Pension

Notional Pay in Jan 2006 for Those Retired in Earlier CPC Periods

Dear Petitioners of AFT – 1B,

Sir,

  1. Many Officers who retired prior to Jan 2006 are asking me to work out their Notional Pay as on Jan 2006 to know how much benefit they are likely to get if TSEWA wins OA – 34 / 2016 and AFT – 1B cases in AFT Delhi. This indicates to me they have very little idea of how their pension has been fixed in earlier CPCs and how it is going to be fixed in 7th CPC. Therefore I have taken lot of time to give you basics to know how your pension is fixed and how at times your entitled pension is deliberately lowered to cut down the pension bill.
  2. Pension Fixation. The fundamental principle is:  pension is 50% of Last pay drawn. Suppose you are a Colonel and retired with 5 increments in Jul 2005 (in 5th CPC period) in the pay scale of Rs 15100 – 450 – 17350. Then your Last Drawn pay is 15100 + (5 x 450) + Rank pay of Rs 2000 = Rs 17350 + 2000 = Rs 19350 and your pension is 50% of it i.e. 0.50 x 19350 = Rs 9,675

Your Pension in Next CPC

  1. Now your pension is fixed in 6th CPC as on w.e.f Jan 2006 as if you earned no increments and on Jan 2006 your pension is fixed at Minimum pay of Colonel who retired in Jan 2006 with no increment i.e. Rs 55,590 and your pension is Rs 55590 x 0.5 = Rs 27,795. Your 5 increments vanished on 01 Jan 2006. This way of fixing pension giving no benefit to your hard earned increments has no rationale and is done arbitrarily by Govt of India and as per my assessment  is to cut down the pension bill.

Challenge by Pre – 2006 Maj Gens 53 Nos

  1. This irrational method of pension fixation was challenged by 53 Maj Gens / R Adms / AVMs  retired  in 5th CPC as to why their pension has been fixed without giving any benefit to their increments earned at the time of their retirement (in the 5th CPC period). They filed a case in AFT Chandigarh and were given OA No: 100/2010. The AFT Chandigarh understood the irrationality and illogical action of Govt of India and ordered the Min of Def to arrive at Notional Pay in Jan 2006 of these Pre – 2006 Maj Gens taking their increments into account and then fix their pension. Prior to the judgment all these Maj Gens were getting pension at 0.50 x 60700 (minimum pay of Maj Gen with no increment who retired in Jan 2006) = Rs 30,350.The Govt of India conditionally enhanced their pension by taking their increments earned also into account in Jan 2006. Net effect is the pension of pre – 2005 Maj Gens has been equated to their counterparts with same number of increments who retired in calendar year 2006. In other words the pension of Pre – 2005 Maj Gen with  five increments = Pension of Maj Gen with 5 increments retired in Jan 2006.
  2. There after till next CPC there is no increase in pension. It is at best one time increase in pension at the beginning of the CPC period. This ensured there is no discrimination in pension between Pre – 2005 Pensioners and Pensioners retired in calendar year 2006. By no stretch of imagination you can take it as OROP. Officers who retired in 2007 to 2015 will get much higher pension than those who retired in calendar year 2006. What AFT Chandigarh did is to allow the pre – 2005 Maj Gens  to get their pension with their increments counted in Jan 2006 whereas till then their increments were treated as null and void. I hope you understand this subtle difference in pension fixation. Only those Pre – 2006 , 53 Maj Gens / R Adms / AVMs who filed their case in AFT Chandigarh got the benefit of higher pension w.e.f Jan 2006. All other Maj Gens / R Adms / AVMs who thought they also will get this benefit continue to get their pension which is based on Minimum pay in Jan 2006 of Maj Gen i.e. Rs 30350.

Pre – 2014 Maj Gens 14 Nos.

  1. 14  Maj Gens /R Adm / AVM also filed a similar case in AFT Delhi in Apr 2016 and won their case in Feb 2017. All these Maj Gens were given enhanced pension w.e.f. Jan 2006 to Jun 2014 with interest of 9% from the date of filing the case i.e. 16 Apr 2016. PCDAs worked out Notional pay as if they continued to serve till Jan 2006 with their increments intact and sent their LPCs to PCDA (Pensions) Allahabad, PCDA (Navy) Mumbai and Joint CDA (AF) Delhi to fix their pension. Now these 14 Maj Gens earned arrears ranging between Rs 2.75 lakhs to Rs 6.50 lakhs and got their pension enhanced from Rs 30,350 to Rs 35,660 pm.

