One Rank One Pension Scheme

Table of Contents

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.