Saturday 29 August 2015

Rebuttal by Media Adviser UFESM to Times of India



Rebuttal by Media Adviser, UFESM to Times of India and Times Now 

Courtesy: - Cdr Ravindra Waman Pathak I.N. (Retd)      
Member Governing Body and Pension Cell
Indian Ex Servicemen Movement
1 Surashri,1146 Lakaki Road
Shivajinagar Pune 411016

raviwarsha@gmail.com
9822329340 

 kaulvrcanil@gmail.com

Dear Nalin,
I am sending this Rebuttal from the nearest computer available at my brother in law's place at Noida.

Apropos Times of India “Times view” published in your edition of 29th August. 

As media adviser of UFESM, I wish to rebut your views and put the record straight of what is the essence of OROP and not as postulated by you. In this connection your attention is invited to the one point of contention between the government and ESM organisations. This relates to a wrongly quoted and much misunderstood terminology of a 3% increase in pension for all pensioners year on year in perpetuity. 

In essence, it is not a 3% increase but is a periodic review of pension to bring them at par with past pensioners. This has been narrowed down to the figure of 3% keeping in view the 30% increase in salaries of serving government servants between two pay commissions. When related to pensions it is reduced to 1.5% being 50% of any pay slab. This is further amplified that such an increase would be applicable to a pensioner till he/she reaches the top scale of their authorized pension. There after it ceases to be granted till such time as a new pay commission kicks in and salaries are increased. 

The current out flow of OROP due to the inordinate delay in its implementation over the last 9 years has resulted in an increase of estimated cost of approximately 6000 crores leading to a figure of 8,293 crores as a “onetime payment.” There after as worked out by the three service pay cells independently followed by a review and checking by CGDA and finally the MoD. The figure of out flow in the following year would be .85% of the defence pension budget and subsequently reducing @. .62, .32, .21 and 0. Therefore by the 6th year there would be no review required. Mathematically calculated the highest pro-rata percentage amounts to approximately Rs.1635 crores and reducing and therefore quite a low figure to what is being mentioned in the range of 20,000 crores by un informed or deliberately obfuscating individuals who do not have the best interest of the armed forces in their mind.

Another figure being bandied around is the defence pension bill of Rs. 54,500 crores. Unknown to most including servicemen and veterans, who should be made aware, Rs 32,000 crores out of this services 4 lakh defence civilians. The balance Rs 22,000 crores is all that is available for 26 lakh ESM and 6 lakh widows. To add insult to injury most of the defence civilians are in receipt of Non-Functional Financial Upgradation (NFU), essentially meaning that they have availed OROP since 2006. Incidentally for the uninitiated the out flow of NFU in the past 8 years is whopping Rs 17,000 crores for a motley crowd of at best 20,000 personnel. 

We on our part have clearly spelt out the entire basis of our calculations but it seems that other than MoD, the finance ministry and the PMO do not seem to be able to bring out in the public domain any contentious issues that need to be ironed out. It is our perception that whatever is being done in the current scenario by various stake holders in the MoF & PMO is with a view to embarrass the Prime Minister, by not allowing him to honour his commitments made on board the INS Vikramaditya and re-confirmed in the sacred battle fields of Siachen. For us soldiers honouring a commitment irrespective of the costs involved financial or otherwise is much more important than the financial benefits of OROP.

 Mr. Prime Minister, would you like to take a call?
 
Col Anil Kaul, VrC (retd)
Media advisor
UFESM



The Red Herring of 3% annual increment in Pension - Update






It is reliably learnt that a certain meeting taken by the Defence Minister where representatives of Service HQ as well as members of the governing/executive committee of ESM organisations were present, the following was made clear and obvious and approved by the Defence Minister: -

1.  There isn’t an annual increment of pension because increment is for every additional year of service rendered to the Nation either as Services personnel or as civilian Govt employee.
Elucidation A: - Increments are paid for every subsequent year in service i.e pay of a serving personnel A with 25 years service will be 3% lesser than the pay of a serving personnel B with 26 years of service.
Elucidation B: - Pension is paid on the basis of the last pay drawn for the number of years of service rendered. In the above example, A will get a pension for 25 years of service and B will get a pension for 26 years of service. An increment will mean that A will get the pension of B, who has rendered 26 years of service and pension of B will have to be incremented and become pension for 27 years of service.  
[Please see tables below]

The Origin of the 3% (Annual) Increment demand in Pensions

2.            However from a summary of the minutes of the first meeting (of the Joint Working Group on OROP) it is well worth noting that it appears that the seeds of the mischief of an increment were sown in the incorrect recording of minutes of this meeting compiled by O/o CGDA in the following manner: -

2.1.   At Para 4 (c) of the minutes, O/o CGDA recorded the minutes as follows: -
As future enhancements have to be automatically passed on to the pensioners, Services proposal for incremental increase in pension on 1st July every year shall be considered.

