Wednesday, December 7, 2016

IMPORTANCE OF OPTION 1 OF 7TH CPC FOR REVISED PENSION - BIG LOSS IN PENSION IF IT IS DENIED - By N P MOHAN, President, RSCWS

Tuesday, 6 December 2016

Most of the Pre 2016 pensioners will suffer heavy loss in Revised Pension, if the Option 1 recommended by the Seventh CPC is denied to them.

It was after 20 years that 7th CPC recommended parity between past pensioners and those retiring after 1-1-2016 under Option 1 which means consideration of increments earned while in service as detailed in Para 10.1.67 of the Report. This objective of PARITY (Recommended by Commission after examining all factors in depth in Chapter 10) is fulfilled only with the implementation of option 1 without any dilution/deviation. Non implementation of option 1 on the plea of non availability of record in a few cases will have the following adverse effects:

i) Pre 2006 pensioners, in particular, who are victim of modified parity will suffer a much bigger loss compared to the post 2006 retirees because in their case the basic pension which is multiplied by 2.57 in the interim phase takes into accounts their increments before retirement. This aspect has been examined in the case of Pre & Post S 19 pensioner as an example. From the Table 1 given below, it will be clear that the reduction in pension for post 2006 pensioner is of a uniform small magnitude as compared to the loss increasing exponentially with each increment lost in case of pre 2006 pensioner. Similar is the case in other scales also

ii) 7th CPC has considered pre 2016 pensioners as one homogenous group (Para 10.1.53 refers). It means that all pre 2016 pensioners have to be treated alike. But with denial of option 1, pre 2016 pensioners will get divided into two groups i.e. Pre 2006 and Post 2006 Pensioners - which violates the settled law of equality between the equals.

iii) In many cases, Option 3 gives much lower pension compared to option 1 recommended by 7th CPC. This will be clear from Table 2 below. Where a comparison has been made between two options.

Encls: 2 Tables
TABLE- 1 SHOWING LARGE REDUCTION IN REVISED PENSION OF
PRE-2006 PENSIONERS COMPARED WITH POST-2006 PENSIONERS
 IF OPTION 1 IS DENIED ILLUSTRATIVE EXAMPLE OF 
LEVEL 11 (Scale S 19 - PB3)

POST 2006 PENSIONER
PRE 2006 PENSIONER






Incre-ments




Pay 
 with incre
ments @ 3% pa


Corres
ponding Existing pension
(col. 2/2)



Re
vised pen
sion with MFof 2.57


Pen-sion for
L 11 
as per matrix table


Redution 
 in 
pen
sion 
with 
denial
 of 
Option
 1 
(col 5-4)



Revi
sed pen
sion with MF 
of 2.57
Redu
ction 
 in pen
sion 
with denial 
of 
Option 1 
(col 5-7)
1
2
3
4
5
6
7
8
0
25200
12600
32382
33850
1468
32382
1468
1
25956
12978
33353
34850
1497
32382
2468
2
26735
13367
34354
35900
1546
32382
3518
3
27537
13768
35385
37000
1615
32382
4618
4
28363
14181
36446
38100
1654
32382
5718
5
29214
14607
37540
39250
1710
32382
6868
6
30090
15045
38666
40450
1784
32382
8068
7
30993
15496
39826
41650
1824
32382
9268
8
31923
15961
41021
42900
1879
32382
10518
9
32880
16440
42251
44200
1949
32382
11818
10
33867
16933
43519
45550
2031
32382
13168
11
34883
17441
44824
46900
2076
32382
14518
1. From the above table it will be clear, that pre-2006 pensioners, as victims of Modified Parity will stand to lose more in pension compared to post -2006 pensioners if Option 1 of counting increments is not accepted by Govt. 

2. The loss in pension for post 2006 pensioners is in the range of Rs.1700 (from 1468 to a max of 2076 as per col. 6) only and is nearly constant , whereas for pre-2006 pensioners the loss in pension increases by almost Rs.1000/- for every one increment (Refer cols. 6 & 8). 3. For example, the loss suffered in pension of pre 2006 pensioner in losing 5 increments works out to 6868 as against 1710 for post 2006 pensioner. 

N. P. MOHAN 29-9-2016


TABLE 2 SHOWING REVISED PENSION OF SCALE S 29-PB 4
 (LEVEL 14) PENSIONERS OF 4th CPC REGIME WITH & 3RD
 OPTION BASED ON NOTIONAL PAY OF SUCCESSIVE 
PAY COMMISSIONS 

(Para 5 of minutes of meeting held on 6th October, 2016) vs OPTION 1 BASED ON INCREMENTS EARNED







Pay
 on retire
ment






Noti
onal pay-5th CPC




Notional 
 pay-6th CPC
(Fitment table-6th CPC)



Notional 
 pay-7th CPC
 with 
MF OF 2.57-
3rd option
(col.3 xMF)
Operative 
 Pay 
of col.
 4 in 
the 
next 
cell of 
pay matrix
(MOF OM dt 25-7-2016)




Pay 
 based on option
 1 with incre
ments
 ( as per pay matrix)





Pension 
 as per option 3
(col.5/2)





Pen
sion as per option 
1
(col.6/2)
Loss of 
Revised pension 
if Option 
1 is not 
given 
Diffe
rence between 
Option 1 & 3)(col.8-7)
1
2
3
4
5
6
7
8
9
5900
18400
54700
140579
144200
144200
72100
72100
0
6100
18400
54700
140579
144200
148500
72100
74250
2150
6300
18400
54700
140579
144200
153000
72100
76500
4400
6500
18900
56050
144049
144200
157600
72100
78800
6700
6700
18900
56050
144049
144200
162300
72100
81150
9050
6900
18900
56050
144049
144200
167200
72100
83600
11500
7100
19400
56050
144049
144200
172200
72100
86100
14000
7300
19400
56050
144049
144200
177400
72100
88700
16600
NOTE: 1.3rd Option is not suitable at all. The loss in pension is clear from col. 9. 

2. Notional pay in 6th CPC in col. 3 has been taken from the Fitment table issued by MOF (DOE) on 30-8-2008. 

- Compiled by: N. P. MOHAN 24-10-2016

Related Posts

http://www.staffportal.in/2016/12/importance-of-option-1-of-7th-cpc-for-revised-pension.html )


1 comment:

  1. A most simple way of Pension party to all Defence Personnel irrespective of their year of retirement can be done with combining the OROP and the Option 1 of the 7CPC matrix if the method given in "sunlit Blog" is followed. Here the number of increments come in to play and rank anomalies are eliminated wherever confusion arises due to changes in number of year to attain some ranks at lower end.


    Details are at the following site:

    http://sol-dozdoz.blogspot.in/2016/09/some-notions-of-progression-for-pension.html?m=1

    There are a few blogs which must be made official reference material in the 'Government Circles' in the MOD which make so called 'logical blunders' at the decision making end. The 'sunlit' is one of them, with ample labels on different heads and explains in simple words and fails not to confuse the subject. Hope somebody in the authority come across this blog and take cues from time to time.

    ReplyDelete