Implications Of VII CPC Recommendations As Illustrated With Example Of Pensions Of Lt Col

{Update: The increment method originally recommended by 7 CPC was later changed by applying inter-CPC formulas for calculating "Notional Pay" of older retirees. Both methods did not co-relate the qualifying service of older retirees. The table in this blog post has been updated following amendments that were issued subsequently}

As mentioned in the previous blog-post, the grey areas regarding pension fixation for older retirees, as recommended by VII CPC, are best taken stock of in reference to actual examples.

Having touched on the vagueness surrounding pensions, as recommended for retirees in rank of Major, perhaps it is time to take a look at the other hapless category of armed forces retirees, the veteran Lt Cols.

It may be best to reproduce in enirety the recommendations of the pay commission regarding fixation of pensions as follows :

"10.2.87 The Commission recommends the following with regard to fixation of pension for past defence forces personnel retirees:

i. All the Defence Forces who retired prior to 01.01.2016 (expected date of implementation of the Seventh CPC recommendations) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix. This amount shall be raised to arrive at the notional pay of the retiree by adding the number of increments he/she had earned in that level while in service, at the rate of three percent. Military Service Pay shall be added to the amount which is arrived at after notionally fitting him in the Seventh CPC matrix. Fifty percent of the total amount so arrived at shall be the revised pension.

ii. The second calculation to be carried out is as follows. The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.

iii. Pensioners shall be entitled to the higher of the two.

It is recognised that the fixation of the pension as per the above formulation (i) above may take a little time since the records of each pensioner will have to be checked to ascertain the number of increments earned in the retiring level. It is, therefore, recommended that in the first instance the pension, may be fixed in terms of formulation (ii) above, till final fixation of the pension under the Seventh CPC matrix is undertaken."

Let us ask some questions straight away:

• Why has VII CPC not addressed the issue of OROP in that brief paragraph?

• How has VII CPC spelt out the manner in which "equal service" for the same rank will be catered for in that matrix referred to in recommendations?

• Why are the two illustrations given in the CPC recommendations, following that para, only of those who retired in the VI CPC regime? What about retirees who retired in the V or IV or III CPC regimes? In those days, they did not have "pay-bands" or "grade pay" refereed to in VII CPC recommendations.

The answer to all these questions is, of course, that the blogger does not have the faintest idea.

Though the title of this blog post has a specific reference to retirees in the rank of Lt Col, some of the doubts raised are general in nature and serve to point to a lack of answers in the recommendations.

To start with, where the para of recommendations states, "All the Defence Forces who retired prior to 01.01.2016...", is it just possible it intends to mean "All personnel of defence forces who retired between 01 Jan 2006 and 31 Dec 2015 in the regime of VI CPC"?

That could make some sense because in the context of armed forces, the number of increments for the same years of service, pay-bands, grade pay are the same for respective ranks for both VI and VII CPCs as reflected in the matrix. The matrix is, more or less, consistent if one considers retirees who retired and will retire between 01 Jan 2006 and 31 Dec 2015.

Example:

Let us take the case of a Lt Col with, say 21 years of service, who retired on PMR on 30 Nov 2015. For the sake of simplicity, we can assume this Lt Col was promoted to the, now time-bound, rank of Lt Col on 01 July 2007 at a service of 13 years. That means he had 8 increments to his credit based on which, in the VII CPC matrix, his notional pay parity, in level 12A, would be 143500/- and his post VII CPC pension, inclusive of MSP would amount to 79500/-

Now consider the case of a Lt Col, also with 21 years of service who retired in the regime of V CPC on 31 October 2003 before, what some would term the infamous, date of implementation of phase-I recommendations of AVS Committee, viz 16 Dec 2004. Assuming, this second Lt Col had picked up his rank at a service of 18 years in July 2000, he would have "earned" three increments in the pay-scale applicable to his pay-scale rank at the time. This second Lt Col would then be placed in level 12 A of VII CPC matrix at the notional pay parity point of 123800/- which corresponds to a VII CPC pension (inclusive of MSP) amounting to 69650/-.

