NATIONAL PENSION SCHEME: A CURSE FOR THE SHORT-SERVICE COMMISSIONED OFFICERS
SSCOS
Introduction
“Soldiers don't die when they are shot, they die when they are forgotten”
-Dr. Hiriluk One Piece
The above quote always echoes in the minds of the Short Service Commissioned Officers (hereinafter referred as “SSCOs”)[1] of the Army, Navy, and Air Force whenever they come across the pensionary scheme introduced by the government with a blurred vision called the National Pension Scheme (hereinafter referred as “NPS”)[2] which is applicable to all new entrants to Central Government Service except to Armed Forces joining Government Service on or after 1.1.2004.
It is the right earnest to mention here that sans any doubt the soldiers are the ones who deserve pension the most, as it is their dedication to duties that enable the rest of the country to sleep peacefully at their homes with their loved ones. They ensure the security of the country by serving under difficult conditions and sacrificing all luxuries during the fruitful part of their lives. It is the duty of the State or the concerned organization to take care of the armed forces personnel, especially the SSCOs post-retirement so that they too can lead and live their life peacefully without carrying the financial burden and provide them pensionary benefits. However, the government has miserably failed to consider the plight of the SSCOs under the NPS and left these officers by treating them like stepson.
This article discusses in extenso the problems of the SSCOs who are the only class of government officials in the entire nation who are deprived of benefits under the Old Pension Scheme (hereinafter referred as “OPS”)[3], the NPS, as well as even under Contributory Provident Funds (hereinafter referred as “CPF”).[4]
What Is NPS?
The NPS is a New Pension Scheme (Contribution based Pension Scheme) which was introduced for Central Government employees vide Ministry of Finance (Department of Economic Affairs) Notification No. 5/7/2003- ECB & PR dated 22nd December 2003. NPS was made mandatory for all new recruits to the Central Government service (except the armed forces) from 1st January 2004.
Section 20 of the PFRDA Act, 2013, states that the pension scheme notified on 22.12.2003 has become the National Pension System under the Act. NPS is now regulated under the PFRDA Act, 2013 and the regulation framed thereunder by the Department of Financial Services and PFRDA. With the introduction of NPS w.e.f. 01.01.2004, amendments were made on 30.12.2003 to the Central Civil Services (Pension) Rules 1972, Central Civil Service (Commutation of Pension) Rules 1981, Central Civil Services (Extraordinary Pension) Rules, General Provident Fund Rules, and Contributory Provident Fund Rules to the effect that the benefits under these rules would not be applicable to the Government employees appointed on or after 1.1.2004 and covered by NPS.
The Department of Economic Affairs under the NPS explicitly clarified that the Government had approved the proposal to implement the budget announcement of 2003-2004 relating to introducing a new restructured defined contribution pension system for new entrants to Central and State Government services, except to Armed Forces in the first stage, replacing the existing system of defined benefit pension system.
Contribution Of The Work Force By The Armed Forces In Comparison To Other Autonomous Bodies
It is rightly said that the Strength of the Nation lies in the well-being of its Soldiers. We should be conscious of the fact that undoubtedly, the Indian Armed Forces have played a significant role in guarding one of the oldest civilizations in the world with a kaleidoscopic variety and rich cultural heritage i.e. Bharat by virtue of their sacrifice, valor, and the workforce they possess. It should be noted that the Central Government periodically constitutes a Pay Commission in order to evaluate and recommend revisions of salaries and pensions, for its employees. Recently, the Seventh Central Pay Commission has made recommendations that will apply to 33 lakh Central Government employees, in addition to 14 lakh Armed Forces and 52 lakh pensioners.
As per the Report of the 7th Pay Commission, in 2014, the central government had 47 lakh employees, including 14 lakh Armed Forces. The military constituted 30% of the workforce, followed by Railways with a 28% share in employees. Between 2006 and 2014, all ministries with the exception of the Ministry of Home Affairs (MHA), witnessed a decrease in employees. The number of MHA employees (including the paramilitary forces) went up by 32%, during this period. The total number of central government pensioners as of January 2014, was 51.96 lakh. Defence personnel constituted 46.5% of the total pensioners, followed by the railways with a share of 26.5%.
