Friday, April 29, 2011
One Rank One Pension (OROP) – An Approach - Rear Adm Alan O'Leary
Remarks by Host : Although it is not clear whether this Paper has been forwarded to Petitions Committee of Rajya Sabha, yet the information provided has a lot of substance and gives a clear insite into how the pay commissions tend to denigrate the Armed forces by providing undue advantages to Centralised Civil Services and would be of interest to many. As such it has been included here for the benefit of our veterans and readers visiting the blog. Thanks
A paper By Alan O'Leary is forwarded for your info -an insider's view of the scheming that goes on.
Alan was Chairman of the Services Pay Commission Cell until he asked to be relieved due to too much interference in his job by 'outsiders'. I believe he was replaced by a Maj Gen Kundu.
Chew on it. It is an eye-opener. The villain of the piece is of course was Sushama Nath - now Expenditure Secretary - who was then the Secretary to the 6CPC.
The Chairman, Justice Sreekrishna is also largely to blame - he has now been indicted by the AP High Court for another case, and the cops have been told to arrest him.
Hope they do.
There is a lot of talk about OROP. I do not profess to be an expert on pensions,but during my innings with the PARC in the Sixth CPC,came to learn of some of the intrigue. Hence I made out an abridged paper,that I thought you might read.
One Rank One Pension – An Approach
By Rear Admiral Alan O’Leary (Retd)
Ex -Chairman PARC Sixth CPC
1. For sometime past, I have contemplated putting my thoughts together on OROP (One rank, one pension) and penning them down, in such a way that the reader could appreciate the nuances of the subject, that would eventually lead to some of our intellectuals ,examining the issue in its entirety and determining a way ahead. It would be presumptuous on my part to assume, that I could put all the facts down, but am attempting to focus on the main issues, that I feel could be brought into our case. I would like to place on record, that I am in full agreement with the article written by Group Capt AG Bewoor, on 21 Mar 11, that was circulated on the IESM network.
Complications - OROP:
2. OROP, is not a simple issue, which has been further complicated by the recommendations of the Sixth Pay Commission, in a similar fashion as was done in the Fourth Pay Commission, when a vertical Pay Band, created ostensibly, to address stagnation in the ranks of Armed Forces officers, up to the rank of Brigadier, laid the cornerstone for denigration of ranks, within the Armed Forces. This happened, because Rank pay was introduced up to the rank of Brigadier but was subsumed from the replacement scale, instead of being given over and above the replacement scale (this is the famous Major Dhanapalan case for which a final decision is awaited from the Supreme Court). Furthermore, because Major Generals and above did not get Rank pay, those Major Generals who retired prior to the fourth CPC, found their pensions lower than that of a Brigadier, which was much later brought at par. Some justice.
3. The Sixth Pay Commission, introduced pay promotions, for the All India Services and the Organised Group A services, on a non-functional basis up to the HAG Grade, but did not consider it fit to extend this largesse to officers of the Armed Forces whose pay traditionally was at par with the Organised Group A services
Functioning of the Pay Commission:
4. I will not delve on why OROP is required. This aspect has been clearly brought out by Group Capt Bewoor. One aspect of his article however is worth mentioning and I will restate it. He, like all members of the Services Pay Cells, in the Sixth Pay Commission, always wondered why, the Pay Commission (and subsequently those same individuals, who continued to function in the Finance Ministry, after the Pay Commission was wound up) in examining the issues relating to Fauji's, came out with solutions, “crafted with deliberate cussedness and meanness". All Pay Commissions (3, 4, 5 and 6) had Armed Forces Pay Cells that interacted with the Pay Commission. Some to a greater extent and some to a lesser extent. I understand that in the Fifth Pay Commission, there was hardly any interaction. What was common in all cases, however, was the fact that the Armed Forces Pay Cells, had dedicated and competent Officers, who did their homework and in no time at all, could present their cases, or clarify issues to the Pay Commission.
