8th Pay Commission: Why Level 1 to 18 employees are pushing hard for One Rank One Pension

8th Pay Commission: Only the armed forces and specific officials enjoy the One Rank One Pension benefit right now. Central government civilian employees are now strongly demanding this scheme ahead of the 8th Pay Commission

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8th Pay Commission

Armed forces personnel, Supreme Court and High Court judges, and the Comptroller and Auditor General of India (CAG) currently get the One Rank One Pension (OROP) benefit. The 8th Pay Commission is holding talks with various stakeholders to prepare its report. Meanwhile, employee and pensioner unions are strongly demanding OROP for all central government civilian employees in Levels 1 to 18.

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Employee Salary

AIDEF General Secretary C. Srikumar explained to ET Wealth Online that OROP can easily remove the pension differences among central government civilian employees. He pointed out that employees retiring from the exact same post at different times currently get different pension amounts.

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Pension Gap

Manjeet Singh Patel, President of the All India New Pension Scheme Employees Federation, shared his concerns with ET Wealth Online. He stated that people who retired many years ago still face a massive pension gap, even though previous pay commissions revised their pensions.

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OPS Scheme

Only pensioners under the Old Pension Scheme (OPS) can get the OROP benefit. OROP basically equals out the pension amount. It ensures that employees with the same rank and similar length of service get the exact same pension, no matter when they retired. Right now, pensioners from the same rank get different amounts just because they retired under different pay commissions.

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Financial Benefits

The central government rolled out OROP for the armed forces in 2015, and they applied the financial benefits from July 1, 2014. Retired Supreme Court and High Court judges, along with the Comptroller and Auditor General of India, also receive OROP benefits.

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Pay Gap

Did past pay commissions do anything about this pension gap? C. Srikumar mentioned that the 5th Pay Commission actually recommended updating the pensions of pre-1986 retirees. They suggested a notional pay fixation using the formula meant for employees working on January 1, 1986. The commission also stated that the consolidated pension should not drop below 50 percent of the minimum revised pay scale for that specific post.

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7th Pay Commission

C. Srikumar added that the 7th Pay Commission also recognized the need for pension equality. They focused on inter-temporal equity and aimed to slowly reduce the gap between past and future pensioners. Employee unions believe that notional pay fixation can effectively bring past pensioners on par with current ones through regular pay commission revisions.

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Salary Calculation

AIDEF suggests that the government should base this notional pay fixation on the employee's rank at retirement and their career progression. They argue that the calculation should not just stick to the historical pay structure that existed on the exact date of retirement.

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AIDEF Recommendation

This difference matters a lot when a post gets an upgrade, reclassification, or a shift to a higher level. AIDEF gave a clear example. If the government upgrades a specific post after some employees retire, the older retirees should not lose out on the higher status benefits. Otherwise, the retirement date becomes the only thing deciding their pension rights. AIDEF recommends fixing the pension at 50 percent of the notional pensionable pay.

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OROP Method

What is AIDEF's proposed OROP method for civilian pensioners? AIDEF wants the 8th Pay Commission to look at a few key factors while implementing OROP for everyone. For notional progression, the government must consider the rank at retirement, the pay scale for that rank, and the increments earned during service. They should also factor in actual promotions and any later upgrades to that post.

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Who Enjoys OROP Benefits

Armed forces personnel, Supreme Court and High Court judges, and the CAG currently enjoy OROP benefits. As the 8th Pay Commission talks to different groups for its report, employee unions are pushing hard. They want the government to implement OROP for all central government civilian employees in Levels 1 to 18.

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5th Pay Commission

Did past pay commissions address this pension gap? C. Srikumar noted that the 5th Pay Commission recommended updating pre-1986 retirees' pensions through notional pay fixation. The commission also stated that the consolidated pension should not fall below 50 percent of the minimum revised pay scale for the employee's retirement post.

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7th Pay Commission

C. Srikumar added that the 7th Pay Commission also recognized the importance of pension equality and inter-temporal equity. They aimed to slowly reduce the gap between past and future pensioners. Employee unions believe notional pay fixation can effectively bring past pensioners on par with current ones.

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Pay Fixation

AIDEF suggests basing this notional pay fixation on the employee's rank at retirement and their career progression. They argue that the calculation should not just stick to the historical pay structure from the retirement date. If the government upgrades a post later, older retirees should not lose out on those higher status benefits.

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Pension Fixation

AIDEF recommends fixing the pension at 50 percent of the notional pensionable pay, subject to minimum pension rules. They want the 8th Pay Commission to consider the rank at retirement, the pay scale, and earned increments while implementing OROP for all civilian pensioners.

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Employees

Armed forces personnel, Supreme Court and High Court judges, and the CAG currently get OROP benefits. With the 8th Pay Commission holding talks, employee unions are strongly demanding OROP for all central government civilian employees in Levels 1 to 18.