We see here the possibility of two pre 01 Jan 2016 veterans in the rank of Lt Col, with the same service of 21 years, being placed at two different pension levels post 01 Jan 2016 at pensions of 79500/- and 69650/-. Clearly, the recommendations and the matrix do not reveal the full story.

Increments Or 2.57X:

Another inference that can be drawn from the recommendations is that the pension arrived at as per para 10.2.87 sub-para (ii), i.e. by using a multiple of 2.57, yields a post 01 Jan 2016 pension of 26265 x 2.57 = 67501.05 for retirees in the rank of Lt Col. In the matrix, it corresponds to some point in between 1 and 2 increments which have pension values of 66100/- and 67850/- respectively in level 12 A. So, at first sight it appears any Lt Col veteran with more than one increment would need to have his pension fixed based on increments rather than the one arrived at with the multiple of 2.57.

OROP And The Matrix:

The scenario gets murkier if we bring in the element of OROP. Some behind the scenes tinkering seems to be presently underway for preparing tables of OROP pensions to be effective from 01 July 2014.

The powers that be alone know what they intend to unleash by way of what they would then term as OROP, but in specific reference to the VII CPC matrix, would the 2.57X multiplier be used on pension of 26265/- fixed by VI CPC for Lt Cols or used in conjunction with OROP pensions, presumably based on rank and years of service, expected to be thrown into the public domain shortly?

One of the aims of this blog-post is to underline the rather over-simplistic approach to illustrations in VII CPC recommendations referred to above. Some issues definitely arise when we shift to even a very simple example based on V CPC regime retirees as discussed in the preceding paragraphs.

It is also seen that the recommendations could raise lots of other questions in the context of OROP.

As an example, would the pensions of VI CPC retirees be first fixed as based on the 7 CPC matrix and pensions of V CPC and earlier regime Lt Col retirees then adjusted under OROP, based on equal service, with the pensions of VI CPC Lt Col retirees?

In the above example, the retiree under V CPC regime would then have his pension fixed at 79500/- and not 69650/-, as based on years of service and not increments earned for parity with a VI CPC retiree, the latter having his pension fixed on basis of increments as per the VII CPC matrix.

An Alternative:

This was suggested previously elsewhere. One other approach could be to review the term "increments earned" used in the above-mentioned para of VII CPC recommendations. 

The increments required to be considered would be those required to attain the actual years of service put in by a retiree when considered in the specific level of the matrix.

In the example of the Lt Col, considering that level 12A of the matrix starts at a service of 13 years, all previous Lt Col retirees with 21 years of service would need to have post 01 Jan 2016 pensions fixed at increment stage of 8 as 13+8=21.

The increment stage would need to apply to all past Lt Col retirees with 21 years of service for fixing their pensions and not the increments actually earned by them in the pay-scale of Lt Col. Those increments could have been as low as just 1 in the case of a Lt Col who had picked up the Lt Col rank at service of, say, 20 years in the regime of IV or V CPC and then taken PMR at 21 years of service.

A table could bring out the probable relationship between the increments earned component of the VII CPC Matrix vis-a-vis the number of years of service that these increments currently correspond to :

Pay Band	37400-67000
Grade Pay	8000
	Level 12A	Pension (Inclusive Of MSP 15500/-)	No. Of Years Of QS (Assuming Level 12-A starts at QS=13 years)
1	116700 121200	68350	13
2	120200 124800	70150	14
3	123800 128500	72000	15
4	127500 132400	73950	16
5	131300 136400	75950	17
6	135200 140500	78000	18
7	139300 144700	80100	19
8	143500 149000	82250	20
9	147800 153500	84500	21
10	152200 158100	86800	22
11	156800 162800	89150	23
12	161500 167700	91600	24
13	166300 172700	94100	25
14	171300 177900	96700	26
15	176400 183200	99350	27
16	181700 188700	102100	28
17	187200 194400	104950	29
18	192800 200200	107850	30
19	206200	110850	31
20	212400	113950	32

There will be additional complications when examples of retirees who retired in VI CPC regime but picked up their Lt Col ranks post AVS-I in V CPC regime.

The issue of Lt Cols who had retired with 26 years of service in V CPC regime prior to implementation of AVS-I will pose an additional twist to the complexity and needs to be dealt with separately.         