5. The Pay Commissions were always headed by an eminent Jurist, but there was no opportunity given to the Armed Forces Pay Cells, to clarify issues or to defend themselves, during the proceedings, with him present. The whole exercise was carried out behind closed doors at the whims of bureaucrats in the commission. The Armed Forces were never informed of the devious methodologies being determined, that would always put them on the back foot. If they were, I am sure many of the anomalies could have been easily resolved, before the recommendations were finalised. The Sixth CPC even boasted, that for quicker decision making (and secrecy) their Officer complement was kept to a minimum. Their final recommendations, were given to the Armed Forces Pay Cells the night before the recommendations were placed in the public domain, at a dinner hosted by them, at the India International Centre. I am saying this, so that the reader can understand, why it was necessary for the Armed Forces Pay Cells, to try and get back what was denied in the first instance. Furthermore, as I already stated, the same individuals who crafted the Sixth CPC recommendations, were promptly appointed to the Finance Ministry, so that they could continue their mission to sidestep and deflect our objections, which they did with considerable success.
Unfinished agenda of the Sixth CPC:
6. In my first e-mail, I had mentioned, that there were two issues that bothered me the most and which were swept under the carpet. The first, concerned the status of Lt Colonels, who being in a higher Pay Scale compared to civil servants (equivalent to Commandant in the Para military services) prior to the Sixth CPC, were given a lower Grade Pay of Rs 8000, instead of Rs 8700. The second and equally vital issue was the introduction of a methodology to isolate the Service Officer from the largesse proposed for Organised Group A Officers. The latter, would ensure that during the currency of the Sixth CPC, almost all officers of the Organised Group A services, would cross the rubicon of Pay Band 4 and move to HAG, whereas 99% Service Officers will be stuck in Pay Band 4. Sadly, though the PARC had got the COSC approval (July 2008), to place on record the objections of the Armed Forces to the Government, this has not been progressed. This, if not ironed out, will have very serious consequences for the Pay equivalence and status of Armed Forces Officers in the future. It also means that the Civil Services have taken our lead and given unto themselves OROP, which is at the moment enjoyed by Lt Generals and above, who are placed in HAG and HAG+A mere 0.02% of the Officer cadre in the Armed Forces, vis a vis 100% of Officers from the Organised Group A services. I would also like to point out, that PARC had fought and brought Lt Generals (non C-in-C) into HAG. They were earlier also in Pay Band 4. Thus, within the same Pay Band, the difference in pay (Lt Col to Lt Gen), were the increments on account of length of Service and Grade Pay. For pensions for those who retired prior to 1 Jan 2006, the difference in pension between a Lt Colonel and Lt General was half the difference of Grade Pay. This changed only subsequently for Lt Generals (non C-in-C).
Pay promotions for IAS Officers and other
Organised Group A services on a Non-Functional basis:
7. The Govt have approved the recommendations of the Sixth Pay Commission, (Art 3.3.12, Page 174, of the Sixth CPC recommendations) which states, “The Govt. should consider batch-wise parity while empanelling and\or posting at Centre between respective batches of the IAS and other Organised Group A services, with the gap being restricted to 2 years. Whenever any IAS Officer of a particular batch is posted in the Centre to a particular grade, carrying a specific grade pay in PB 3 or PB 4, grant of a higher Pay Scale on non-functional basis to officers belonging to batches of organised Group A services, that are senior by two years or more, should be given by the Government”. Subsequently, the Govt. have also clarified that an Officer in the civil services, who has completed 5 years in the SAG grade will be given a pay promotion to the HAG scale on a non-functional basis.
8. In connection with the above, I would like to add that a Joint Secy to the Govt of India and a Major General equivalent, are SAG officers, but in protocol are higher than SAG officers of the Organised Group A services, who are not appointed to the post of Joint Secy to the Govt of India. This means, that an Organised Group A Service Officer, will attain SAG grade in 18 years (2 years astern of the IAS). He will not be equivalent to a Major General in protocol but would move up to the HAG grade (Lt General) on a non functional, pay promotion basis in 23 years, whereas a Brigadier if selected, is promoted to Major General in 32 years (SAG grade) and in most cases will retire in that grade. A mere 30% of Major Generals will attain HAG grade. The other Major Generals retiring in the SAG grade even though they may have completed 5 years of service in that grade. Is such a gross disparity acceptable to the Armed Forces?
