) will require
to be addressed.
Signatures of Members
* * * * *
Record of discussions
of Third meeting of the Working Group for Implementation of One Rank One
Pension
In
order to decide the modalities for implementation of OROP, the third meeting of
Working Group constituted as per MoD’s decision dated 24th April
2014 was held on 9th May 2014 in the conference hall of CGDA’s
office. The meeting was chaired by CGDA.
2. Opening
the discussion, CGDA welcomed the members of the Working Group. Addl CGDA
briefed the development taken place in the last two meetings and sought views
of reps of the Services on the average method proposed by PCDA (P) Allahabad.
Reps of the Services stated that the period of span taken for calculating
average is too big (1.1.2006 to 31.03.2014) and the Services felt that the
period be restricted to one year i.e July 13 to March 14. Reps of Services
further re-iterated that instead f taking average pension, maximum value of
pension for each qualifying service should be taken for making OROP tables.
3. Rep
of MoD made a point that Maximum of Fitment table as done in the case of JCO/OR
can be taken. Reps of Services were not agreeable on the proposal ad stated
that rate of pension being drawn by a current pensioner (viz post 1.7.2013)
should be allowed to the past pensioners in order to implement OROP in the true
sense. On the issue of referring Report of RSCommittee of Petition for
determining terms of reference, JS (E) pointed out that there are large no. of
Parliament Committees whose findings/recommen-dations may or may not be
accepted by the Government. As such, Terms of Reference derived from the FM
speech made in Parliament or as per the definition provided by
RM.
4. Services
also put forth separate Model of calculation of pension which was a
modification to the Model II presented by the PCDA (P) Allahabad vide his
presentation on 2.5.2014. Reps of Services also agreed that extreme deviations
in a range could be excluded to avoid undue/unintended benefits across the
board.
5. CGDA
suggested that Services may provide a write up on their proposal with
assumptions for examination. Addl CGDA also stated that Pr CDA (P)’s option-I
may also be examined by the Services by considering mean or mode value in last
one year data starting from 1st July 2013 to 31st March
2014. It was agreed upon that all the methods suggested to the Working Committee
should be examined in detail with reference to the live data of three Services.
6. Meeting
ended with a vote of thanks to the chair.
Signatures of
participants
* * * * *
Record of discussion
of Fourth meeting of the Working Group for Implementation of One Rank One
Pension
The 4th meeting of the Working Group constituted as per MoD’s decision
dated 24th April 2014 was held on 15th of May
2014 in the conference hall of CGDA’s office. The meeting was chaired by Addl
CGDA and list of participants is attached as Annx-I to this minutes.
2. Opening
the discussion, Addl CGDA welcome members and referred the discussion held on 9th May
2014 in which the Services wanted to examine a revised proposal based on Mean,
Mode, and Maximum value (after excluding extreme values) by taking data of last
one year retirees starting from 1st July 2013 to 31st March
2014. Addl CGDA stated that the new methods suggested by the Services on 12th May
2014 have been gone thorough and it is found that both the methods have some
reservations as already pointed out on the Services initial proposal given to
the working group by Ministry. The main issues highlighted were annual revision
of pension, allowing maximum pension of post 1.7.2013 retiree, extending
benefits of current promotion/service conditions to the past retirees, current
& past pensioners etc.
3. Reps
of Services made the following points for consideration of the working group: -
a) Pension data
for last one year as agreed to in last meeting was yet to be made available.
b) Instead
of taking maximum value amongst mean, median and mode, the Max function should
be taken.
c) The values of
OROP tables based on maximum pension after removing extreme points shall
approximately be same as proposed by Pr CDA (P) to determine pension on mean
value. Fr this, different pension tables could be issued for different entry
grades in JCO/OR as well as Officers.
d) On
adopting ay other method for implementation of OROP, pension structure
anomalies will continue. If maximum pension is taken, it will be conforming to
the definition of OROP and would not generate grievances and litigations by ESM
post implementation.
e) The
data available for the Air Force (all ranks) pensioners retired between
1.7.2013 to 31.3.2014 was made available to the Working Group for working their
proposals across the three Services.
f) As far
as the issue of annual revision of pension is concerned, the Services
emphasised that there is no intent to upgrade pensions annually. Only an annual
review of OROP tables is envisaged to take care of any anomalies which may have
crept in. It was also clarified that once steady state is achieved, there will
be no requirement of annual review of OROP tables.
g) As
far as extending benefits of current promotions/service conditions to the past
retirees is concerned, the Services proposal does not envisage notional
promotion to past retirees for the purpose of OROP.
4. Reps of
Ministry also made the following points for consideration of the working group:
-
i) Removal
of 33 year conditionality for pre-2006 Defence pension is sub-judice and should
not be considered by the Working Group.
ii) Post-2006
pensioners could not be equated with current retirees as benefit of OROP has to
be considered only for pre-2006 pensioners.
iii) As
giving rates of pension maximum or otherwise has to be decided by Ministry of
Finance, financial implication for all possible proposals should also be worked
out.
5. After
detailed discussion, it was decided that Pr CDA (P) may check the difference in
rates of pension working out revised pension on mean, median, mode and max
function along with financial implication in each scenario. Pr CDA (P) may also
provide data of last one year retirees of Army pensioners to reps of Services
for their analysis.
6. Meeting
ended with a vote of thanks to the chair.
Signatures of participants
(Source-Aerial View post)
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