Some Speculations On The VII CPC Matrix With Examples Relating To Rank Of Major

This follows on the previous blog post as well as some comments on the Aerial View blog. (Links are at the end of this blog-post)

Some examples had been cited to see how the proposed matrix would affect pensions of pre 2016 and pre 2006 retirees.

Let us first take the case of retirees in Maj rank. We can assume a total qualifying service of 20 years.

It must be remembered that there was a time when Maj rank was obtained on completing 14 years of service. That was reduced to 11 years many years later. Now the rank of Major is obtained on completing 6 years of service.

So depending on when an older veteran with Major rank retired, the number of increments as Major could be 6 or 9 for reaching the service of 20 years as against 14 increments that would be currently required at level 11 of the matrix.

These increments correspond to pay points of 80400, 87900 and 101900 respectively as shown highlighted in the matrix.

Clearly, if the OROP principle of equal service in rank is to be applied, under 7 CPC, an older Maj retiree with 20 years would need to have his pension placed at par with that of a Major retiring in and after Jan 2016 with the same service of 20 years.

As per the matrix, the Major retiring in 2016 and later with 20 years of service would have 14 increments to his credit. That is where the notional pay point, hence the pension level, of the older retirees should be and not the one determined by the lower number of increments they had actually earned in the past for the same service of 20 years.

Service At Promotion To Major Rank	Increments In Current 7 CPC Matrix Level 11 For A Qualifying Service of 20 Years	Notional pay Point In 7 CPC Matrix Level 11 For A Qualifying Service of 20 Years	Pension Parity Points Inclusive Of MSP Of 15500 For A Qualifying Service of 20 Years
14	6	80400	47950
11	9	87900	51700
6 (Current)	14	101900	58700

The above table summarises the considerations as applicable to a Major retiree with 20 years of service if just the level applicable to Major is considered.

But considering that nowadays all Officers are minimally Lt Col at a service of 20 years with 7 increments (13+7=20), the notional pay parity point for an older Major retiree should be with that of a Lt Col with 7 increments at level 12A i.e. 139300. That corresponds to a 7 CPC pension of 77400. 

More on the subject in relation to the rank of Lt Col, a bit later.
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Links To Connected Material :

Previous Blog post : http://goo.gl/5RUq2x

Discussion On Aerial View Blog : http://goo.gl/zOrcA9

The VII CPC Matrix : Over To Mr. Anderson

The proposed matrix and recommendations under Chapter 5.2 and para 10.2.87, that form part of the VII Central Pay Commission recommendations of interest to defence services, have been more than just a little visible online following release of the recommendations.

It is still very early days yet and one would be extremely rash to jump to conclusions at this stage, especially those relating to post 01 January 2016 pensions of those who retired and will retire before 01 January 2016.

But the matrix does yield some puzzling aspects and perhaps we would need a Neo to come on the scene and be "The One" to sort things out for everyone affected.

Take for instance the levels 12A, 13 and 13A in the matrix. These would appear to relate to the ranks of Lt Col, Col and Brig respectively. The three levels have the same index of 2.57. If the numerals in the extreme left column are assumed to be annual increments, then we come to some interesting speculations.

If a former Lt Col retiree had 26 years of service to his credit, then even if he had retired before December 2004 when the rank of Col on time bound basis at service of 26 years had come into vogue, he would should correspond to the stage with 13 (13+13=26) increments. That would ought to place him at the pay point of 166300. His pension could then assumed to be 83200 90750, after factoring in 50% of MSP.

Under OROP, If a Lt Col did indeed retire in Dec 2015 with 26 years of service, then all previous retirees in that rank and with that much of service would then have to receive as much pension as this Lt Col. The number of increments such a Lt Col retiree would be eligible for would be the ones mentioned previously, viz., 13 (26-13=13).

However, that needs to be viewed in conjunction with the stipulation that the number of increments would be the actual increments earned in the corresponding pay band and not the number nowadays required to reach the number of years of service put in by a veteran.

On the other hand, a Col retiree with 26 years of service would ought to have parity defined by the pay point 168900 under level 13 at 11 increments (15+11=26). That corresponds to a pension of 92200. The same rider, of increments earned as against number of increments required to attain years of service actually put in, applies here as well.

