8th Pay Commission pension: Why is one rank, one pension a prominent demand for Level 1-18 employees?

Armed Forces personnel, judges of the Supreme Court and High Courts and the Comptroller and Auditor General of India get the benefit of the one rank, one pension (OROP) scheme. As the 8th Pay Commission is consulting stakeholders to prepare its report, many employee and pensioner bodies have prominently raised their demand that the OROP scheme should also be implemented for all central government Level 1-18 civilian employees.

C Srikumar, general secretary of the All India Defence Employees’ Federation (AIDEF), told ET Wealth Online that the OROP can end the disparity between the pensions of central government civil employees retired from the same designation at different times.

Manjeet Singh Patel, President, All India New Pension Scheme Employees’ Federation, told ET Wealth Online that pension disparity is vast despite pensioners who retired years ago getting pay commission pension revision benefits.


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The OROP is limited to pensioners who get their pension under the Old Pension Scheme (OPS).

What is the one rank, one pension (OROP) scheme?

The OROP is a pension parity scheme, according to which persons who held the same post/level and rendered comparable qualifying service receive a comparable pension, irrespective of the date of their retirement.

To put it into perspective, pensioners who held the same post/level and rendered comparable service receive different pensions solely because they retired under different Pay Commission regimes.

Which employees get one rank, one pension benefits?

The central government introduced the OROP for Armed Forces personnel in 2015, with financial benefits retrospectively effective from July 1, 2014.

Retired judges of the Supreme Court and High Courts and the Comptroller and Auditor General of India also get the OROP benefit.

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Have past pay commissions also addressed the pension disparity issue?

Sharing the history of past pay commissions’ views on pension disparity, Srikumar says, “The 5th Pay Commission recommended that the pension of pre-1986 retirees should be updated through notional fixation of pay as on January 1, 1986, applying the formula applicable to serving employees. It also recommended that the consolidated pension should not be less than 50% of the minimum pay of the revised scale of the post held at the time of retirement.”

The 7th Pay Commission also recognised the importance of pension parity from the perspective of inter-temporal equity and referred to the objective of progressively bridging the gap between past and future pensioners, says Srikumar.

What are the employee and pensioner bodies’ views on pension parity through the OROP?

The AIDEF says notional fixation can provide a practical mechanism for bringing past pensioners forward through successive pay commission revisions.

“Such notional fixation can be based on the post/level held at the time of retirement and the career progression applicable to that post. It should not be restricted merely to the historical scale of pay applicable on the date of retirement,” says AIDEF.

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This distinction can also be important where a post is subsequently upgraded, reclassified or placed in a higher level.

Citing an example, the AIDEF says, if a particular post is upgraded after some employees have retired, those who had earlier retired from the same post should not be permanently excluded from the benefit of the higher status attached to that post. Otherwise, the date of retirement itself becomes the determining factor in pension entitlement.

The AIDEF recommends that pension should ordinarily be fixed at 50% of the resultant notional pensionable pay, subject to the applicable minimum pension for the corresponding post/level and other statutory provisions.

What is the AIDEF's proposed OROP mechanism for civilian pensioners?

The AIDEF suggests that the 8th Pay Commission consider these factors while implementing the OROP for all pensioners

• Notional progression should take into account:
• The post/level held at retirement;
• The corresponding pay applicable to that post/level;
• The increments earned during service;
• Promotions or other career progression actually earned; and
• Subsequent revision/upgradation of the corresponding post/level, wherever applicable.