The rank pension case

The rank pension case

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

Need for the scheme:

• Early age of retirement: The other ranks, which are soldiers, usually retire at age 35.
• No benefits from pay commissions: Unlike government employees who retire close to 60, soldiers can thus miss out on the benefits from subsequent pay commissions.
• Salary based pension: And since pensions are based on the last drawn salary, pensions too are impacted adversely.
• Ranks based discrimination: The age when officers in the military retire depends upon their ranks. The lower the rank, the earlier they superannuate.

Earlier pension mechanism:

• Till 1973, there was a concept known as the Standard Rate of Pension, which was similar to OROP.
• Changes brought by 3^rd and 4^th pay commissions led to a situation where 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.
• The Brig K P Singh Deo committee in 1983 recommended a system similar to Standard Rate of Pension, as did Parliament’s standing committees on defence.

Issues:

• 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, impacting capital expenditure.
• The Defence Ministry’s pension-to-budget ratio is the highest among all ministries, and pensions are more than one-fifth of the total defence budget.

Current challenges:

• The petitioners contended that the principle of OROP had been replaced by ‘one rank multiple pensions’ for persons with the same length of service.
• They submitted that the government had altered the initial definition of OROP and, instead of an automatic revision of the rates of pension, any future raising of pension rates would be passed on to past pensioners but the revision would now take place at periodic intervals.
• According to the petitioners, this was arbitrary and unconstitutional under Articles 14 and 21.
• The court did not agree with the argument that the government’s 2015 policy communication contradicted the original decision to implement OROP.
• It said that “while a decision to implement OROP was taken in principle, the modalities for implementation were yet to be chalked out.

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