Military & Aerospace

Increasing Retirement Ages vis-à-vis Savings in Defence Spending & Pension: A Discussion
Star Rating Loader Please wait...
Issue Net Edition | Date : 24 Dec , 2021

Introduction & Acknowledgements

Study of military history in our Defence institutions appear to dominate our thought process so much that we appear to ignore other realities of the present, even the recent past. One such is the ephemeral proposal of reducing the outgo on pay and pensions in the Defence budget by increasing the retirement age, reducing pension for those proceeding on PMR, and overall reduction in pension given that a little more than a decade ago the Army led the ‘paper battle’ for a younger Armed Forces in what ultimately became the Ajai Vikram Singh Committee recommendations of 2005.

The latest proposals have attracted varied reactions, ranging from vociferous support especially by laymen who are military strategists etc to laments and dire implications especially by Veterans. This analysis is based on the information contained in file noting, opinions, advices etc obtained through the RTI Act, 2005 and Govt documents in the public domain. Links/references have been provided for those who wish to have more information.  

Increasing retirement ages of JCOs & Other Ranks 

7th Central Pay Commission (CPC) indicated at para 10.2.4 of its Report that the retirement ages of PBORs is as follows: –

Rank Age and Service
Subedar Major 54 years of age or 34 years of service or Four years of tenure, whichever is earlier
Subedar 52 years or 30 years of service
Naib Subedar 52 years or 30-32 years of service
Havildar 49 years or 26 years of service
Naik 49 years or 24 years of service
Sepoy Group X 42 years or 19 years of service
Sepoy Group Y 48 years or 22 years of service
Navy
Chief Petty Officer and below 52 years
Master Chief Petty Officer I and II 57 years
Air Force
LAC to Junior Warrant Officer 49-52 years
Warrant Officer 52-57 years
Master Warrant Officer 57 years

The proposal was reported to be to increase the age of discharge/retirement of PBOR from 17 years/42 years to 57 years, only for certain trades in the Army.

Pay & Pension for PBOR: After a sustained and long-drawn out series of discussions, the Cabinet approved recommendations the Cabinet Secretary Committee Report of 2012 (CSC 2012), amongst others the following (emphasis supplied): 

“….As regards difference in pension of Rs 3000/- approx in respect of Havildar and Naib Subedar, it may be added that the revised pension from 1.7.2009 for these ranks has been calculated with reference to provisions contained in MoD letter dated 08.03.2010 on the basis of the notional pay in revised pay structure corresponding to maximum of pre-revised pay scale introduced from 10.10.1997 for the rank and group, as per fitment tables attached with SAI 1/S/2008. The same method has also been adopted for calculation of the revised pension for these ranks. However, the difference in pension is due to the difference in the maximum of pay scale for both the ranks/groups and also difference of Rs 1400/- in grade pay (sic) of these ranks….”  (Received vide No. PC-237/RTI/D(P/P)/2014 dated 13.06.2016 from notings on MoD file No. 12 (11)/2012/D (Pension/Policy); More details on https://drive.google.com/file/d/1DEn16ojNIX5FeWx0bGZSVtga4w3n0kfm/view?usp=sharing

The X Group pay of Rs 1400 in the 6th CPC (and not Grade Pay as stated in CSC 2012) has been increased in 7th CPC as follows:

(a) a higher rate of Rs 6,200, for Group X’ trades which requires a qualification equivalent to a diploma recognised by All India Council for Technical Education; and

(b) a lower rate of Rs 3,600, for other Group ‘X’ trades, but not having a technical qualification recognised by All India Council for Technical Education;

Modified Assured Career Progression: Govt accepted and modified the 6th recommendation for Modified Assured Career Progression (MACP) for Others ranks (Air HQ/99141/1/1/AFPCC/D(Air-III/02/2011 dated 03 Jun 2011) whereby a Sepoy is granted an increment and Grade Pay of a Naik on completion of 8 years of service, a Naik is granted an increment and Grade Pay of a Havildar on completion of 16 years and a Havildar is granted an increment and Grade Pay of Naib Subedar on completion of 24 years of service. (It is 10, 20 and 30 years of qualifying service for civilian employees).

