Increasing the Qualifying Service for Pension

Gp Capt CRR Sastry (Retd.)

Jt Secretary, TSEWA

Gp Capt CRR Sastry was commissioned on 28 December 1977 in Administrative Branch of IAF. He is an alumnus of DSSC who worked in Personnel Staff of IAF. The views expressed in this article are compiled from the discussions on the matter during meetings of TSEWA and are intended to provide in puts for decision makers.

  Armed Forces is not just another department of Government and the Military Service is not like any other Government Service. Armed Forces is the last resort of the Nation and each member of the Services is a defender of not only the borders of the Country but also our Democracy and the Constitution. The oath taken by each member of Armed Forces in which he swears allegiance to the Constitution and promises to obey the orders of Superior Officers in defence of the country even to the risk of his life is no empty promise. Under such circumstances, the Government has to think with much circumspection on any changes to the Terms and Conditions of Servicemen.

Recently it is understood that Army Headquarters is considering a proposal to increase the qualifying service required by Soldiers of Infantry to earn full Pension from 15 to 20 years. It seeks to disincentivise Premature Discharge from service by imposing a cut of 25% in the Pension of soldiers who seek premature discharge after 15 years of service and 15% in the Pension of Soldiers who seek premature discharge after 17 years of service. Further there is also a proposal to make Training Period of Soldiers non-Pensionable. All these steps are proposed with the avowed aim of reducing the Pension Liability of Government. Since the issue concerns the morale of the defenders of the Nation, we need to deliberate the matter in great detail by delving deep on the Origin of Pensions, Differences in Service Conditions between Military and Civil Service, Measures to reduce Pension Liability, Legal Aspects of Military Service, Policy Implications, Morale Aspects, Humanitarian Aspects, Likely Repercussions and finally make a few recommendations.

Pensions and their Origin. It is believed that Pensions as we see them today originated in Greek and Roman Empires where the Legionnaires were rewarded for their past services in the Imperial Army with grant of lands and Cash grants on a monthly basis. The Pensions till the advent of a welfare state were unheard of for any government servant other than a soldier. The Pension for a soldier is of greater significance than to a civil servant who enjoys 33 years of service mostly at home town or near to that place and retires with substantial pension compared to a Soldier who has seen service always away from his home state and only till the end of his youth say 40 years unless he is lucky to become a JCO. Thus, the quality of the post retired life of a soldier is entirely dependent on the Pension he receives and any cut in such pension what so ever will only mean penury.

Differences in Service Conditions between Military and Civil Service. The Military person retires early with about 20 to 26 years of service depending on his promotion to next rank. His non promotion is often due to the steep pyramidical structure of the Army and consequent lack of vacancies rather than his unsuitability for promotion. Early retirement either due to non-promotion at the end of his enrolment term or due to Individual opting out knowing that he will not be promoted, always means lower last pay drawn and hence lesser Pension, Gratuity, Leave Encashment value and Commutation value of Pension. Now when the soldier reaches home with retiral benefits, future stares hard at him. His first requirement will be to acquire a dwelling unit as continuous stay away from joint family home has alienated him from his extended family and this will exhaust all his terminal benefits. Compare this with the position of his class mate in school who managed a Civil Post in Government Department. Staying near home or at the home town itself, he is able to make his dwelling unit much before retirement and also acquire assets that would yield substantial income to him post retirement. If he is a Post 2004 recruit, he may not enjoy the inflation proof Pension but the Contributory Provident Fund @12% per month gives him good pension. Added to this he would get higher Gratuity and with the assets he has acquired, the quality of his post retired life would be much better.

Measures to reduce Pension Liability. If the Government is serious about reducing the Pension Liability of a Soldier, assured lateral employment for them in or near his home town is a reasonable approach. Several Pay Commissions have recommended lateral employment of the trained and disciplined Veterans of Armed Forces in Government and Public Sector Undertakings and such recommendations did not even come for serious consideration prior to implementation due to the opposition from trade unions and others. Private Sectors will always be willing to employ Veterans provided they see tangible benefits in the form of Tax Benefits.

Legal Aspects of Military Service.

(a) The Military Service is much more onerous than that of Civil Department. A person accepting the appointment to a civil post is an agreement of service with only civil liabilities and he has all fundamental rights guaranteed by the Constitution, and also the benefits of Trade Unions and Collective bargaining. A person enrolling himself enters into a valid contract which has both civil and criminal liabilities. His fundamental rights are severely curtailed and he has no benefit of Unions and Collective Bargaining.

(b) Onerous service conditions imposed on a Citizen who has volunteered to join the Army to guard its borders of the Nation and protect its Sovereignty and Integrity against the internal and external threats. All the restrictions imposed on his rights are the requirements of the Nation and hence his terms of retirement as well as the early retirement should be generous and their implementation should have a positive tilt in favour of the Veteran and not against him.

