One Rank One Pension Scheme

Context: The Union Cabinet approved a pension revision for pensioners from the armed forces and their families under the One Rank One Pension (OROP) scheme.

About One Rank One Pension (OROP) Scheme

• OROP means that any two military personnel retiring at the same rank, with the same years of service, must get an equal pension.
• Military personnel across the three services fall under two categories, the officers and the other ranks.
  • The other ranks, which are soldiers, usually retire at age 35.
  • Unlike government employees who retire close to 60, soldiers can thus miss out on the benefits from subsequent pay commissions.
• And since pensions are based on the last drawn salary, they are impacted adversely.

Significance of One Rank One Pension

• Bridges pension gap: OROP bridges the gap between the rates of pension of current and past pensioners at periodic intervals.
• Retrospective coverage: The scheme was implemented with retrospective effect from July 1st, 2014 with 2013 as the base year.
• The armed forces personnel who retired by June 30, 2014, are covered under the scheme.
• Supreme Court in March, 2022, upheld the One Rank, One Pension scheme for armed forces personnel.
  • Court did not find any constitutional infirmity in the OROP principle and the government’s notification dated November 7, 2015.

Revision of Pension

• In 2015, the government issued policy letter for revision of OROP pension with effect from 1 July, 2014.
• In the letter, it was mentioned that in future the pension would be re-fixed every 5 years.

Highlights of Recent Revision of Pension

• Pension of the past pensioners would be re-fixed on the basis of average of minimum and maximum pension of defence forces retirees of calendar year 2018 in the same rank with the same length of service.
• Beneficiary: More than 25.13 lakh people, including over 4.52 lakh new beneficiaries, armed forces pensioners and family pensioners will benefit.
• Coverage: Armed forces personnel with a retirement date up to June 30, 2019, excluding premature retirees with effect from July 1, 2014, will be covered under this revision.
• Total Expenditure of Revision:
  • Rs 8450 crore at the rate of 31% Dearness Relief (DR)
  • Rs 19,316 crore in arrears w.e.f July 1, 2019 to December 31, 2021 based on DR at the rate of 17% and at the rate of 31% DR for the period between July 1, 2021 to December 31, 2021.
  • Rs 23,638 crore for arrears w.e.f July 1, 20219 to June 30, 2022.

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