Will the savings be significant just by allowing a few thousands soldiers of ASC, AOC and AMC to retire at 57 years of age for the majority of PBOR are in the Combat Arms and Combat Support Arms who would still leave at lower ages. Wouldn’t it have been better to approach the Govt/NSA to over-rule the MHA and insist on implementation of lateral transfer of the combatant PBORs as recommended by 6th Central Pay Commissions (Chapter 2.4 of 6th CPC)?

Increasing retirement ages of Officers – Cols and above

In 2008, when MoD requested MoF for approval of Special Army Instruction No. 2/S/2008 to implement the approved recommendations of the 6th CPC, the Director, Implementation Cell, Department of Expenditure of Ministry of Finance asked MoD whether placing Lt Col, Col, Brig, Maj Gen and Lt Gen in a common Pay Band-4 and granting a Military Service Pay (MSP) of Rs 6000 p.m for officers of the ranks of Col & Brigadier (& equivalent) would not result in the Maj Gens & above (& equivalents) earning lesser pay and pension.

MoD (D-Pay/Services) referred the query to the Controller General of Defence Accounts (CGDA). A few wise men in the HQ CGDA, Ulan Batar Road opined that it would not happen because either the Cols and Brigs would be promoted or they would retire/superannuate.

The CGDA was proved wrong when, subsequently, many Lt Cols reached the maximum of Rs 81000, Cols attained the maximum of Rs 81700 and Brigadiers were paid the maximum of Rs 81900 while the Maj Gen was stuck at maximum of Rs 77000, Lt Gen at maximum of Rs 79000 and Army Cdr at Rs 80000! [MoF Note, action by MoD (D-Pay/Services) and opinion of CGDA at https://drive.google.com/file/d/1PuGOA-p-WGdsW8rT6aXfUbkLUz26lySr/view?usp=sharing].

A similar observation about Resolution for implementing approved recommendations of7th CPC, this time by Additional Secretary (R), MoD, appears to have been buried in the bureaucracy’s labyrinth. Noting released by MoD in 2020 appears to indicate so. https://drive.google.com/file/d/1V1MljKAltpczgzz_RQH9bWuQ8ZAZNAPc/view?usp=sharing

We did not learn much from bureaucratic discussion that the battle that suddenly ceased after Air Ch Mshl Arup Raha (retired) then Chairman, CoSC & CAS retired.  https://drive.google.com/file/d/1V1MljKAltpczgzz_RQH9bWuQ8ZAZNAPc/view?usp=sharing 

Savings by increasing retirement ages vis-à-vis youthful Armed Forces

Doesn’t it contradict the Army HQ’s determined case for more youthful Armed Forces by insisting on the speedy implementation of the Ajai Vikram Singh Committee recommendations? Does the requirement of more youthful Armed Forces no longer exist? If senior appointments are already bloated, won’t later retirements keep them in office longer? 

It was published in the media in 1998 that retirement ages for all Central Govt servants and Armed Forces officers were to be increased by 2 years for purpose of savings in a Pay and Pension bill that increased after recommendations of the 5th CPC were implemented. However, the savings appear to have been marginal at best after implementing the 7th CPC recommendations, if not why are the Armed Forces increasing retirement ages of Armed Force personnel ostensibly to save some more?

Be that as it may, existing and proposed retirement ages for officers are given in table below.

Rank Army Navy Air Force
  All officers All Officers Flying branch Ground duties
  Present Proposed Present Proposed Present Proposed Present Proposed
Col/Capt(IN)/Gp Capt 54 57 56 57 54 57 57 57
Brig/Cdre/Air Cmde 56 58 56 58 56 58 57 58
Maj Gen 58 59 58 59 58 59 58 59

Do we really save? Are there any adverse effects?

For this discussion it is assumed that

(a) Age at Commissioning is 21 years, though some officers would be commissioned at older ages,

(b) Promotion to Col, Capt (IN) & Gp Capt (i) in the 16th year of service for Combat Arms, Executive & Flying branches (age 37 years) and (ii) 18th year of service (age 39 years) for all other Corps/Branches officers.

