Broad approval for one rank, one pension scheme


Bowing to the long-standing demand of ex-servicemen for one rank, one pension (OROP) and other benefits, the Union Cabinet on Monday broadly approved the scheme and also gave its nod for enhancement of family pension and dual family pension that will cost the government about Rs. 2300 crore annually.

The Cabinet, which met here under the chairmanship of Prime Minister Manmohan Singh, also approved the grant of family pension to mentally and physically challenged children of armed forces personnel. The decisions on pension issues of ex-servicemen may be implemented from a prospective date and payment made accordingly, an official release said.

On the OROP, the demand of the defence forces and ex-servicemen associations was that an uniform pension be paid to the defence personnel retiring in the same rank with the same length of service, irrespective of their date of retirement, and that any future enhancement in the rates of pension be automatically passed on to the past pensioners.

The difference in the pension of present and past pensioners in the same rank occurs on account of the number of increments earned by the defence personnel in that rank. The UPA government on two previous occasions has taken decisions to narrow the gap between the present and past pensioners, particularly those belonging to ‘JCOs and Other Ranks.’

On the issue of one rank, one pension, the Cabinet approved the following:

Bridging of the gap in the pension of pre-January 2006 and post January 2006 JCO/OR retirees by determining the pension of pre January 1, 2006 retirees on the basis of a notional maximum for ranks and groups across the three Services as in the case of post-January 1, 2006 retirees. In addition, the weightage of qualifying service in the ranks of Sepoys, Naik and Havaldar would be increased by two years for both pre and post-January 1, 2006 retirees.

The pension of pre-January 1, 2006 Commissioned Officer pensioners would be stepped up with reference to the minimum of fitment table for the ranks, instead of the minimum of pay band.

Referring to the enhancement of family pension, the Cabinet decided that the pension of pre-January 1, 2006 family pensioners (Commissioned Officers, Honorary Commissioned Officers, JCOs/ORs) be stepped up, based on the minimum of the fitment table instead of the minimum of the Pay Band.

Establishing linkage between the family pension and the pension of JCOs/ORs, in those cases where the death takes place after the retirement of the JCO/OR since such a JCO/OR drew a pension based on the maximum of the pay scales, 60% of the pension applicable to JCO/OR pensioners would be granted to the family pensioner in case of normal family pension calculated at 30% of last pay drawn.

Accordingly, based on the rank, group and length of service of the deceased JCO/OR pensioner, his pension would first be determined on notional basis. In cases where death of JCO/OR took place after retirement, the family pensioners in receipt of normal family pension would become entitled to 60% of the said pension determined on notional basis and those in receipt of enhanced family pension will be entitled to 100% of this pension. Similar entitlements would be determined in the case of Special Family Pension and

The family pensioner of the JCO/OR would be granted pension arrived at on the basis of the family pension worked out as per the formulation at (i) above or the pension on the basis of stepping up with reference to the minimum of the fitment table, whichever is beneficial. Further, the linkage of family pension with retiring pension be applied in the case of post-January 1, 2006 family pensioners of JCOs/ORs also.

Dual family pension

The Cabinet also decided that dual family pension would be allowed in the present and future cases where the pensioner drew, is drawing or may draw pension for military service as well as for civil employment.

In yet another welfare measure, the Cabinet approved that the grant of family pension to mentally/physically challenged children who drew, are drawing or may draw family pension would continue even after their marriage.

Panel report

The Cabinet nod for the OROP came weeks after the six-member committee, set up by the Prime Minister, submitted its report. The committee was headed by Cabinet Secretary Ajit Seth. It was set up after a Rajya Sabha panel last year recommended granting one rank, one pension to defence personnel.

The Rajya Sabha Committee on Petition in a report tabled on December 19, 2011 recommended grant of OROP to defence personnel. It found the government contention to deny ex-servicemen “untenable.”



Pay and Pension related issues of defence services




Revision of PPOs of pre-2006 family pensioners

Revision of PPOs of pre-2006 family pensioners.

Central Government Pension and Family Pension-Uncommon Areas

These are certain uncommon areas in Central Government Pension and Family Pension Matters.