9. The above provisions, made by the IAS for themselves and the Organised Group A services, will keep them laughing all the way to the bank, not only in their service career, but also in their retirement. These provisions facilitate them leap frogging to higher posts on a non functional basis, with the pay of higher posts, whereas the Armed Forces Officer stagnates in rank and at the end of it all, 99% will retire in Pay Band 4.The question is, how is it that pay promotions on a non functional basis, are within the realm of reasonability, when it pertains to the IAS and Organised Group A services, but is absolutely unacceptable for the Armed Forces. This disparity and bias I am sure, is without precedent anywhere in the world. One of the specious arguments used by the Finance Ministry is that, consequent to the AVS Committee report, Majors are promoted to Lt Colonel in 13 years, by time. How unholy an unorthodox, but are they able to explain how they have gone even further for the civil services in their proposals at Article 3.3.12. Is it an acceptable logic that IAS Officers are mature enough to attain the SAG grade in 16 years (maximum), whereas Armed Forces officers need 32 years to reach the same level?. Yet another oft repeated, half truth, is that Armed Forces officers are commissioned at the age of 20 years and IAS Officers join at 28 years. In other words, the Armed Forces Officer has to pay the price of qualifying earlier, after meeting the graduation criteria and also getting through the Services Selection Board and still losing out to the Organised Group A services Officer. What they conveniently gloss over, is that they enjoy a full career up to 60 years and beyond, whereas 99% of Armed Forces officers, retire between 54 to 58 years. Furthermore, the IAS lobby ensures that 90% of their kin continue to serve in various capacities in the Government up to the age of 65 and beyond. A case for raising the retirement age of Civil Government servants to 65 years is in fact being currently considered by the DoP&T.
10. One aspect, always brought out by the Finance Ministry, is that all those who joined the Civil Services, post 1 January 2004, will be governed by a New pension scheme that is self contributory, unlike the Armed Forces that continue to enjoy a pension scheme. First of all, nobody can say for certain, that there will be no change of policy in 2024. Secondly, this does not make martyrs of those who joined the Civil Services, before 1 January 2004 for which they need to give themselves fast track pay promotions and eventually the highest slab to retire from.
11. The following are the main reasons for OROP: -
• Giving the Armed Forces officer, the same pay promotions on a non-functional basis, as approved by the Govt, for the All India Services and the Organised Group A services (Article 3.3.12 of the Sixth CPC report).
• Reducing the disparity in pensions, between those who retire in the currency of a Pay Commission and those who retired earlier.
• Ensuring that an Armed forces officer is correctly compensated for his length of service and rank in which he retired (Comparable to the Organised Group A services).
• Rationalising the pension gaps between ranks, with special emphasis on those ranks in which a large number of officers retire (Major and Lt Col).
• Bridging the pension gaps, resulting from the skewed imbalance, caused by adjusting all ranks from Major General and below, within Pay Band 3 & 4. This is further compounded, as pre 1 January 2006 pensioners, are brought down to the minimum of the Band in which they retired and the difference in pensions being half the difference of Grade Pay.
• Addressing the issue of Armed Forces officers, stagnating below, Joint Secy level, due to their traditional rank structures and denying them pay promotions, at par with the changes invoked for the All India Services and Organised Group A services. This, despite the fact that successive Pay Commissions have ruled that parity needs to be maintained between the Armed Forces and the Organised Group A services.
• Stepping up (notionally) the pensions of Majors who retired in the previous pay commissions and who are now affected in their present pensions, which are based on 13 years of service, whereas these officers in the past had served at least 20 years before they took premature retirement.
• Protection to retired Armed Forces officers whose pensionary status has been reduced, consequent to Cadre reviews of the Organised Group A services, thereby upsetting the parity that existed at the time of their retirement (Status of a Lt Col, who retired prior to the Sixth CPC, was higher than a Commandant in the para military forces. There is thus no reason why, these officer’s pension should now be lower than a Commandant of the para military forces).