(c) Promotion to Brig, Cdre (IN), Air Cmde in (i) 29th year (age 50 years) for Combat Arms, Executive & Flying branches and (ii) 31st years (age 52 years) for all other Corps/Branches officers

(d) Promotion to Maj Gen. RADM and AVM at in 32nd year (age 52 years) for Combat Arms, Executive & Flying branches and 34th year (age 54 years) for all other Corps/Branches officers 

(e) There strength of officers is

(i) (approx) 5000 Cols, 800 Capt (IN)/Cdre and 1100 Gp Capts.  

(ii) (approx )1400 Brig, 280 Capt/Cdre (IN) and 250 Air Cmde     

(iii) (approx) Maj Gen is 400, RADM is 90, and of AVM is 120

Effect on Pay Level 13 (Cols & equivalents)

There are 18 indices i.e. 17 increments in Level 13 (Col & equivalent) of the Pay Matrix of the Army/Air Force Officers Pay Rules 2017 & Navy Officers Pay Regulations 2017. This means that, unless promoted, the Cols & equivalents reach the top of the Level 13 pay of Rs 215900 + MSP 15500 = Rs 231400  in 33rd year of service (age 54 years) for Cols of Arms, Executive, Flying branches and 35th year of service (age 56 years) for all others. Therefore, they will draw the maximum pay of their level for a longer period than if the retirement ages were left untouched.

All Cols & equivalents will attain the top of their pay level (13) of Rs 215900+ 15500= Rs 231400 and earn a pension of Rs 115700. It is already happening in the Ground Duties branches of IAF.  

Effect on Pay Level 13A (Brigs & equivalents)

Now, if Cols & equivalents are assumed to be promoted to Brig & equivalent in the 29th year (age 50 years) for Combat Arms, Executive & Flying branches, their pay in Level 13A would start at the 11th index (Rs 188700 + 15500) as per Para 12 of the Rules/Regulations 2017 and reach the top of the pay matrix at Rs 217600+15500 in 5 years (age 55 years).

Other Col & equivalent would, if promoted in 31st year (age 52 years), start at index 12 (Rs 193300 +15500) and reach the top of the pay in Level 13 A in 3 years (age 55 years). By then all of them would be earning Rs 217600 + 15500 = Rs 233100 and pension of Rs 116500. Both categories of officers would stagnate at the maximum till they are promoted.

Effect on Pay Level 14 (Maj Gens & equivalents) and above

On promotion to rank of Maj Gen & equivalent their pay will reduce to Rs 218200, the maximum of Level 14, and with NIL MSP, an increase in retirement age to 59 years bring more higher ranked officers earning lesser than lower ranked officers and stagnating for between 3 and 5 years in that rank.

Illustrative tables are given below (taken from Officers Pay (Amendment) Rules/Regulations 2017)   

Age QS Col (Level 13) Brig (Level 13A) Maj Gen (Level 14) Lt Gen (Level 15)
    Index Amount Index Amount Index Amount Index Amount
37 16 1 130600 +15500
38 17 2 134500+15500
39 18 3 138500+15500
40 19 4 142700+15500
41 20 5 147000+15500
42 21 6 151400+15500
43 22 7 155900+15500
44 23 8 160600+15500
45 24 9 165400+15500
46 25 10 170400+15500
47 26 11 175500+15500
48 27 12 180800+15500  
49 28 13 186200+15500  
50 29 14 191800+15500 12 193300+15500  
51 30 15 197600+15500 13 199100+15500  
52 31 16 203500+15500 14 205100+15500 13 205600
53 32 17 209600+15500 15 211300+15500 14 211800
54 33 18 215900+15500 16 217600+15500 15 218200
56 34 18 215900+15500 16 217600+15500 15 218200
57 35 18 215900+15500 16 217600+15500 15 218200 8 224100
58 36 Retired 16 217600+15500 15 218200 8 224100
59 37 Retired Retired 15 218200 8 224100
60 38 Retired Retired Retired ? 225000

Notes: From Army Officers Pay Rules 2017 & corresponding Regulation for Navy and Rules for Air Force:

  1. Drawal of pay

xxxx                      xxxx                                               xxxx       

 2. Lt Generals who are fit for promotion as General Officer Commanding-in-Chief but overlooked due to lack of requisite residual service will be granted pay in Level 17 on non-functional basis and this non-functional upgradation will count for all the financial benefits associated with Level 17, but shall not count for other privileges associated with office of General Officer Commanding-in-Chief.

