7th CPC Pension Calculation : One Rank One Pension for the pensioners cannot be justified

7th CPC Pension Calculation : OROP for the pensioners cannot be justified

One of our reader Mr.GS Joahi writes to us regarding the pension calculation recommended by the 7th Pay Commission with an illustration as follows…

The commission recommends the following pension formulations for all pensioners who retired prior 01.01.16 :- First – All the personnel who retired prior 01.01.16 shall be fixed at pay matrix being recommended by the 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. The amount shall be raised to arrive at the notional pay of the retiree by adding number of increments he/she had earned at that level while in service at the rate of three percent. Fifty percent of total amount so arrived at shall be the revised pension.

“This is totally injustice because the length of service which individual served in his previous levels are not considered. For example X&Y persons completed same length of service and retired in the year of 2000. The person of X retired from 4600 grade pay (level 7) where he earned 12 increments from his last level. The person Y promoted frequently and his last promotion got just before one year of his retirement and he retired from 5400 grade pay (at level 10) where he earned only one increment at this level. As per the VI pay commission the pension of X is fixed at Rs.8250/- and the pension of Y is fixed at Rs. 10500/-.”

On the basis of VII pay commission recommendations the pension of both person are calculated as follows :-

The pension of X Person

Formula No. 1

6th pay commission basic pension – Rs.8250/-

Initial basic pension fixed using a multiple of 2.57 – Rs.21203/-

Formula No. 2

Retired at the minimum of the corresponding level in the matrix – Rs. 44900/-Individual earned 12 increments at that level while in service – Rs.64100/-

Revised Basic pension – Rs.32050/-

The pension of Y Person

Formula No. 1

6th pay commission basic pension – Rs.10500/-

Initial basic pension fixed using a multiple of 2.57 – Rs.26985 /-

Formula No. 2

Retired at the minimum of the corresponding level in the matrix – Rs. 56100/-

Individual earned 01 increment at that level while in service – Rs 57800/-

Revised Basic pension – Rs.28900/-

On the above example OROP for the pensioners can not be justified without considering the service render at his previous levels during his service. There are a lot of cases where individual promoted at higher ranks at the time of retirement where they served only for one, two or three years of service. In the above case the person who was not promoted and served more service at lower level are more beneficial than the person who are promoted and retired from higher level.

Even the pension of the person retired from higher level can not be cross the pension of person who’s pension will be fixed by OROP, if higher level retiree initial basic pension fixed using a multiple of 2.57