Understanding of Certain Terms

  1. It is very essential for you to understand terms like Notional Pay, Multiplication Factor, etc  and then only you will be clear as to how your pension is fixed even in Jan 2006 if T SEWA wins OA – 34/2006 (AFT – 1) and AFT – 1B in AFT Delhi.

Notional Pay.

  1. This term as has been coined in Government of India, Ministry of Defence letter No:. 17(01)/2017/(02)ID(Pension/Policy) dated 05 Sep 2017 means it is your assumed pay in Jan 2016 as if you are still serving in Jan 2016 (though you might have retired in 1976 or 1986 or 1996 or 2006).This means it is last pay drawn in Jan 2016  corresponding to your Last Drawn Pay whenever you retired ( i.e. 3rd CPC period to 6th CPC Period). The Notional Pay takes into account your increments including stagnation increments earned in arriving at your revised pay and pension in Jan 2016. This is due to judicial pronouncement of Hon’ble Supreme Court in the case of Maj Gen SPS Vains Vs Union of India 2008.
  2. Multiplication Factor.  Suppose you retired say in 3rd CPC, your Last Pay Drawn is shown in your PPO. Pay of serving officers and JCOs /OR in subsequent CPCs is enhanced by a multiplication factor:  say 20% of basic pay of 3rd CPC is the pay in 4th CPC. 40% of basic pay + rank pay is enhancement in pay of serving personnel from 4th to 5th CPC. 1.86 is the multiplication factor to enhance  pay of serving personnel from 5th to 6th CPC and 2.57 is the multiplication factor from 6th CPC to 7th CPC. This multiplication factor is also called Fitment Factor. That is by how much pay of serving personnel will be enhanced in next CPC. Please remember this multiplication factor is for pay and not for pension. Your pension is given in SAIs and so far your pension is enhanced only to the minimum of pay of your rank in subsequent CPCs. For example irrespective of number of increments you earned at the time of your retirement, you are treated as if you earned no increment in subsequent CPCs and your pension is fixed at Minimum of your rank. It is same as saying your pension is fixed as if you have earned no increment at the beginning of next CPC. For example the pension of Major whether he earned 6 increments or 10 increments in 5th CPC, such majors are assumed to have no increment in 6th CPC and pension is fixed at 50% of Minimum of Pay of Major who retired in Jan 2006 i.e. with no increment.
  • That is the minimum pay of Major (no increment) in Jan 2006 is Rs 36410 and pension is 0.50 x 36410 = Rs 18205.
  • So is the pension of  Lt Col i.e. 0.50 x 52530 (Minimum Pay )= Rs 26,265.
  •  Col gets pension of Rs 0.50 x 55590 (Minimum Pay)  = Rs 27,795.
  • Brig gets pension of Rs 0.50 x 58290 (Minimum Pay)  = Rs 29,145.
  • Maj Gen is fixed pension of Rs 0.50 x 60700 (Minimum Pay)  = Rs 30,350

Effect of Increments / Stagnation Increments on Last Pay Drawn and Pension.

  1. As I explained in earlier paragraphs, your last pay drawn is dependent upon the number of increments you earned. Your pension is therefore 50% of your Last Pay Drawn. Longer the service, higher are the increments and therefore higher is the Last Pay Drawn and hence higher is the pension. For every one year of service you get one increment. Your first increment is given to you only after completing one year of service in the rank. Suppose you are Colonel and you served in that rank for 6 years and then retired in the pay scale of Rs 15100 – 450 17350. You earned 5 increments before you retired. Then your last pay drawn is Rs  15100 + (5x 450) + Rank pay of Rs 2000 = Rs 17350 + Rank pay of Rs 2000 = Rs 19,350.  Your pension is 0.50 x 19350 = Rs 9,675. You have reached the maximum of your pay scale of Rs 17350 (Rs 15100 – 450 – 17350). Till you reached the maximum of pay scale of Rs 17,350 you got one increment of Rs 450 for every one completed year of service in that rank. Thereafter you will not get annual increments but only stagnation increment at the rate of one increment for every two years of service. The CPCs fix your pay scale in such a manner your pension as Colonel has to be atleast one rupee less than that of Brigadier for similar length of service.
  2. If you have put in only two years of service then your Last pay drawn is = Rs 15100 + (1 x 450) + Rank Pay of Rs 2000 = Rs 15550 . With Rank pay of Rs 2000 your Pension is Rs 8,775.
  3. Now you have one Colonel with 6 years of service getting pension of Rs 9,675 and another Colonel with 2 years of service getting pension of Rs 8,775 till end of CPC period i.e. Dec 2005. These two Colonels retired in 5th CPC period ( Jan 1996 to Dec 2005).