(c) If due to certain personal, family or health requirements or due to lack of career opportunities he needs to take early retirement and the Army agrees to release him, then it will be grossly inequitable and onerous to impose cut in his pension. In any case the Army has the right to refuse the early retirement sought by an individual but having agreed for his early retirement and achieving the aim of getting the unwilling persons out, the army should not impose cut on his pension.

(d) The proposal to make Training Period not countable for Pension seems to be ill advised and it will not stand the scrutiny of law as it runs counter to many judgements of the Hon’ble SC especially the one in case of Air Force Met Officers. Any period of service for which a person has been paid should be counted for promotion. More over in case of enrolled persons such Training period will count for the term of Engagement.

Policy Implications.

(a) Will this policy of imposing cuts on Pension for early retirement applicable only for Infantry or will extend in due course to other Arms/Services of the Army as well?

(b) When the individual dies his wife also will bear the brunt of his early retirement. On the demise of her husband she will get 60% of his reduced pension only as her Family Pension.

(c) The Army will not agree for early retirement unless the Public Interest does not suffer or it is advantageous for the Army as well to let the person seeking early retirement go. When an NCO who has no chance of Promotion seeks retirement and is discharged, a younger man gets promotion and the Army has a younger and better motivated NCO. Thus, it is a “win-win” situation for both parties and there seems no justification for imposing a cut in the Pension.

(d) It appears to be another attempt to introduce a rule similar to that of 33-year rule. Since the 33-year rule stands abolished no new similar rule should be imposed. By bringing this measure, we can be assured that the Army would retain inefficient and demoralised troops and a few good men who have very genuine grounds to seek early retire, will lose heavily. It is a “lose-lose” situation for both parties to the Enrolment Contract.

Morale Aspects.

(a) Infantry is often called the King of the Army as Infantry alone can physically hold the land and dominate the enemy. No war can be won without a very well trained, healthy and physically fit Infantry with very high degree of morale. If we send out such signals as even consideration of the proposed policy, the morale of the troops will nose dive. It takes just a single very ill thought proposal to shatter the morale of the Soldiers but will take years to restore it.

(b) A happy and well settled Veteran is the best Poster Boy for any recruitment campaign. He will be the best Brand Ambassador of the Army in the villages for attracting the best available talent among the youth to join the Army.

(c) The present state of Employment market where in jobs are few and seekers are many may lull many to think that Army will never fall short of men for recruitment. In case of Officer Recruitment, we already find a curious situation where we thousands of young men ready to join as Officers but most of them are virtually untrainable to make an Officer. Consequently, we find shortfall running to thousands in Officer Cadre. We only pray that such a situation does not arise for enrolment

(d) Further it would be disastrous for the Army and Country if more fit and brave youth choose to join the Services as this measure will make enrolment into Infantry very unattractive. Less fit persons in Infantry which is the cutting edge of the Army would not be good for Army.

(e) A Veteran who is disgruntled due to huge cut un his pension because he had to seek early retirement due to circumstances beyond his control will hardly inspire other to join the Army. A serviceman who could not seek early retirement for fear of huge cuts in Pension will not be a role model soldier or an asset to his unit or Army. Such cut of 15 to 25% Pension will be for not only his life time but also for his spouse when he is no more.

(f) The Irony of situation will hit very hard on him when law makers with one term of 5 years or even part of it can enjoy full pension for life, but he a soldier who has completed 15 years of service and sought retirement due to health reasons, family circumstances or lack of Promotions is made to huge cut ranging from 15 to 25% of their Pensions.

(g) The detailed financial impact of the proposal on the pensions of Sepoy, Hony Naik, Naik, Hony Havildar and Havildar of X and Y groups with 15 years and 17 years is worked out.

Humanitarian Aspects.

(a) A soldier is enrolled at an age between 17- 20 and if he does not get the promotion to higher ranks of Naik and Havildar, he is forced to retire at the age of 39. Promotions are scarce in Army due to the steep pyramidical structure and his family life is disturbed due to frequent postings to Field Areas/ Non-Family Stations.

(b) Long absence from his home town and the Family Estate alienates the soldier considerably. Often, he is deprived of his share of the family assets and the elders in the family tend to support the siblings of the soldiers who stay with them. Hence the Local Administration is unable to protect the interests of the serving Soldiers and on completing his service in the Army, a Veteran finds himself deprived of his share of family assets and if he tries for an early retirement to protect his property, he has to face a severe cut in his pension.

(c) Ultimately the Veteran may not be able to get his share of family assets and the cut due to early retirement entail loss ranging from Rs 4591 to 5516 per month for Sepoy and Havildar of X group with 15 years of service and Rs 4282 to 4851 per month for Sepoy and Havildar of Y group with 15 years of service. In case of NCOs who seek early retirement after 17 years of service the loss will be Rs 2755 to 3384 per month for X group and Rs 2569 to 2929 per month for Y group. The family Pensioners will also lose 60% of the above amount.

