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Govt To ‘Re-Fix’ OROP Pension: What Is The Scheme, How Does It Benefit Armed Force Retirees?

Before implementing the One Rank One Pension (OROP) scheme, the pension amount was calculated based on the personnel’s last drawn pay (pay band) at retirement.

July 8, 2024
July 8, 2024
OROP pension

OROP pension

The government is considering a proposal to re-fix pensions under the One Rank One Pension (OROP) scheme. According to a PTI report citing unnamed sources, the subject was discussed at a Union Cabinet meeting last week, although there was no official word. The OROP scheme, they say, is revised every five years, and the previous revision took place in July 2019.

As per the scheme, a retired personnel gets the same pension for the same rank, regardless of the retirement date. This system was introduced to address the disparity in pensions between the officers. In the previous system, the pension was calculated based on the last salary. For example, a lieutenant general retired in 1995 would receive almost 10 per cent lower pension than a colonel retired after 2006, even though they had the same service length. Similarly, a jawan retired in 1995 would get 80 per cent less pension than a counterpart retiring after 2006.

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Benefits of OROP

OROP’s objective is to provide an equal pension for retirees of the same rank and length of service and to reduce the pension gap between past and present retirees. Simply put, the OROP pension is calculated based on the average pensions of the retired personnel who were in the same rank and served the same amount of time as of 2013. OROP protects those receiving above-average pensions while paying the arrears to others semi-yearly. However, all the family pensioners, including those receiving special, liberalised family pension and gallantry award winners, will receive the arrears in one instalment.

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OROP Implementation

The government accepted the OROP plan, a poll promise, by way of its mention in the president’s address to both houses of parliament in 2014, after the Bharatiya Janata Party (BJP) swept the national elections for 16th Lok Sabha, giving them significant numbers in parliament. After the government’s decision, the defence ministry held a series of meetings to determine the details of its implementation. Extensive consultations with independent experts and ex-servicepersons were also held to streamline OROP’s implementation. Then, on December 23, 2022, the Union Cabinet approved the OROP scheme. The government allocated Rs 1,000 crore in the budget to implement OROP. It also provided for the payment of arrears.

In a press release on April 28, 2023, the Ministry of Defence said, “Arrears on account of revision of pension from 01.07.2019 till the date of its implementation shall be paid by the pension disbursing agencies in four half-yearly instalments. However, all the family pensioners, including those in receipt of special/liberalized family pension and all gallantry award winners shall be paid arrears in one instalment.”

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