I am surprised to see some of the ill-informed officers on pension by reading Circular 610 say that Notional Pay method will be implemented and all those who get less pension by Notional Pay method will get their pensions reduced w.e.f. Jan 2016. A number of members of TSEWA has sent mails bordering on panic to me as if their pension is going to be reduced. They are asking me to take up a case with Ministry of Defence not to reduce their pensions.
Let me make it very clear that your pension which you are drawing by 2.57 method w.e.f. Jan 2016 will not be reduced.
The Govt of India vide their letter dated 05 Sep 2017 has clearly mentioned at para 6 that pensions of all Pre – 2016 faujis and family pensioners will be fixed by two methods and higher pension out of the these two methods will be the pension w.e.f. Jan 2016. I am giving you the extract of ibid Govt of India, Ministry of Defence letter:
Extract of Govt of India, Ministry of Defence Letter No: 17(01)/2017 / (02) / D (Pension/Policy) dated 05 Sep 2018 and Circular 585 of PCDA (Pensions) Allahabad
6. The higher of the two Formulations i.e. the pension/family pension already revised in accordance with GoI, MoD letter No. 17(01)/2016 D(Pen/Pol) dated 29 th October 2016 and modified vide letter No. 17(01)/2017 (01)/D(Pen/Policy) dated 04.09.2017 (2.57 Method) or the revised pension/ family pension worked out in accordance with Para 5 above, shall be granted to pre – 2016 Armed Force Pensioners as revised Pension/ Family Pension w.e.f. 01.01.2016 (Notional Pay Method).
I have repeatedly mentioned that Notional Pay method is NOT beneficial to all those who retired prior to Jan 2013. For them 2.57 method of pension is more beneficial. They will continue to draw the same pension till Jun 2019. Their pension will be revised upwards with OROP – 2018 and new pension will be effective from Jul 2019. For example a Pre – 1996 Colonel who retired in 4th CPC with basic pay of Rs 5,100 is given pension by Notional pay method at 0.50 x (134500 +15500 MSP) = Rs 75000 pm. Whereas the same Colonel will get pension by 2.57 method of Rs 92,854 (OROP of Rs 36130 x 2.57). Therefore he will continue to get pension by 2.57 method as it is more beneficial to him.
I have also informed that all those who actually retired in calendar years 2013 / 2014 / 2015 may get benefitted by Notional Pay method if their pension at the time of retirement is more than OROP pension for their rank and length of service. For example the Ministry of Defence vide their letter dated 05 Sep 2017 in their illustration of a Brigadier who retired with 35 years’ service on 31 May 2014 get pension of Rs 1,01,600 by Notional pay method. His pension by 2.57 method is Rs 2.57 x (63150 +8900) = Rs 1,00,295. The notional pay method is therefore more beneficial to this Brigadier. Such pensioners will get higher pension and also arrears from Jan 2016 to date of remittance of arrears by their banks.
I request officers who are not well versed with pensions not to post any such mail in social media to the effect that pension by Notional pay method is the only method and those who get less pension will get reduced pension w.e.f. Jan 2016. Such mails create unnecessary panic especially with JCOs / OR and family pensioners of all ranks.
I want to reiterate that pension which is more beneficial by either 2.57 method or Notional Pay method will be fixed w.e.f. Jan 2016 to all the Pre – 2016 pensioners. There is no need to have any apprehension.