How Will New Pension Formula Work, for Military Men?

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Brig Narinder Dhand

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Jul 27, 2017, 4:31:24 AM7/27/17
to SK Jain, Ram Prakash Mishra, Sivasankar Vidyasagar
Dear Maj SK Jain,
 
Please pardon me for making this request to you and the community.
May I request you all to kindly address your self with Rank so that
we know that we are communicating with our fellow veterans and
not any Riff Raff. I am sure that we are proud of being from the
Indian Armed Forces. We are what we are today because of our service
with the Forces, happily living without any worries of the next day.
 
7th CPC Pension Formulae - You are right, only those officers who
retired from 01 Jan 2014 onwards will get benefitted to some extent.
You can make a rough calculation taking the example of a Brig retired
on 02 Feb 2014 his last pay drawn was 63170+8900+6000=78070  as such
basic pension fixed at 39635 (50% of 78070).
 
This amt is more than what the pre 2016 Brigs with full service who  
got fixed at Rs 37370 on implementation of OROP. (Sr Jr Pension ??)
 
The said offr is getting 7th CPC pension of 39635X2.57= 101862.
 
However on Notional pay fixation method he will be fixed at 193300
under 13A (Stage 12) of the matrix as such his pension will be
Rs 104375 wef 01 Jan 2016 an increase of Rs 2513 in basic.
Please check these calculations by applying the formulae and the
7 CPC Matrix for Mil Officers.
 
If you apply the Notional Pay Fixation formulae for Pre- 2014
retirees the end fig will work out less than the current pension
they are getting in 7th CPC.
 
This has adequately been explained on my web post in my site.
 
Best wishes
 
ब्रिगेडियर_नरेन्द्र_ढंड
Brigadier Narinder Dhand.
NOIDA -(NCR) - 201303
CLICK - http://signals-parivaar.blogspot.in
 
From: SK Jain
Sent: Monday, 24 July, 2017 5:59 PM
Subject: Re: [MilitaryVeterans] How Will New Pension Formula Work? [1 Attachment]
 
My Dear AVM Mishra Sir,
 
There appears a possibility that the Officers who have retired during the currency of 6cpc (including retirees of 2014 and 2015) may be benefitted by modified option 1.
 
Warm Regards,
S K Jain
 
On Mon, Jul 24, 2017 at 5:52 PM, Ram Prakash Mishra <avm...@gmail.com> wrote:
Dear Brigadier Dhand, I had written to all Maj Gen and equivalent in my mailing list that we shall continue to
get VII CPC existing pension, modified option 1 would not affect our pensions.
Regards
Veteran AVM RP Mishra
On Monday 24 July 2017 05:03 PM, Brig Narinder Dhand wrote:
Dear AVM Mishra,
 
 
1. C 164 is based on DOP&PW lletter which is att to the circular. In case OROP
is not taken  as our last pension drawn  as for Pre 2016 retirees  then it confirms my contention that we
will continue getting the current 7CPC pension.
 
Pl try to calculate your notional fixation for 7CPC based on your last pay as in your PPO using tables for
5 and 6 CPCs given in my  blog post you will then see the validity of my statement as in my last mail.

Brig Narinder Dhand (Veteran)

On 24-Jul-2017, at 12:31 PM, Ram Prakash Mishra <avm...@gmail.com> wrote:

Dear Brigadier Dhand, extract of GoI letter in respect of civil employees, as mentioned in PCDA circular C-164 is given below.


Revised pension/ family pension in r/o all Defence Civilianpensioners/family
pensioners who retired/ died prior to 01.01.2016, may be revised by notionally fixing their pay
in the pay matrix recommended by the 7th CPC in the level corresponding to the pay in the pay
scale/pay band and grade pay at which they retired/died. This will be done by notional pay
fixation under each intervening Pay Commission based on the Formula for revision of pay.
While fixing pay on notional basis, the pay fixation formulae approved by the government and
other relevant instructions on the subject in force at the relevant time shall be strictly followed.
50% of the notional pay as on 01.01.2016 shall be revised pension and 30% of this notional
pay shall be the revised family pension w.e.f. 1.1.2016.
Please note the word s "Retired/died". My view is that OROP pension can not be considered for
application of modified option 1. It has to based on the pay/pension at which one retired based on
original pension mentioned in PPO.  Whichever is higher, PPO pension or pension as calculated as
per modified option 1 will be revised pension wef 01-01-2016.
Regards
Veteran AVM RP Mishra
On Monday 24 July 2017 10:56 AM, Brig Narinder Dhand wrote:
dear maj Jain,
 
If you work with the last pay drawn formulae the fixed pensions for all ranks will be far below
the current pension of OROP X 2.57. 
 
Since your current pension cannot be reduced you will continue what u are getting now. But
if OROP is taken as your last pension as in 2013 we may gain by one or two thousands.
 
This has been adequately been explained in my blog post supported with calculations.

