Government of India Ministry of Finance Department of Expenditure Implementation Cell The undersigned is directed to enclose herewith a copy of the Report of the Committee headed by the Cabinet Secretary to look into the issue of "One Rank One Pension”. a — (ALOK SaXENA)~ DIRECTOR (IC) Smt. Neelam Nath, Secretary, Djo_Ex-Servicemen's Welfare, New Delhi. MoF, D/o Expenditure, IC [.D. No. 7.10/4/2008-IC dated 9.7.2009 Enol: as aboveReport of the Committee on One Rank One Pension and Related Issues 30!" June, 2009Report of the Committee on One Rank One Pension and Related Issues 44 Onareference from the Raksha Mantri regarding the igsue of ‘One Rank One Pension’, the Prime Minister had directed that the proposal of Raksha Mantri on “One Rank One Pension’ may be examined by a Committee headed by the Cabinet Secretary with Defence Secretary, Home Secretary, Secretary, DOPT, Secretary (Expenditure) and Secretary (Ex-servicemen Welfare) as Members. Secretary, D/o Pensions & PW was co-opted as & Member of the Committee. The Committee held 5 meetings to consider the matter. 4.2 In this context, the President, in her address to Parliament on June 4, 2009, also announced that the Committee headed by the Cabinet Secretary to look into the issue of -One Rank One Pension’ has already commenced its work and expects to complete it by the end of June, 2009. The issue of One Rank One Pension’ 24 ExServicemen Associations have been demanding the grant of “One Rank One Pension’ for many years “one Rank One Pension’ implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension be automatically passed on to the past pensioners. 2.2 The demand for grant of One Rank One Pension has been considered by the Government a number of times in the past. The Estimates Committee (1980-81) on resettlement of ex-servicemen. noted that disparity pension between past and present pensioners: of equal rank was inequitable and recommended that the matter should be examined and a just solution fed to end this disparity. Thereafter, this issue was raised in 1964 by the High-Level Empowered Committee on the problems of ex-servicemen headed by Shri K. P-Singh Deo, the then Minister of State for Defence. This Committee recommended that the Fourth CPG may consider the issue particularly in the light of the principle established regarding pension of Judges of the Supreme Court and High Court. 2.3 The Fourth Pay Commission considered the issue and stated that the amount of pension undergoes changes as and when pay scales are revised and any attempt to equalize pension with reference to the revised scales of pay would amount to retrospective application of pay scales. 2.4 Subsequently, a High Level Empowered Committee chaired by the then Defence Minister, Shri Sharad Pawar, was formed in 1991 to consider the matter, This Committee did not recommend grant of One Rank One Pension’. However, this Committee observed that the terms and conditions of service of Armed Forces Personnel were distinct and as such, a special dispensation for them was required. Based on this, grant of a One Time Increase (OT!) was recommended and granted on the following fines: a) Sepoy Pensioners i) Grant of benefit of 18 years service to all retiring on oF after 1.1.1986. ii) Pre and Post 1.1.1973 retirees brought at par and stepped up by neutralizing 95% differential between post 1.1.86 and post 1.1.73 rates of pension. b) NCOs) [JCOs/Honorary Commissioned Officers — Pension of post 11.1986 retirees reduced in a graded manner by Rs.10/- p.m. for 15 years service and by additional Re.2/- p.m. for additional years of service upto 24 years of service. The difference between existing pension and revised pension SO arrived at was rounded off to the lower multiple of 5 and granted as OTI) c) Officers i) Pre 1.1.1973 pension stepped upto post 1.1.1973 jevel. Officers Below Colonel ii) Pension further raised by giving benefit of 33 years as the system of weightage: was only started from 11.1973. The revised consolidated ‘pension (RCP) was thereafter determined with reference to improved original pension and difference between this RCP and existing pension granted as One Time Increase 25 The Fifth Pay Corhmission, on the matter of grant of full parity in pensions of Defence personnel, stated that while they agreed that the gap between past and future pensioners should be narrowed down, it was pertinent to note that every Pay Commission gives certain benefits in pay which are over and above the impact of inflation. The additional benefit is given either due to upgradation of recruitment qualifications or change in job content etc. The benefit accrued on this account need not