Supreme Court Upholds One-Rank-One Pension-UPSC Current Affairs

Why in the News?

The Supreme Court ruled there was “no constitutional infirmity” in the way the government had introduced ‘one rank, one pension (OROP)’ among ex-service personnel.

• The OROP scheme, notified by the Defence Ministry on November 7, 2015, was challenged by the Indian Ex-Service Movement.

Probable Question

Examine the genesis of One Rank, One Pension (OROP) demand, highlight the challenges involved in its implementation.          

Key Points

Background

• The demand for OROP was initially examined by Parliament in 2010-11. In its report of December 2011, the Rajya Sabha Committee on Petitions (Koshyari Committee) recommended the implementation of OROP.
• In February 2014, the UPA government announced that it had accepted OROP in principle, and that it would be implemented prospectively from 2014-15. In December 2014, the NDA government in a reply to Parliament reaffirmed the principle of automatic revision.

About One Rank, One Pension (OROP)

• OROP or One Rank, One Pension — means that every pension-eligible soldier retiring in a particular rank gets the same pension, irrespective of his date of retirement.
  • For Example, a Colonel who retired after the Sixth Pay Commission recommendations were accepted in 2006, gets more than a Colonel who retired when his salary was computed on the basis of the recommendations of the Third Pay Commission.
• As of now, soldiers who retired more recently receive more pension than those who did earlier, because pensions are dependent on the last salary drawn — and successive pay commissions have hiked salaries.

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Why Did the Demand for OROP Arise?

• From 1950 to 1973, there was a concept known as the Standard Rate of Pension, which was similar to OROP. 
• In 1974, when the 3rd Pay Commission came into force, certain changes were effected in terms of weightage, additional years of notion service, etc., with regard to pensions. In 1986, the 4th Pay Commission’s report brought further changes.
• What ultimately happened was that the benefits of the successive pay commissions were not passed to servicemen who had retired earlier. 
• Pensions differed for those who had retired at the same rank, with the same years of service, but years apart.
• Ex-servicemen demanded OROP to correct the discrepancy. 

Arguments for OROP

• It was argued that early retirement should not become an adverse element for what a soldier earns as a pension, compared with those who retire later.
• A curtailed career results in denial of longer service at higher pay and, therefore, higher pension. 
• Soldiers are denied the opportunity to earn more increments and promotions, as well as the benefits offered by more recent pay commissions, which significantly affects their pensions.

Arguments Against OROP

• In 2011, the Defence Ministry told the Koshiyari Committee that records going back further than 25 years were no longer available — a major administrative difficulty in introducing the concept. 
• If today’s pension and emoluments are passed automatically to somebody who retired 30 years ago, there will be inherent discrimination against terms and conditions of service which would lead to discrimination under the Constitution”.
• People who retire in the same rank often earn different pensions because they may have served for longer periods in that rank. 
  • For Example, A Colonel who serves for 12 years in that rank will earn more pension than someone who served for 4 years as Colonel. Equating their pensions was unlikely to withstand a legal challenge.
• There are fears that civilian employees who moved to a contributory pension scheme in 2004 might demand a reversion to fixed pensions, thus unravelling the whole system.
• During the OROP protests of 2013-15, it was argued repeatedly that meeting the demand would be financially unsustainable. Because soldiers retire early and remain eligible for pension for much longer than other employees, the Defence Ministry’s pension budget is very large, which impacts its capital expenditure.

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