(d) It will be very sad that Soldiers who retire will lose as much as Rs 55,000 per annum if he is in X group and Rs 51,000 if he is in Y group. Their family Pensioners get a small solace as they draw the minimum Pension which can’t be reduced further the Losses suffered by Soldiers of different ranks and groups after who choose to exit after serving for 15 years and 17 years are in tables 1 and 2.

Losses suffered by Soldiers and their Family Pensioners who seek Discharge after 15 Years

Losses incurred by PensionersLosses of Family Pension

Sl No	Rank	Years of Service	Group in Army	Pension as per Last Pay Rs	Pension after Cut Imposed Rs	Loss Incurred per month Rs	Loss incurred per Yr. Rs	Family Pension per month Rs	Reduced Family Pension per Month Rs	Loss incurred by Family Pensioner per month Rs	Loss Incurred by Family Pensioner Per Year Rs	Remarks
1	Sepoy	15	X	18363	13772	4591	55092	11018	9000	2018	24216	Minimum Pension
2	Sepoy	15	Y	17129	12847	4282	51384	10277	9000	1277	15324	Minimum Pension
3	Hony Naik	15	X	18928	14196	4732	56784	11357	9000	2357	28284	Minimum Pension
4	Hony Naik	15	Y	17129	12847	4282	51384	10277	9000	1277	15324	Minimum Pension
5	Naik	15	X	21254	15941	5314	63768	12752	9564	3188	38256
6	Naik	15	Y	18427	13820	4606	55272	11056	9000	2056	24672	Minimum Pension
7	Hony Havildar	15	X	21254	15941	5314	63768	12752	9564	3188	38256
8	Hony Havildar	15	Y	18427	13820	4606	55272	11056	9000	2056	24672	Minimum Pension
9	Havildar	15	X	22063	16547	5516	66192	13238	9928	3310	39720
10	Havildar	15	Y	19404	14553	4851	58212	11642	9000	2642	31704	Minimum Pension

Table 1

Loss Suffered by NCOs and Below who seek Discharge after Completing 17 Years of Service

Loss Incurred by Pensioners Loss Incurred by Family Pensioners

Sl No	Rank	Group	Pension as per last Pay Drawn per Month Rs	Reduced Pension Rs Per Month	Loss per Month Rs	Loss per Annum Rs	Family Pension as per Last Pay Drawn Rs per month	Reduced Family Pension Rs per Month	Loss per Month Rs	Loss Per Annum Rs
1	Sepoy	X	18363	15608	2755	33060	11018	9365	1653	19832
2	Sepoy	Y	17129	14560	2569	30828	10277	9000	1277	15324	Minimum Pension
3	Hony Naik	X	18928	16089	2839	34068	11352	9649	1703	20436
4	Hony Naik	Y	17129	14560	2569	30828	10277	9000	1277	15324	Minimum Pension
5	Naik	X	21254	18066	3188	38256	12752	10840	1912	22944
6	Naik	Y	18427	15663	2764	33168	11056	9398	1658	19896
7	Hony Havildar	X	21254	18066	3188	38256	12752	10840	1912	22944
8	Hony Havildar	Y	18427	15663	2764	33168	11056	9398	1658	19896
9	Havildar	X	22559	19175	3384	40608	13535	11505	2030	24360
10	Havildar	Y	19527	16598	2929	35148	11716	9959	1757	21084

Table 2

Likely Repercussions. What could be the consequences of the proposal if implemented? They could be:

(a) The Morale of serving personnel especially those not getting promotions and mulling on early retirement will be shattered and they may not be assets to the Units.

(b) Attracting talented youth for recruitment will become a challenge as the youth perceives that Policies detrimental to them are getting implemented in the Army.

(c) The legal footing of the proposals seems quiet suspect and may find challenges in AFT. It is possible that the Policy does not pass the test of Judicial scrutiny.

Recommendations. Having considered all aspects of the proposal we at TSEWA make the following considered recommendations:

(a) The proposal of not counting Training Period for Pension should not be accepted as every day of service for which a person is paid is counted for Pension. The proposal is not based on a sound legal footing.

(b) The proposal of disincentivising the PMR by imposing cuts ranging from 15% to 25% should not be accepted as it is legally flawed and would lead to poor morale among the troops.

(c) The PMR when sought by persons who are likely to be promoted should be granted selectively, so that army does not lose good NCOs and the strength does not deplete.

(d) The PMR when sought by persons with no promotion avenues should be granted liberally as it helps Army to grant more promotions to eligible soldiers and keep the age of NCOs younger.