Saturday, September 14, 2013



Random Musings

What is Pension?

Pension is a token of gratitude for long loyal services rendered.

Pay is a salary or remuneration or compensation for work done.

Therefore, pay is linked to the work you do.

In contrast, you get pension after you stop working and retire.

You do not get pension when you are working.

This is because pension is a token of gratitude for the dedicated services you have rendered by working for an organization for many years.

Hence, by this very basic premise, pension must be linked to years of service.

Length of service should be the basic criterion for deciding the amount of pension.

With this as a backdrop, please answer this hypothetical question:

Who should get more pension:-

A Colonel who has loyally served the army for 33 years and retired on attaining the age of superannuation and is wholly dependent on his pension for subsistence?


A Brigadier who has quit the army after 20 years to take up a lucrative second career?

The answer is obvious.

But, unfortunately, the Brigadier will get more pension than the Colonel if we were to follow the “One Rank One Pension” concept

(And in addition to his pension, the Brigadier will get a handsome salary for his second job as well).

As we discussed earlier, by its very definition, pension must be linked to years of service and not to rank.


This “One Rank One Pension” or OROP issue is peculiar to the defence forces and the root cause is due to the following reasons:

1. Poor Promotion Prospects due to steep pyramidal hierarchical structure. Most officers stagnate at lower ranks till retirement and very few reach higher ranks.

2. Subjective ACR based Promotion System due to which many deserving officers are passed over for promotion. Subjectivity breeds sycophancy and cronyism since juniors feel that promotions are made on the whims and fancies of senior officers who write their ACRs. During my time in the navy, I observed that it is very rare that an officer is superseded due to incompetence. In most supersession cases, professionally capable officers miss their promotion due to one or two low ACRs as a result of an ego clash or difference of opinion or personality mismatch with their boss. The large number of promotion-related grievances, complaints, representations, litigations and court cases bear testimony to the weaknesses and subjectivity of the Military Promotion System.

3. Early Retirement Ages (linked to rank) due to which most officers retire in their mid 50’s (at 54 and 56) and most soldiers retire in their 30’s. Thus, supersession is a double misfortune – firstly, your career suddenly reaches a dead end at a comparatively young age, and secondly, you retire early and are denied 6 years service as compared to your civilian counterparts who retire at 60 (for soldiers it is even worse).

4. Pay being linked to Rank (after the integrated pay scale was mysteriously abolished in the 1990s) and consequently pension being linked to rank at the time of retirement which leads to great disparity in pension even though two officers may have rendered the same years of commissioned service.


The civil services have mitigated these problems by implementing a number of initiatives like:

1. “Assured Career Progression” (ACP) which ensures good promotion prospects (much better than the Defence Services).

2. “Non Functional Upgradation” (NFU) which ensures parity in pay with your peers even if you are not promoted.

3. Retirement at 60 years of age for all.

Owing to this equitable system of pay and pension in the civil services, two IAS officers of the same batch who retire at 60 on attaining the age of superannuation will roughly get the same pension, whereas in the Armed Forces two officers of the same course will get vastly different pensions depending on their ranks at the time of retirement.

This is grossly unfair since, after retirement, the needs of all officers are the same and pension is the only source of income.

As I had said earlier, pension is a token of gratitude for long services rendered and it is logical that the longer you serve the more must be the amount of “gratitude”.

Hence, a Brigadier who has quit the army after 20 years for greener pastures to take up a lucrative second career certainly does not deserve higher pension than a Colonel who has loyally served the army for 33 years.

The drawback of the inequitable “One Rank One Pension” (OROP) concept is obvious and it seems that the persons who will benefit the most from OROP are Senior Officers, especially the Generals, Admirals and Air Marshals.


What are the solutions to ensure fair, just, transparent and equitable pension for the Defence Forces?

There are many options. Here are a few options that come to my mind:

1. Compute pension exclusively based on years of service (delink pension from rank at the time of retirement) – “Equal Service Equal Pension” (ESEP)

2. Re-introduce the Integrated Pay Scale Concept. This will automatically delink rank from pay, which will be computed based on years of service. Once rank and pay are delinked, your last pay drawn will depend on years of service and pension will be computed accordingly.

(In order to alleviate the problem of career-stagnation due to poor promotion prospects in the defence services, the 4th Pay Commission introduced an Integrated Pay Scale (Running Pay Band) upto the rank of Brigadier and equivalent. This concept had worked very well and should have been extended to senior ranks upto General. This Running Pay Band Scheme, introduced by the 4th Pay Commission, was truly an excellent concept. Since the Integrated Pay Scale was de-linked from rank it offered equitable prospects to all officers and offered a recompense to those who could not be promoted due to lack of vacancies (owing to the steep hierarchical pyramid) but continued serving the nation. This excellent Running Pay Band Concept (in lieu of Assured Career Progression) was mysteriously abolished by the 5th Pay Commission for reasons that are inexplicable and unfathomable. If this Integrated Pay Scale concept is brought back, then pension will be rightly decided on years of service (and not on rank attained) and this will automatically obviate the need for one-rank-one-pension).

3. Introduce “Assured Career Progression” (ACP) and “Non Functional Upgradation” (NFU) concepts and increase the retirement age to 60 uniformly for all, as prevalent in the civil services.

4. Implement the National Pension Scheme (NPS) in the Army, Navy and Air Force (NPS has already been implemented for all Civilian Government Employees since 2004). NPS will also enable Short Service Commission (SSC) Officers to get pension. Of course, NPS will be applicable to future officers.


I feel that, of the above three options, the first option to delink pension from rank and compute pension exclusively based on years of service is the best option.

Length of service will be the basic criterion for computing the amount of pension, irrespective of rank.

It will be easy and uncomplicated to implement.

You just need a simple table specifying the pension vis-à-vis years of service.

This table can be revised from time to time depending on inflation or at each pay commission.

The updated current table can be used for all pensioners, recent and past.

So it does not matter when you have retired, since the latest promulgated pension table will be applicable to you.

So, irrespective of the year in which you retired, and irrespective of your rank at retirement, you will get pension as per the current table based on the years of service you have rendered in the Defence Forces.

Thus, instead of “One Rank One Pension” (OROP) you will have “Equal Service Equal Pension” (ESEP)

This permanent solution will eliminate the need for constant bickering and pleading with the government.

I feel that the “one-rank-one-pension” concept is not an equitable concept since it is not fair to the vast majority of defence officers, and it seems that “one-rank-one-pension” (OROP) will benefit senior officers much more than others.

In my opinion, “EQUAL SERVICE EQUAL PENSION” (ESEP) is a much better idea than “ONE RANK ONE PENSION” (OROP)

This will benefit everyone, instead of a select few.

Copyright © Vikram Karve 
Vikram Karve has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this book review. 
© vikram karve., all rights reserved.

All stories in this blog are a work of fiction. The characters do not exist and are purely imaginary. Any resemblance to persons, living or dead, is purely coincidental.
No part of this Blog may be reproduced or utilized in any form or by any means, electronic or mechanical including photocopying or by any information storage and retrieval system, without permission in writing from the Blog Author Vikram Karve who holds the copyright.
Copyright © Vikram Karve 2013 all rights reserved

No comments: