Flaws in OROP concept – Ranson

Flaws in OROP concept – Ranson

The concept of One Rank One Pension (OROP) is to bridge the gap between the rate of pension of the current pensioners and the past pensioners, and also future enhancements in the rate of pension to be automatically passed on to the past pensioners. In armed forces, equality in service has two components, namely, rank and length of service.

Hence, two armed personnel in the same rank and equal length of service should get same pension irrespective of date of retirement and any future enhancement in rates of pension be automatically passed on to the past pensioners. The proposal per-se sounds legitimate and reasonable but seems to be lopsided and without much merit.

The OROP concept has been developed with respect to the basic pension and not the residual pension. The pension has two components viz.(a) Basic Pension (b) Residual Pension or better known as monthly carry home pension after deduction of commuted portion of pension. The basic pension is fixed with respect to the last basic pay drawn.

The residual pension is the sum total of basic pension plus dearness relief minus commuted portion of pension. Whatever may be the basic pension but what it matters to a veteran is his monthly carry home pension or residual pension. Therefore the residual pension should be more important and relevant than the basic pension to a veteran.

Hence the concept and approach of OROP with respect to basic pension needs to be changed to remove the basic flaw and more emphasis to be given to the Residual Pension. This will ensure that all veterans of the same rank and seniority irrespective of their date of retirement are given the same rate of monthly residual pension.

After the implementation of 6 CPC in 2006 the veterans retired post 2006 got higher basic pension as compared to pre-2006 veterans. Though post 2006 veterans got higher rate of basic pension but it did not render them higher rate of residual pension (monthly carry home pension after deduction of commuted portion). As a matter of facts, the pre-2006 veterans who are drawing less basic pension than the veterans of post 2006 are in receipt of more residual pension than post 2006 veterans.

This is nothing but true and no pre-2006 veterans would dispute it. But, somehow, the argument for OROP was developed on the basis of all veterans with same rank and seniority must be given same rate of basic pension without realizing that same rate of basic pension for all pre-2006 and post-2006 veterans will vitiate the existing financial parity and unnecessarily tilt the balance to give undue advantage to pre-2006 veterans without any rhyme or reason.

In the existing system old veterans (pre-1.1.2006) are already drawing more residual pension (monthly carry home pension after deduction of commuted portion) and any sort of upgradation in basic pension to them will not only lead to widen the gap and enable the past veterans to get more residual pension than the post 1.1.2006 veterans but also put all post-2006 veterans in great financial loss for no rhyme or reasons. The following two live examples will prove the above point:-


Unknown said…
It happened because post 2006 retiree had already drawn a lumsum amount in the form of commutation.
Unknown said…
It happend,because the commutation portion is more than past retirees.
Anonymous said…
When the topic is under the care of !!! Judicial Committee!!! we need to wait for the findings, which is likely to take about six months.Hence no comments beyond the present status...

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