2.2.  The mischief was corrected by Rear Admiral P Joshi, Chairman PARC & Naval Pay Commission Cell when he deleted the above and inserted and initialled in the margin in his own handwriting before he signed the minutes of the JWG: -
As future enhancements have to be automatically passed on to the pensioners, Service proposal for annual revision of OROP tables should be considered.   


Therefore, there is no basis as reported in the media for projecting a 3% increment attributed to leader(s) of a particular ESM organisation.

3.      There would, however, be an annual review in OROP tables. This is to remove one or more of the following anomalies: -
3.1. If C retires in a certain rank with 20 years service on 30 June of that year will draw less than D who retires with 20 years of service on 31st July of the same year because D gets the benefit of 3% increment on 1st July.
3.2.   Bunching effect of 4 years in 4th CPC, 3 years in 5th CPC and 2 years in 6th CPC
3.3.   Implementation of AVSC Phase I w.e.f 16th December 2004. It has resulted in officers being promoted to say Select rank of Lt Col in the 18th year but those after 16th December 2004 being promoted in the 14th year.

 4.      Perusal of the modified/enhanced parity tables [Circulars 500 and 501 on PCDA (P) website] indicate a pension of Rs 7065 for a Sepoy in the 20 to 27 years service bracket and increased to Rs 7175 if the Sepoy served 27.5 years or more. Similar cap will occur for all personnel within a time frame of 5 years. Therefore, alarm bells rung by vitiated persons are based on lack of information or mala-fide misunderstanding of the issue of OROP

5.      It has been calculated and revalidated with data that for the period of 5 years the financial effect is estimated to be 0.85% or Rs 185 crore.

6.       The first annual review was scheduled to take place on 1st Jul 2015 if OROP was implemented in Apr 2015 and the next annual review was to take place on 1st January 2016, when the recommendations of the 7th CPC kick in. Thereafter all annual reviews would be effective from 1st January of that year.

7.      It is understood that the 7th CPC is very clear about the differences between Civilian pension and Military pension. Due to the Civilian Govt employees serving till the age of 60 years, 7th CPC has termed civilian pensions as mature pension. Because Services personnel retire at younger ages, Military pension has been termed “aborted” pension, deserving a different method of being dealt with by 7th CPC.  

8.       It is also understood that the ESM present at the meeting (Lt Gen Balbir Singh, Maj Gen Satbir Singh, Brig Katara, Gp Capt Gandhi etc) had vouched for the DGL prepared for OROP by Services HQ and their arguments in favour of matters cited in above paragraphs.

 9. To clear the mis-statement of a very senior Lt Gen that there are two increments in the 6th CPC, I reproduce gist of the Govt Resolution 1/I/S/2008 which approved the recommendations of the 6th CPC with certain modifications: -

9.1. Para 1, Note 1: The edge presently accorded to Indian Administrative Service and Indian Foreign Service at three grades STS, JAG and SG will continue in the form of two additional increments @ 3% each which will be adjusted in the pay band (emphasis supplied). 
Interpretation: The 3% increments are for IAS & Indian Foreign Service for the 3 grades and it will be absorbed in the Pay Bands of the 6th CPC. There isn’t anything for Armed Forces like the Lt Gen (retd) believes.

9.2. Annex I (VII) – Annual increment states 3% across the board except for high performers who will get 4% increments in certain grades.

9.3. SAI (and SNI/SAFI) No. 1 and 2/S/2008 also do not (Repeat) do not contain any mention of two increments of 3%.

 10.          Therefore, the 3% annual increase quoted is nothing but a red herring. Is that why we have ESM on fast unto death believing that 3% increment has to be part of OROP?  

 Now some data

11.  Up to the rank of Major (and equivalents) who are in service will have lower pay in Apr 2014 than say Apr 2007 effect of AVSC which was effective from 16 Dec 2004 .

12. Similarly, in higher ranks there is no guarantee that a Col with 28 years service in Apr 2014 will draw a lower pay and pension than a Col in the 28th year completed in Apr 2015 or Apr 2016, simply due to the fact of higher fixation to 2014 retiree in January 2006. In fact most cells in the DGL tables (re-produced below) will not change every year.  
Major/Lt Cdr/Sqn Ldr
 In service in Apr 2007
 Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
5
6
7
8
01 Jan 06
7
23810



6600



6000
920
36410
18205

01 Jan 07
8
24730
940
37330
18665

01 Jan 08
9
25670
970
38270
19135

01 Jan 09
10
26640
1000
39240
19620
9930
01 Jan 10
11
27640
1030
40240
20120
10482
01 Jan 11
12
28670
1060
41270
20635
11034
01 Jan 12
13
29370
1090
42330
21165
11585
01 Jan 13
14
30820
1130
43420
21710
12317
01 Jan 14
15
31950
1160
44550
22275
12689
01 Jan 15
16
33110
1200
45710
22855
13240

In service Apr 2014

Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
5
-
6
7
8
01 Jan 06
7
21630








6600








6000
850
34230
17115

01 Jan 07
8
22480
880
35080
17540

01 Jan 08
9
23360
900
35960
17980

01 Jan 09
10
24260
930
36860
18430
9930
01 Jan 10
11
25190
960
37790
18895
10482
01 Jan 11
12
26150
990
38750
19375
11034
01 Jan 12
13
27140
1020
39740
19870
11585
01 Jan 13
14
28160
1050
40760
20380
12317
01 Jan 14
15
29210
1080
41810
20905
12689
01 Jan 15
16
30290
1110
42890
21445
13240

Lt Col/Cdr/Wg Cdr

Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
5
-
6
7
8
01 Jan 09
14
37400









8000









6000
1370
51400
25700
16716
01 Jan 10
15
38770
1410
52770
26385
17510
01 Jan 11
16
40180
1450
54180
27090
18306
01 Jan 12
17
41630
1490
55630
27815
19102
01 Jan 13
18
43120
1540
57120
28560
19898
01 Jan 14
19
44660
1580
58660
29330
20894
01 Jan 15
20
46240
1630
60240
30120
21490
01 Jan 16
21
47870
1680
61870
30395
22286
01 Jan 17
22
49550
1730
63550
31775
23082
01 Jan 18
23
51280
1780
65280
32640
23878
 Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
6
-
6
7
8
01 Jan 11
14
37400









8000









6000
1370
51400
25700
16716
01 Jan 12
15
38770
1410
52770
26385
17510
01 Jan 13
16
40180
1450
54180
27090
18306
01 Jan 14
17
41630
1490
55630
27815
19102
01 Jan 15
18
43120
1540
57120
28560
19898
01 Jan 16
19
44660
1580
58660
29330
20894
01 Jan 17
20
46240
1630
60240
30120
21490
01 Jan 18
21
47870
1680
61870
30395
22286
01 Jan 19
22
49550
1730
63550
31775
23082
01 Jan 20
23
51280
1780
65280
32640
23878

Colonel/Captain/Group Captain

Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
5
-
6
7
8
01 Jan 09
18
43120











8700











6000
1560
57820
28910
21057
01 Jan 10
19
44680
1610
59380
29690
21900
01 Jan 11
20
46290
1650
60990
30495
22742
01 Jan 12
21
47940
1700
62640
31320
23584
01 Jan 13
22
49640
1750
64340
32170
24426
01 Jan 14
23
51390
1810
66090
33045
25269
01 Jan 15
24
53200
1860
67900
33950
26111
01 Jan 16
25
55060
1920
69760
34880
26953
01 Jan 17
26
56980
1970
71680
35840
27795
01 Jan 18
27
58950
2030
73650
36825
27795

Year
QS
Pay in Pay Band
GP
MSP
Increment in Jul
Total
3+4+5
Pension
Pension in 17 Jan 13 letter
1
2
3
4
5
-
6
7
8
01 Jan 11
18
43120











8700










          6000
1560
57820
28910
21057
01 Jan 12
19
44680
1610
59380
29690
21900
01 Jan 13
20
46290
1650
60990
30495
22742
01 Jan 14
21
47940
1700
62640
31320
23584
01 Jan 15
22
49640
1750
64340
32170
24426
01 Jan 16
23
51390
1810
66090
33045
25269
01 Jan 17
24
53200
1860
67900
33950
26111
01 Jan 18
25
55060
1920
69760
34880
26953
01 Jan 19
26
56980
1970
71680
35840
27795
01 Jan 20
27
58950
2030
73650
36825
27795

 13. Conclusion: The above tables clearly show that in steady state, pension will not be revised every year. 

Majors/Lt Colonels/Colonels promoted earlier will draw the same pay and pension as the one promoted after him.

 Once pension is reset on 1.4.2014 thereafter no change will take place except on the implementation of the recommendations of the 7th CPC.     

 For ORs and JCOs (retd) readers – tables are being prepared and will be posted ASAP. Please understand that there are factors such as Group X, Y and the erstwhile Z as well as maximum benefit etc and many JCOs having reached the top of the table on 17 Jan 2013.

14.      I hope this clears the air and reduces the fog of mistrust and, consequent but inadvertent misinformation & misunderstanding of the red herring of 3% (annual) increment in pensions.