 

Illogical Method of Pension Fixation in Next CPC Challenged in AFTs

  1. Therefore pension is very much dependent upon your last pay drawn which in turn is dependent upon number of increments earned. But what we have to understand is this differential in pension i.e. Rs 9,675 of Colonel with six years of service and Rs 8,775 for a Colonel of 2 years’ service lasts only till end of the Central Pay Commission period i.e. Dec 2005. Then on Jan 2006 in 6th CPC, pension of both the Colonels is fixed at Minimum of Pay of Colonel i.e.Rs 55,590 and pension is 0.50 x 55590 = 27,795. The benefit of higher last pay drawn disappears in the next CPC.
  2.  Pension of Pre – 2006 Maj Gens basaed on Notional Pay in Jan 2006 with their Increments Counted for Fixation of Pension. Pay scale of Maj Gens in 5th CPC is Rs 18400 – 500 – 22400.  As explained above, Pre – 2006 Maj Gens, R Adms and AVMs challenged this illogical, discriminatory and unjust method of pension fixation in next CPC by not giving any benefit to their Last Pay Drawn in AFT Chandigarh in OA 100/2010. Government lost their case. Govt of India, Min of Def enhanced pension of these Pre – 53 Maj Gens more than Rs 30350. A Maj Gen with two years’ service would have got higher pension of Rs 31,025 in Jan 2006 corresponding to Rs 18400 +500 = Rs 18,900 of last pay drawn in 5th CPC. Another Maj Gen who put in five years of service with four increments would have got higher pension of Rs 31,720 in Jan 2006 corresponding to the 5th CPC Pay of Rs 18400 + 4 x 450 = Rs 20,900.

How to Find Notional Pay of Pre – 2006 Officers in Jan 2006 with their Increments Counted for Pension Fixation?

  1. The method to locate your Notional pay in 6th CPC corresponding to your Last Pay Drawn at the time of your retirement is very easy and as explained below.
  2. Those Retired in 5th CPC Period (Jan 1996 to Dec 2005).

(a)   Colonel. Please go to SAI 2/S/2008. See your basic pay in 5th CPC on the left hand side of the Fitment table and locate the corresponding pay in 6thCPC for you rank on the right hand side. For example if you are a  Colonel and your basic pay in 5th CPC in Dec 1995 is Rs 15,550(Rs 15100 + One increment of Rs 450)  then your notional pay in 6th CPC is Rs 56,820 (PIPB of Rs 42120, Grade pay of Rs 8700 and MSP of Rs 6000) corresponding to Rs 15,550 of 5th CPC. Your pension w.e.f. Jan 2006 should be  = 0.50 x 56820 = Rs 28,410 where as your pension has been limited by Govt of India, Ministry of Defence as if you earned no increment i.e. Rs 27,795. The loss caused to you is Rs 28410 – 27795 = Rs 615 + DR for every six months.

(b)   Brigadier. I retired as Brigadier with basic pay of Rs 18050 with one stagnation increment in Mar 2004. My notional pay in Jan 2006 corresponding to this 5th CPC last pay drawn is Rs 60,950. Pension should be 0.50 x 60950 = Rs 30,475 where as I was paid only Rs 29145 w.e.f. Jan 2006. So my gain is Rs 30475 – 29145 = Rs 1,330 + DR per month. This arrears from Jan 2006 to Jun 2014 with DR for every six months is to be worked out, OROP excess payment received is to be deducted and after paying TDS then balance is what will be remitted into my bank account if we win  OA – 34 / 2016 (AFT-1) and AFT – 1B case going to be filed in AFT Delhi.

(c)  You do not have to carry out lengthy calculations of multiplying your basic pay + rank pay of 5th CPC with 1.86 etc.

(d)  I am attaching SAI 2/S/2008 for you to refer to.

Those Retired in 4th CPC Period (Jan 1986 to Jun 1995)

  1. Unfortunately the SAI 1/S/1998 does not give any equivalence table of showing for your basic pay in 4th CPC and corresponding to that what is your basic pay in 5th CPC. The fixation of basic pay in 5th CPC is given at page 47 (out of 90 pages) in para 5 of ibid SAI. I am reproducing the same for your benefit. I shall work out fixation of initial pay in 5th CPC as per the method given in the SAI to show how you should do it yourself.

Extract of SAI 1/S/1998.

  1.    Para 5.   Fixation of Initial Pay in the revised scale will be regulated as under :-

(a)       (i)         An amount representing  40% of the basic pay including stagnation increments, if any, and rank pay  wherever applicable in the pre-revised scale, shall  be added to the “emoluments”  of the officer.