necessarily be passed on to pensioners. | Keeping these factors in view and taking a cue from the Sharad Pawar Committee Report, the Fifth CPC made the following recommendations for Armed Forces personnel- () In the case of Commissioned Officers, total parity may be brought between pre-1.1.1986 and post-1.1.1986 retirees by notional fixation of pay in the post-1.1.1986 scales and the notional revised pension be worked out on the basis of this pay. Thereafter, for all pre-1.1.1996 retirees the fitment formula suggested for past civilian pensioners i.e., Basic Pension + Dearness Relief + interim Relief 1 (Rs.50) + Interim Relief 2 (10% of Basic Pension) + 20% (revised by Government to 40%) of Basic Pension, may be applied. If the resultant figure falls short of the mninimum pension applicable to the post-t 4.96 retirees for the rank held, it may be stepped up to the minimum pension prescribed for the rank.(i) inthe case of PBORs, the need for notional fixation of pay does not exist in view of the existence of pension tables. Therefore, for PBOR alll pre- 1.1.1986 pensioners may be brought on to post-1.1.1986 levels by bridging the present gap in the pension tables and the same fitment formula on pension as for officers may be applied. If the resultant figure falls short of the minimum pension for the rank and group for post- 4.1.1996 retiree, it may be upgraded to that level. 2.6 After the Fifth Pay Commission, an Inter-Ministerial Committee was set up in 2009 by the Department of Pension & Pensioners’ Welfare to consider the demand of ‘One Rank, One Pension’. The Committee in its report submitted on 24,9.2004 did not favour grant of “One Rank, One Pension’, but recommended grant of modified parity based on the maximum of the revised scale of pay introduced with effect from 1.1.1996 for PBOR. 2.7 Ministry of Finance did not agree with the proposal of the Ministry of Defence for implementation of the recommendations of the Committee. They observed that any departure from the principle laid down by the 5 GPG regarding modified parity, would be introduction (through a side door), of the ‘one rank one pension system and the same should not be further modified to redress a presumed injustice. The position was brought to the notice of Prime Minister who directed that a Group of Ministers be constituted to consider the demand of one rank one pension. 2.8 Accordingly, a Group of Ministers (GOM) was constituted by the Government in January, 2005 to jook into the issue. After detailed deliberations on various aspects, the GOM felt that One Rank One Pension cannot be agreed to. However, there was justification for improving the pensionary benefits of the Personnel Below Officer Rank (PBOR), particularly the three lowest ranks. \ \2.9 Finally, the GOM unanimously recommended that the pension of pre- 4.1.1996 PBOR retirees may be revised with reference to maximum of post 1.1.1996 pay scales. In addition, the weightage of Sepoy, Naik and Havaldar rank for past as well as: future retirees be increased to 10, 8 and 6 years respectively subject to a maximum of qualifying service of 30 years. The benefit was given only :for service pension. The benefit of the above recommendation took effect from 1.1.2006. 240 The Sixth Pay Commission, on the issue of One Rank One Pension’ for Defence personnel, stated as under:- “One Rank One Perision has been demanded for all ex-servicemen. ‘The Fifth CPC had already granted full parity between pre and post 4/1/1986 pensioners and a modified parity between pre and post 4/1/1996 pensioners. Identical dispensation was given to the civilian employees as well as Defence Forces personnel, No change is proposed in the existing dispensation either in case of civilians or Defence Forces. Hence, extant provisions may continue.” 2.41. In the context of ‘One Rank One Pension’, it is also relevant to mention that a petition was filed by Ex-Services League (1991 1 SCR 158) as a sequel to the decision of Supreme Court in D. S. Nakara & Ors. Vs. Union of India. The relief claimed by petitioners, in substance, was to the effect that the result of the decision in Nakara Is that all the retirees who held the same rank irrespective of their date of retirement must get the same amount of pension and this should be the amount which was calculated and shown in the appendices to the Memorandum challenged in the Nakara judgement. The Supreme Court (in judgement dated 29,1.1991) took the view that the petitioners’ claim that all pre-1.4.1979 retirees of the Armed Forces are entitled to the same amount of pension as available 10 post 1.4.79 relirees was clearly untenable and did not flow from the Nakara decision.