If these assumptions turned out to be correct, it would appear the pre / post AVS-I disparity between Lt Col and Col retirees with 26 years of service would remain.

But if the new matrix does bridge the pre and post AVS-I gap between pensions of Lt Col and Col rank(on time-bound promotion with 26 years of service), it would be a step in the right direction.

At first glance, the matrix does not appear to provide any resolution whatsoever in the case of a Maj retiree with 20 years of service. He is placed at a salary point of (6+14=20) {Edit: Bearing in mind the constraint of the lacuna of increments earned vs increments required to attain actual service} i.e. 101900 under level 11 with an index of 2.67. That yields a pension of 50950 58700. Compare this to the situation applying to a Lt Col also with 20 years of service who would be placed in level 12 at a salary point (13+7=20) of  139300 under level 12. That yields a pension of 73900 77400. The gap in this case is considerable.

But, as in the case of all half-baked speculations, the eventual reality is likely to be entirely different. If the number of actual increments is to be used, the pensions arrived at could be less than the above figures.

That raises an important question. In fact, several questions! If the number of actual increments earned is used, would it take a veteran to the point in the matrix, under the appropriate level, that would correspond to the number of years of service a veteran had actually put in?

If not, then would the criterion of "equal service" under OROP be satisfied by using the matrix? Would that not require that the number of increments required to reach the actual service be used to fix notional pay in the matrix rather than the increments actually earned?

OROP : Some Considerations Relevant To Time Bound Promotions

The veteran community was more than just a little concerned when references to implementation of OROP failed to materialize in the budget speech on 28 February 2015.

If OROP does come through soon, the only conceivable doubts can be about what would be the cut off date selected for equating pensions of older retirees with current ones and what would be the procedure adopted, if any, for ensuring that pensions for the same service in the same rank stay at the same level.

When there is constant talk of "modalities" and "calculations", the lack of sincerity becomes a bit obvious. What modalities and which calculations? All that is required is to see what was the maximum pension on 01 April 2014 of a current retiree in a certain rank and with a specific number of years of service. Then, all that has to be done is to ensure all previous retirees in the same rank and with the same service get the same amount of pension from 01 April 2014. Where is the calculation involved? It is just a matter of reading records from a table composed of existing pay details.

On the Aerial View Blog, a copy of the services DGL, made available for all to read, makes it very clear how straight forward the issue is. Here is a link for reference https://bit.ly/2Ry3RFO

What is really pertinent is how sincere the implementation will be in providing solutions, in the case of veteran Officers, to issues that resulted from disparities in pensions applicable to time bound ranks. The term "Select" and "Time Scale" is, on purpose, not being used in view of the welcome, though much delayed, instructions from Army Headquarters to do away with this far from dignified method of qualifying a rank for no real official or administrative reason.

The services DGL is quite specific on this. The letter makes it clear that the pension of an old time Major veteran who had completed 20 to 25 years of service at retirement ought to get the OROP pension of a Lt Col (now a time bound rank) with an equal number of service years on the cut off date, similarly, a veteran who had retired as Major or Lt Col before cut off date after completing 26 years of service, should get  pension equivalent to that of an Officer with the present time bound rank of Col with equal service.

The services DGL also clarifies that in case the service required for time bound promotion reduces in future, then the pensions of older retirees would have to be re-fixed accordingly. As an example, if the time bound Col rank is given in future at service of 23 years instead of 26, if not earlier as it rightfully should be given, then all previous pensioners holding ranks of Maj and Lt Col with more than 26 23 years of service would become eligible to the pension of a retiree with time bound rank of Col.

What is strange is that reports of very recent meetings between some representatives of ESM and Hon'ble RM do not convey the impression that these aspects have been touched upon. There was just a mention of the pension of pre 96 Majors with 21 years of service needing to be made equal to that of Lt Col. Some details of that meeting are available here http://goo.gl/dyz3Ba

Even now, when the whole OROP subject is stated to be nearing some sort of finalization, there is an urgent requirement that all affected veterans recognize these issues and that associations representing veterans' interests are fully abreast. 