12. Consequent to adjustments, post the Sixth CPC report, the levels of pensions for various ranks in the Officer Cadre, as also family pensions, have been promulgated vide a MoD letter of 15 Nov 2010. These are indicated below –
Serial Rank Officer’s Pension Family Pension
(a) Lt (Army) Rs 13,500 Rs 8,100
(b) Capt (Army) Rs 13,850 Rs 8,310
(c) Major Rs 14,100 Rs 8,460
(d) Lt Col Rs 25,700 Rs 15,420
(e) Col Rs 26,050 Rs 15,630
(f) Brigadier Rs 26,150 Rs 15,690
(g) Major General Rs 26,700 Rs 16,020
(h) Lt General Rs 36,500 Rs 21,900
(j) Army Commander Rs 40,000 Rs 24,000
(k) Army Chief Rs 45,000 Rs 27,000
13. The table indicates qualifying service from 10 years to 30 years and the amount of pension indicated is inclusive of the Rank weightage admissible that varies from 9 years for Lt (Army) to 3 years for a General.
Service required for maximum pension:
14. Pension in a rank, varies depending on the length of service that plateaus at different levels, depending on the Rank in which the Officer retired, as shown below
(a) Lt to Capt (Army) 24 Years
(b) Major 25 Years
(c) Lt Col (TS) 28 Years
(d) Lt Col (Select) 26 Years
(e) Col (TS &Select) 26 Years
(f) Brigadier 28 Years
(g) Major General 30 Years
15. From the above it is obvious, that the Pay Band structure coupled with a methodology of adjusting pensions at the minimum of the Pay Band in the subsequent Pay Commission is designed to cause dissatisfaction in the Armed Forces, but is perfectly suited to the changes invoked by the Sixth CPC for the AIS and Organised Group A Services, where officers will stagnate (if this is the correct term) at the highest levels, all crossing the HAG barrier, whereas, in the Armed Forces 99% officers will stagnate in Pay Band 4.
Fault lines in the pension structure:
16. These are indicated below-
• The difference of pension of a Lt Col ( Select) who retires after 26 years of service is only Rs. 1,000 less than a Major General with over 30 years service
• The difference in pension between a Col (Battalion Commander) and a Brigadier (Brigade Commander), who retired before 1 Jan 2006, is Rs 100. (3 cone ice-creams or one bottle of rum and a packet of Lays)
• The difference in pension between a Lt Col and Brigadier, who retired prior to 1 Jan 2006, is Rs 450. And the rank of Brigadier is attained after an officer qualifies two promotion Boards.
• Artificial gulfs have been created between Majors and Lt Colonels (Rs 11,600) and also between Major Generals and Lt Generals, non C-in C (Rs 9,800). The question is whether the convenience to adhering to artificially created barriers is logical and acceptable.
• For ranks at the bottom of the scale (PB - 3 and higher), the pensionary awards are reasonable i.e. in the ranks of Lt (Army), Lt Col, Lt Gens and above. Offcourse as brought out earlier, the Armed Forces need to press for an enhancement of Grade pay of Lt Col from Rs 8000 to Rs 8700,which was a faulty and arbitrary dispensation, when it became inevitable for the Govt to bring Lt Col's to Pay Band -4.
• For ranks not mentioned above, the pensionary awards should have been spaced out more evenly for pensions. In this connection, the Sixth CPC found no difficulty in creating four Pay Bands above the SAG scale i.e. HAG, HAG+, Secy to the Govt of India and Cabinet Secy scales. However, they only devised a single scale below SAG, which has caused so much heart burn in the Armed Forces, since 99% officers currently retire in that scale, as against 100% IAS officers who go up to the Apex scale.
Recommendations on OROP:
17. In my opinion, on first principle, the Armed Forces Officer, must be given the same benefits sanctioned by the Govt for officers of the organised Group A services, as successive Pay Commissions have ruled that, there should be pay parity between officers of the Armed Forces and the Group A services in general and the Indian Police, in particular. Even the Sixth CPC, have not made any comment to the contrary. Further, this needs to be done, immediately, as there is no justification whatsoever, for stymieing pay progression of an Armed Forces officer, on a non- functional basis(not linked to the extant rank structure) for pay enhancement up to the HAG level. It is only then that we can achieve a true OROP. Since this is an acceptable principle for the AIS and the Organised Group A services, there is no rationale for excluding Armed Forces Officers from this scheme. Ofcourse, it will actually benefit officers who will retire in the future, yet it will have to be taken into account, for pension fixation for those who retired before the next CPC. It may be relevant to point out that Lt Gens(non C -in C ) were placed in PB -4,by the Sixth CPC, but were subsequently raised to the HAG + scale after hardnosed negotiations, notwithstanding the fact that they were not in this scale, when they retired. Hence there is no reason, why Colonels and Brigadiers cannot also finally attain the HAG grade prior to retirement. This will only place them at par with their counterparts in the Group A services. Furthermore, a precedent exists in the fifth CPC, where Brigadiers owing to Rank Pay, drew more pension than a Maj Gen.
