OROP extended to Central govt employees

Big bonanza: Pay Commission suggestions to cost exchequer Rs 33,700 crore

Civilian employees, paramilitary personnel and soldiers may have something more to cheer once they retire with the Seventh Pay Commission recommending ‘One Rank, One Pension’ for them.

Also, at the time of retirement, they could take more money home with the recommendation for raising the ceiling of gratuity from the existing Rs 10 lakh to Rs 20 lakh from January 1, 2016. This could further go up as it felt that the ceiling could be increased by 25 per cent, whenever the Dearness Allowance rises by 50 per cent.

The new recommendations for pension could incur an expenditure of Rs 33,700 crore from the exchequer.

As in January 2014, India has 51.96 lakh pensioners of whom 32.57 lakh are in the age group of 60 to 80 years. According to the commission, the proposed revised pension formulation would bring about parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.

It has recommended two formulations for calculating the pension and pensioners will be given the option of choosing whichever formulation is beneficial to them,  once the government clears the proposal.

As per the first formulation, all personnel who retired prior to January 1, 2016, the expected date of implementation of the report, should be fixed in the Pay Matrix suggested by it as the present grade pay has been recommended to be abolished. The personnel’s Pay Matrix should be fixed on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix.
“This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he and she had earned in that level while in service, at the rate of three per cent. Fifty percent of the total amount so arrived at shall be the revised pension,” the report said.
As per the second formulation, the pension, as had been fixed at the time of implementation of the Sixth Pay Commission, should be multiplied by 2.57 to arrive at an alternate value for the revised pension.
For example, for an officer who retired at a salary of Rs 79,000 in May 2015 would be getting a pension of Rs 39,500 as per Sixth Pay Commission. If one goes by the formulation of multiplying it by 2.57, his pension amount would be Rs 1,01,515. Using the other formulation, he could get Rs 99,500. On the disability pension for armed forces, the commission is recommending reverting to a slab based system for disability element, instead of existing percentile-based disability pension regime.