Brig Narinder Dhand (Veteran)

On 24-Jul-2017, at 10:26 AM, SK Jain <major...@gmail.com> wrote:

My Dear Brig Vidyasagar Sir,
 
I am trying to explain my views as under (though I may or may not be correct):
  1. Only one formula (for fixation of pension based on notional pay fixation) has been approved by Cabinet. This formula works based on the last drawn pay of a pensioner. This formula can not be implemented in two different manners - one for civilian pensioners and one for military pensioners (which will require approval of cabinet). 
  2. OROP is a completely different pension policy applicable to military pensioners. I think that new pension formula will not be integrated with OROP and OROP will remain a different pension policy for military pensioners. In my opinion, military pensioners will be required to opt either for OROP or for new pension formula.
It is learnt that a team of PCDA (P) Allahabad is working with MoD to prepare  pension tables based on new pension formula. I think that final letter may be issued shortly clarifying the situation.
 
Warm Regards,
S K Jain
 
On Mon, Jul 24, 2017 at 7:13 AM, Sivasankar Vidyasagar <csvidy...@gmail.com> wrote:
Dear Maj SK Jain,
    Your explanation of fixation of pension by Notional Pay method as in Jan 2016 is absolutely correct for civilians. Since the pension in subsequent pay commissions is at the minimum of  pay in the fitment table, the method you suggested is correct.
   But for us the defence pensioners, fortunately due to OROP, our pensions are fixed  on the basis that we all are deemed to have retired in calendar year 2013 and our pensions have been fixed taking average of pension of Maximum and Minimum of our ranked person with our length of serivce. The pension in Calendar year of our rank and length of service is 50% of average of last pay drawn and not at the Minimum of Pay in the Fitment Table.
  Therefore, in my view, the method you suggested or DOPW is not applicable to Armed Forces pensioners.
     The Major's pension is dependent upon his length of service in OROP. Longer the service higher is the pension. Therefore all Majors should not get the same pension. Though CGDA took path of least resistance and showed pension of Majors of length of service in 2013 ranging from 22 to 33 years at Rs 23,815 in OROP on the plea that no Major with that kind of service retired in 2013 due to AVS Committee (all Majors with 13 years' service get promoted as Lt Col w.e.f Dec 2014). But they forgot we have SL officers and SCOs who could retire in varying lengths of service as they get promoted as Officer after putting in 15 to 20 years service as OR. I can not believe no major with service of 22 to 33 years from all three services (Army, Navy and IAF) did not retire in calendar year 2013 with service of 22 to 33 years.
  Even if one has not retired in the service bracket of 22 to 33 years of service, the method of pension fixation adopted by CGDA is incorrect. The pension of Major with less service is reduced from Major with longer service (found to have retired in 2013) by 3% for every year but the same method of pension fixation was not done for Major with longer service by adding 3% to every year to pension of Major with lesser service who was found to have retired in 2013.
   This mail is to just to force you to examine my rationale and come out with pitfalls in my argument.

regards,
Brig CS Vidyasagar (Rtd)
040-48540895
  
 
On 14 May 2017 at 10:29, SK Jain major...@gmail.com [MilitaryVeterans] <MilitaryVeterans-noreply@yahoogroups.com> wrote:
 
[Attachment(s) from SK Jain included below]
Dear Sirs,
 
DOP&PW has issued orders for new pension formula for pre-2016 retiree civilian pensioners (copy attached). This formula will work as under:
  1. Last Drawn Pay of a Pensioner and the pay commission during which the Pensioner has retired, will be taken into consideration. Both these details are available in PPOs.
  2. Last Drawn  Pay will be notionally fixed as on first day of all subsequent pay commissions up to 7th pay commission.
  3. 50% of his notional pay in 7th pay commission will be the basic pension of the pensioner.
  4. The above calculation will be done by Pay Disbursing Agencies (PCDA (O) Pune in case of Army Officers).
  5. Pay Disbursing Agencies will forward Last Pay Certificate under 7th CPC to Pension Sanctioning Authority (PCDA (P) Allahabad in case of Army Officers) for issue of Corr PPO wherever required.
I will try to explain the above with an example. I take the example of a Major who retired during 1995  with last basic pay of 3800 (in integrated pay scale of 2300-5100) and a rank pay of 600. His notional pay fixation will move as under:
  1. His pay will be fixed as on 01 Jan 96 in 5th cpc pay scale of Major ( 11600-325-14850). We assume that his basic pay gets fixed at 11925 (plus rank pay of 1200) as on 01 Jan 96. His total basic will be treated 13125.
  2. Now, his pay will be fixed as on 01 Jan 06 under 6th cpc pay band - 3 (15600-39100). Under 6cpc his 5cpc basic pay of 13125 will be multiplied by 1.86 and his 6cpc basic pay will work out to 24420 (rounded off to next ten rupee) plus Grade pay of 6600. His total basic will be 31020.
  3. Now, his pay will be fixed as on 01 Jan 16 under 7th cpc pay matrix (69400-125200). His 6cpc basic pay of 31020 will be multiplied by 2.57 and fixed at appropriate stage of pay matrix (31020 x 2.57 = 79722). Hence his basic pay will be fixed at 80400.
  4. MSP of 15500 will be added to 80400 (total 95900). 50% of this figure will be his basic pension as on 01 Jan 17 which works out to 47950. 
Calculation of notional pay under 6th cpc and 7th cpc is comparatively easier because pay fixation is to be done on a multiplication factor of 1.86 and 2.57 respectively. Pay fixation method in earlier pay commissions was complicated.
 
Warm Regards,
S K Jain
 
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