18. I believe that the dividing line for promotions in the Armed Forces is extremely fine and with promotional posts so limited, even outstanding Officers are not promoted, due to deep selection. We therefore cannot lose this opportunity of also taking Colonels and Brigadiers to the HAG scale, on a non - functional, pay promotion basis. In the Armed Forces, the rank and command structures are well defined and understood. Even today, a Colonel serving in the glacier or, a Capt(Navy) from the Aviation or submarine arms, would draw more pay in real terms than a Maj General or a Rear Admiral from the the general service. But that does not dilute the command structure. Yet, I know that there will be some reservations amongst the top management of the Armed Forces to accept this, whose doubts will be fuelled by those in the Finance Ministry. However could those at the helm of the Finance Ministry, then explain their actions with regard to the assured career progression from Pay Band -3, up to the HAG scale, for themselves and also for the Organised Group A services? My biggest fear is that if this anomaly is not corrected, then in the next Pay Commission, these differences will be fully exploited to further dilute, the status and pay of Armed Forces officers. This therefore requires immediate correction.
19. Notwithstanding the above, we need to also readjust pensionary benchmarks, for our retired fraternity, so that the differences in pension compensate a retired officer meaningfully, for his length of service and rank, in which he retired. Also, protecting the officers who retired, before changes in the time spent in the lower ranks was reduced, post the AVS Committee report. The methodology, of bunching various ranks and bringing them down to the minimum of the Pay Band, is clearly unsuited to the Armed Forces. Horizontal bands or striations are necessary and desirable. Taking into account the table at para 12 above, the following minimum pensions are suggested:-
(a) Lt (Army) Rs 13,500.(No change, as an officer who retired in this rank, would have spent, only 3-4 years, as a commissioned officer)
(b) Capt (Army) Rs 16,500. (As an officer in this rank would have spent 11 years as a commissioned officer)
(c) Major - Rs 19,500 (An officer who retired in this rank, would have at least completed time for pension i.e. 20 years)
(d) Lt Col - Rs 25,700. (No change, as this pension is given to a Lt Col, who has completed 26 years of service)
(e) Brigadier Rs 31,500. (An officer who retired in this rank, even prematurely, would have completed at least 32 years of service)
(f) Major Gen - Rs 33,500. (This pension is recommended as less than 1% of Armed Forces officers attain Flag Rank)
OROP -Other Ranks:
20. In this paper, I have not discussed this subject, as there are many other factors that are quite different as compared to Officers. Firstly their careers are truncated to a far greater extent. Secondly, although their pensions are decided at the top of the scale in which they retired, even with the assured career progression approved by the Sixth CPC, they may not be able to get the third pay promotion before they retire, unlike civil servants. Consequent to the Sixth Pay Commission awards, there were positive changes made to the modified assured career progression methodology for civilians that have so far not been made applicable to the other ranks of the Armed Forces. This is therefore a subject that needs to be considered separately, which will follow in a subsequent article.
21. This paper seeks to bring out issues that, if not corrected, will result in a sense of despondency and disillusionment amongst the officer cadre of the Armed Forces. The Armed Forces officer does not desire more compensation, either in his service career or after his retirement. He just wants, what justifiably should have come his way, without having to fight for his rights. Lowering of his status and thereby his pay, without a valid reason, cannot help keep his morale high. Unfortunately the Armed Forces have never shown the resolve they display in battle, as do when it comes to matters pertaining to their pay and perks. This is all the more reason, why they should be treated with the respect that is their due.