Child adopted even after retirement is entitled to get family pension

Q A retired employee due to demise of his wife and son legally adopted one of his grand sons after his retirement. He submitted the adoption deed to the Pension Sanctioning Authority with the request to add the name of his legally adopted son in the list of his family members so that he could receive family pension in case of his death. Whether the same is permissible as per law.

Also kindly clarify as to whether the children of post-retiral spouse born to the retired employee are eligible for family pension.

A The stipulation that adoption should be “before retirement” has been deleted vride Notification No.1(66) P & PW/89-E, dated 18-1-1993. Hence as per Rule 54 (14)(b)(ii) of CCS (Pension) Rules, 1972, son/daughter legally adopted after retirement and children of post-retiral spouse are eligible for the grant of family pension vide Rule 54 (14) of CCS(Pension) Rules and GIDs (18) to (20) thereunder in Swamy’s Pension Compilation.

No family pension to the parents, if the deceased employee had left behind a widow or a child.

Q Consequent of demise of one employee family pension to his widow was sanctioned. Later on, the widow of the deceased has got re-married with other person. As the widow of the deceased has no children, family pension was stopped from the date of re-marriage. Whether the mother/father of the deceased is entitled to family pension.

A As per Para 7.2 of the OM, dated 27-10-1997, parents are eligible for Family Pension only if the deceased employee had left behind neither a widow nor a child. Hence, in the case referred to by you, the parents are not entitled to Family Pension.

Pension cannot be stopped, even though pensioner acquires foreign citizenship

Q A retired Central Govt. Employee who is in receipt of pension emigrated to Canada with Non-Resident Indian status. He was getting his pension continuously when he was a NRI. But now he opts to take the citizenship of that country and as such it may be clarified whether he may continue to get his monthly pension as usual or will it be stopped after his acquiring citizenship of a foreign country.

A There is no provision in the Rules, viz., CCS(Pension) Rules, Central Treasury Rules for the stoppage of pension drawn by a Govt. pensioner on his acquiring the citizenship of a foreign country. As such the retireed employee will continue to get his monthly pension as usual even after his getting foreign citizenship.

Fresh application not required for payment of arrears of commutation due to revision of pension.

Q An employee after his reirement got all the retirement benefits including 1/3rd commuted value of pension. Subsequently he expired. After his demise pay commission recommendation was implemented and his pay was retrospectively revised. His wife who is a family pensioner received the arrears of pay, pension, gratuity, etc. But the arrears of the additional commuted value of pension which has become due based on the quantum of 1/3rd revised pension was not paid to her on the grounds that the concerned employee need to apply afresh for such payment. Since the employee had applied for 1/3rd commutation of pension while he was alive whether his origianl application would cover any revision which may become due subsequent to his death

A As per Rule 10 of CCS(Commutation of Pension) Rules, 1981, the said family pensioner is entitled to the difference between the commutation amount received by her husband for the original pension and the commutation amount admissible on the revised increased pension. For this purpose, no fresh application is necessary.


Taxability on Commuted Pension

One of GConnect Readers wanted to know about the taxability in respect of Commuted Portion of Pension and Dearness Relief paid on the Commuted Portion of Pension.

Income Tax Act 196 provides the taxability of pension depending on whether the pension received is periodical or lump sum.

Commutation of Pension means payment of lump sum amount in lieu of a portion of pension surrendered voluntarily by the pensioner based on duration of period in relation to the age. This is purely an optional facility provided by the employer to his employee. As per the Act following rules are applicable for the taxability of commuted pension:

Any commuted pension (i.e Lumpsum Pension) received by an employee of the Central Government, State Government, Local Authority or Statutory corporation is wholly exempt from tax.

Un-commuted Pension (Periodical Payment) is fully taxable as salary under section 15 of the Act. This provision is applicable for both Government and other salaried class. Apparently, the dearness relief payable on Commuted portion, which is received by the pensioner on monthly basis along with un-commuted pension is also taxable.

Payment in commutation of pension received by any other employee:

(a) in a case where the employee receives any gratuity, the commuted value of one-third of the pension which he is normally entitled to receive is exempt from tax.

(b) in any other case, the commuted value of one-half of such pension is exempt from tax.

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