Pension Parity Issue : Of Interest To Veterans Who Retired As Lt Col (Select And TS)

Following upon the previous blog post, and in light of  some blog posts read and discussed in recent years, not to forget the very recent news on the OROP matter, it is perhaps in order to highlight some very concrete issues, concerning veterans who retired as Lt Col, that need to be grasped if these are to be subjected to some form of formal representation.

For this purpose, the relevant portions of the relevant blog posts have been linked to, with highlights wherever applicable, at the bottom of this blog post.

Consider the case of a hypothetical veteran wishing to address the matter. Perhaps the first step should be an application by him to the appropriate directorate in respective Services HQs for a rationalisation of the table at Annexure A to MOD Letter No. 1(11)/2012-D(Pension/Policy) as attached to PCDA (Pensions) Circular No. 500 dated 17 January 2013. The hypothetical veteran would need that pensions shown for the ranks of Lt Col(TS), Lt Col and Col(TS) for a service of 26 years or more be fixed at the same level viz., 27795/-.

The grounds for the hypothetical veteran would be very straight forward:

• I retired in 1979/1989/1999/2003, 'A' retired in Dec 2004/2005.
• I had put in 26 years of service, 'A' had put in 26 years of service.
• I was superseded for not getting promoted to the first select rank, 'A' was superseded for not getting promoted to the first select rank.
• My pension has been fixed at 26265/- in table ibid whereas the pension of 'A' has been fixed at 27795/-.
• The above fixation of pension is therefore discriminatory and needs to be rectified from due date. (Note : It'll probably now be 01 Jan 2006, unlike OROP which will be effective from 01 April 2014).

The hypothetical veteran would need to be pretty clear in advance of the tone and tenor the services HQs would adopt while responding to a representation on those lines. But their response would at least give an inkling as to what the official reasoning is. It would also indicate what future avenues need to be explored for addressing the anomalous award of pensions.

Ideas and views expressed eloquently elsewhere in blog posts, comments and replies are all scattered and this blogger would like to take the liberty of collating and summarising the same here for ease of reference. The theme chiefly comprises of the need to view the uncalled for post-retirement down-gradation, of those who missed the promotion bus while in service, in light of the following:

•  Even if super-session was found justifiable on the basis of the organizational structure (the pyramid), the perceived necessity of having some sort of appraisal system (even if flawed) and the need to empower those placed in authority over others ( i.e. the initiating and reviewing Officers) with a means of obtaining conformance (by any means), it was never intended to be a kind of permanent punishment. Its bad effects after retirement have no justification, whatsoever.

• A superseded Officer more than paid for his error, acts of omission/commission or his plain bad luck, while in service for not having been able to obtain a high enough grading. He had to serve under former peers, even juniors, and never obtained any manner of financial parity with his peer group throughout his service years.

• After having endured, rightly or wrongly, the trials, tribulations and opprobrium of supersession as summarised above, the superseded Officer still has to his credit the number of years of service he had put in. This is a reality that cannot be washed or swept away. His retirement pension has to be determined keeping that in mind and it, by and large, is actually based on reckonable years of service.

• The problem arises only when someone with an equal number of years, also superseded, automatically gets a higher time-scale based rank many years later due to some change in promotion policy and, consequently, begins to draw a higher pension than the person who retired in the past, in-spite of all the normalisations, fitments and adjustments done by subsequent pay commissions.

The hypothetical veteran could do worse than obtaining full justifications from the numerous online discussions on the matter for seeking a correction/rationalisation from respective services HQs. Of course he could not quote opinions read on the web in official correspondence connected with his pension, but the basis for a representation would become that much clearer.

Some of the important online notings and discussions that this blogger has come across are linked to as follows :

• Para 11(d) of Minutes of Dec 2013 AGM of RDOA, with the relevant portions duly highlighted.
• Blog Post of Harmed Forces dated 13 February 2014.
• Blog Post of RDOA dated 06 March 2014.
• Discussions and comments on Aerial View blog post dated 27 June 2014 (Edit: Now no longer accessible in view of their deletion by Blog owner of 'Aerial View' blog).
• Blog Post of Sunlit dated 29 June 2014.
• Blog Post of CGENT dated 14 June 2014.