In a major reform, the Armed forces have proposed to increase the age of officers and review the pension formula of those opting for premature retirement (PMR). The two-pronged approach will help in retaining skilled manpower and reducing the burgeoning pension bill.
The proposal moved by the Department of Military Affairs (DMA), headed by Chief of Defence Staff (CDS) General Bipin Rawat, comes at a time when the Armed forces are also considering increase in age of jawans. At present, they retire after 15 years of service and still in prime of their youth.
The DMA proposes to increase the retiring age of Colonels from the existing 54 to 57, for Brigadiers from 56 to 58 and for Major Generals from 58 to 59. The same is applicable to equivalent ranks in other Services.
“It is proposed that a draft Government sanction Letter (GSL) may be kindly processed for perusal by Secretary DMA by November 10,” a letter issued by Office of Secretary DMA dated October 29 said. The age of retirement of Junior Commissioned Officers (JCO) and Other Ranks in Logistics, Technical and Medical branches is also proposed to be increased to 57 years.
Explaining the rationale for these proposals, the DMA noted that many personnel retired due to lesser vacancies and some service restrictions. At the same time, there were several specialists and super specialists who were trained for high skill jobs in the services who left the services to work in other sectors.
“Such loss of high-skilled manpower results in void in the services skill matrix and is counter-productive to the armed forces,” the letter said, adding that in view of this it had been decided to review the pension entitlements.
The pension is proposed to be reviewed in four slabs for PMR of personnel. For 20-25 years of service, 50 per cent of entitled pension; for 26-30 years of service, 60 per cent of entitled pension, for 31-35 years of service, 75 per cent of entitled pension and full pension for 35 years and above service. “There will be no change of pension entitlements of battle casualties,” the letter said.
At present, the existing pension is 50 per cent of the last salary drawn for an officer for 20-25 years of service. If the proposal is approved, pension will be halved.
Sources said this proposal may not be welcome by the serving officers who are about to retire and various ex-servicemen organisations. They also said the DMA created last year along with the institution of the CDS does not have the mandate to alter pension formula any may lead to clutch of law suits.
The DMA is responsible for human resources issues besides coordination between the Army, Navy and IAF.
Justifying the move to review the existing pension formula, sources said the need for such a step was felt as there is concern over the increasing pension bill after the grant of One Rank One Pension (OROP).
The pension bill in the current financial year is pegged at Rs 1,33, 819 crore which is more than 29 percent of the Defence Ministry budget of Rs 4,71, 372 crore.