(b)       For the purpose of pay fixation, the terms, “existing emoluments” shall include:

(i)         Basic Pay including rank pay and stagnation  increment(s), if any  in the pre-revised scale.
(ii)        Dearness Allowance at the Index Average of 1510, (1960=100).
(iii)       Amount of first and second instalments of Interim Relief.

Fixation of Notional Basic Pay in 5th CPC of Colonel Retired in 4th CPC Period

  1. The fixation of Basic pay in 5th CPC is to be carried out as shown in the table as per SAI 1/S/1998.

 

Basic pay 5,100
Rank pay 1,000
DA 6,660
IR 100
Addl IR 610
Fitment @ 40% of Basic Pay + Stagnation Increments if any 2,440
Total 15,910
Minimum to be fixed for Colonel in the pay scale of Rs 15100 – 450 – 17350 15,100
Notional Basic Pay in Jan 1996 higher than Rs 15910 16,000
Gain  per month 900

 

  1. DA (see DA tables attached). Minimum for those drawing basic pay + rank pay  of Rs 3500 DA is Rs 5,180 as on Jan 1996 and for those drawing basic pay + rank pay of Rs 6,001, DA is Rs 6,660. For most of the officers upto rank of Colonel drawing basic pay of Rs 5,000 or less + Rank pay of Rs 1,000 as in Jan 1996,  DA is Rs 5180. For Cols whose basic pay is Rs 5100 and rank pay of Rs 1,000 the DA  is Rs 6,660.

Notional Pay in 6th CPC as on Jan 2006

  1. With Last Drawn Pay of Rs 16,000 as in Jan 1996 as shown in Table in para 18, the Notional pay of Colonel in 6th CPC as given in SAI 2/S/2008 is Rs 56,820. Pension @ 50% of last pay drawn of Rs 56,820 comes to 28,410. Such officers will get benefit in AFT – 1B  of Rs 28410 – Rs 27795 (Minimum Pay of Rank)  = Rs 615 per month from Jan 2006 to Jun 2014 with DR for every six months.
  2. Therefore every officer who retired in 4th CPC must work out for himself whether you are going to be benefitted if you join AFT – 1B. Unless your pension so worked out by Notional pay is more than what you are already drawing as on Jan 2006, it is not beneficial to join AFT – 1B.
  3. The method of Notional Pay fixation is also given by Ministry of Defence vide their letter No:  17(01)/2017/(02)ID(Pension/Policy) dated 05 Sep 2017 at Annexures for officers who retired in 3rd CPC, 4th CPC , 5th CPC and 6th CPC . You can refer to this annexure to know how to fix your notional pay from one CPC to another.

Officers Retired in 3rd CPC Period (Jan 1976 to Dec 1985)

  1. Your Notional pay is minimum for your rank in 4th CPC. Please refer annexure given in ibid Govt of India, Ministry of Defence letter dated 05 Sep 2017 to know how to work out your Notional pay in 4th CPC and then to transit to 5th CPC and finally in 6th CPC.
  2. Caveat. You have to have patience to work out your pension by Notional Pay method if OA – 34 / 2016 (AFT – 1) and AFT – 1B are won. Unless you know how to work out your notional pay from the CPC period in which you retired and transit to 6th CPC there is a possibility that some may not get much benefit as their pension being drawn now is same as it would be by Notional Pay in Jan 2006 as explained in detail in the previous paragraphs. Please satisfy yourself that joining AFT – 1B is beneficial to you. Just do not join because someone told you to do so. I have given example as to how to work out your pension by Notional Pay in Jan 2006. Amend these figures to suit your Last Pay Drawn and ensure your revised pension is more than pension you have been fixed in Jan 2006 (Rs 18205 for Major, Rs 26265 for Lt Col, Rs 27795 for Col, Rs 29145 for Brig and Rs 30350 for Maj Gen). Generally Brigs and Maj Gens would definitely benefit if they join AFT – 1 B and they are likely to get handsome arrears from Jan 2006 to Jun 2014.

Warm regards,

Brig CS Vidyasagar (Rtd)
040-48540895
9493191380

4 Attachments: 

DA Rates for 4 CPC

DA Rates for 5 CPC

DA Rates for 6 CPC

SAI 2 -S-2008 FOR FOR OFFICERS

 

1 Comment

  1. I got Lt. Col. Rank on 6.6.1971 and retired on 30.Sep.1983 in the same rank,with 20 % disability pension. I am also a litigant in the AFT 1 case.
    What should be my notional pay , and , pension from 1.1.2006

Leave a Reply

Your email address will not be published. Required fields are marked *