12. Fixation of Pay on Promotion or Upgradation on or after 1st day of January, 2016.— The fixation of pay in case of promotion or upgradation from one Level to another in the revised pay structure shall be made in the following manner, namely 

i) One increment shall be given in the Level from which an Officer is promoted or upgraded and he shall be placed at a Cell equal to the figure so arrived at in the Level of the rank to which promoted or upgraded, and if no such Cell is available in the Level to which promoted or upgraded, he shall be placed at the next higher Cell in that Level.

Does increasing retirement ages cut down the Pension Bill?

In Apr 2017, then RM Shri Arun Jaitley (RIP) approved the grant of Personal Pay for Maj Gen & equivalents and above providing the pay/pension did not exceed the Apex I pay of Rs 225000 & Rs 112500 respectively. Then Finance Secretary, Shri Ashok Lavasa returned the file the next day without referring it to then Finance Minister, Shri Arun Jaitley. Before Apr 2017 and ever since thousands of lines and hundreds of pages of notes and correspondence have been exchanged to no avail by MoD (DoD and now DMA) with MoF, DoP&T and CGDA. The only fact that has emerged is that already hundreds of Brigs & equivalents are earning higher pay and pension than even Army Cdr & equivalents (scan of Reply to RTI application at https://drive.google.com/file/d/1tsk9tpjV3_dacA0_TWy_Tl-UtAkxz8UE/view?usp=sharing

That matter – of junior officers earning more than senior officers – has ended up before the Principal Bench of the Armed Forces Tribunal as two recent Orders of the Principal Bench of the Armed Forces Tribunal in AVM P Subhash Babu of Acct branch (Order in OA No. 2342 of 2019 dated 4.11.2020) and AVM A Ahuja of Admin branch (Order in OA No. 1914 of 2020 dated 10.11.2021). Their total emoluments in the rank of AVM were Rs 218200 which is the maximum for Maj Gen/RADM/AVM). Officers junior to AVMs Babu and Ahuja were being paid Rs 217600+ MSP 15500 = Rs 233100. Therefore, in compliance with the Stepping up Rule in Para 9 of the Army/Air Force Officers Pay (Amendment) Rules 2017 & Navy Officers Pay (Amendment) Regulations 2017, their pay was increased to Rs 233100 and pension revised accordingly.

Simultaneously, five Civil Writ Petitions are pending in the hon’ble High Court of Punjab & Haryana challenging the grant of lesser pay and pension to Maj Gen and above and praying for in rem orders. With the ibid AFT orders complied with, all Maj Gens & equivalents who approach the AFT with similar arguments will have to be paid the amount at the top of the pay matrix of Brigs viz. Rs 217600+ Rs 15500 = Rs 233100! Consequently, their pension would be increased from Rs 109100 to Rs 116500.

For brevity a portion of Para 10 of the order in OA No. 1914 of 2020 is reproduced below:

“10. In the present case…..The basic principle of law followed in all such cases is that a junior should not draw more pay or pension than the senior and if such situation arises, the provisions of stepping up of pay has to be given effect to and the pay of the senior stepped up to bring it at par with the junior. This is a provision statutory in nature…..”  

Ergo, if the pay of a Maj Gen serving under a Lt Gen has been stepped up, then the pay of that Lt Gen would also have to be stepped up if he is successful with the AFT from Rs 224100 (Pay Level 15)/224400 (Pay Level 16). That leaves Army Cdr & equivalent earning Rs 225000 (Pay Level 17) seeking redress from AFT for an increase to Rs 233100 because the pay of Maj Gen/Lt Gen serving under him has already been stepped up to Rs 231000!

It would be further aggravated when the pension increases as Cols would be drawing Rs 231400, & Brigs, Maj Gen, Lt Gen and Army Cdrs would retire at the enhanced rates of pay of Rs 233100 with a consequent increase in the Pension Bill, denting the savings further.

Add to this the additional expenditure on subsidised housing, temporary duties, leave travel for self & family, and disability benefits for older officers carrying out active duties of officers of age 54, and how savings would might not result.

Rate this Article
Star Rating Loader Please wait...
The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

More by the same author

Post your Comment

2000characters left