It is clearly evident that the Central Government employs only 8.5% of the organized workforce and the Armed forces are the biggest employer or the largest provider of the workforce but for the government as well as many politicians it is immaterial as they might be of the view that personnel serving in the Armed Forces may not provide a threshold to their vote bank so leave them in isolation. It reminds me of the statement of Field Marshall Sam Manekshaw who stated: “I wonder whether those of our political masters who have been put in charge of the defense of the country can distinguish a mortar from a motor; a gun from a howitzer; a guerrilla from a gorilla, although a great many resemble the latter”.
How SSCOs Are Facing Discrimination In Pensionary Benefits As Compared To Other Autonomous Bodies under NPS?
There are a total of about 1.5 - 1.6 crore Central and State government servants in the Nation, out of which an exclusive group of about 10 - 12 thousand SSCOs, have been excluded or being put under quarantine from all forms of post-retirement pensionary benefits as well as Contributory Provident Funds, without any reasonable differentia. In addition to Central and State government employees, even employees in Autonomous Bodies/PSUs under Government ministries and departments are also getting the benefits of NPS but that’s not the case for SSCOs.
Moreover, the Short Service Appointment Officers (hereinafter referred as “SSAOs”) of the Indian Coast Guard, which is also a Force operating under the Ministry of Defence (MoD) like the Army, Navy, and Air Force, also receive the benefit of pension/government contribution under the NPS. Therefore, the fact that SSCOs of the Armed Forces (Army, Navy, and Air Force) are the only class of government servants in India, who do not get any form of post-retirement pension or other benefits like Contributory Provident Fund, which is an egregious breach of their right to equality and right to a dignity guaranteed under Article 14 and Article 21 of the Constitution of India.
Discrimination Under OPS
While NPS does not cover SSCOs on one hand, they are also not covered under the OPS prevailing in the country on the other hand, since the commissioned service of SSCOs can range only up to either 5, 10, or a maximum of 14 years in case of extension, whereas, under the OPS the minimum qualifying service to earn pension is 20 years in case of Commissioned Officers and 15 years in the case Personnel Below Officer Rank in the armed forces, as explicitly stated by the Department of Ex-Servicemen Welfare.
Further, there are also provisions made by the Government for the grant of regular pension under the OPS to defense personnel who had initially been recruited as Other Rank/Persons below Officer Rank in the Indian Army, Navy, and Air Force, who were subsequently granted a commission as officers and who collectively served for a minimum period of 12 years duration, including pre-commissioning training.
Pensionary Benefits Post-Retirement To SSCOs v/s PCOs
While the SSCOs are being denied post-retirement benefits in the form of pension or CPF, the Permanent Commissioned Officers (PCOs) are eligible to receive lifelong retirement pension under the OPS as well as benefits ancillary to retirement, such as free medical facilities, pensioner status, and other facilities that are incidental to the status of being a pensioner.
Let me highlight the fact that there is no difference between SSCOs and PC officers in terms of the selection procedure, physical and medical standards, mandatory tests, postings, duties, liabilities, etc. There is also no difference between SSCOs and PCOs in terms of their subjection to service acts such as the Army Act 1950; Air Force Act 1950, and the Navy Act, 1957 and the Rules and Regulations made under the said acts.
There is also no difference between SSCOs and Permanent Commissioned in terms of their subjection to other service rules, regulations, and policies governing their duties, liabilities, and discipline. There is also no difference between SSCOs and PC officers in terms of liability to be sent to battlefields, warzones, counter-intelligence, or Counter-Terrorist operations. Yet, SSCOs have been unreasonably left in the lurch to face financial insecurity after retirement, unlike the permanent cadre of officers in the armed forces.
Judiciary’s Stand On Denial Of Pension To SSCOs
Hon’ble Supreme Court in Chhattisgarh Rural Agriculture Extension Officers Assn. v. State of M.P., (2004) 4 SCC 646 held that Article 14 forbids class legislation but permits reasonable classification subject to the conditions that it is based on an intelligible differentia and that the differentia must have a rational relation to the object sought to be achieved.
However, there is no reasonable or logical basis to deny the benefits of pension and/or contributory provident fund to SSCOs when other government servants have either the exact same selection procedure and service liabilities, or a similarly short tenure of service (as in the case of SSAOs of the Indian Coast Guard), receive the said post-retirement benefits from the government.
The SSCOs spend a considerable number of the most productive years of their lives to serve the country. Once retired, the SSCOs are left to fend for their livelihood themselves without the financial aid of the State in the form of retirement benefits at par with other government servants. The SSCOs after becoming ex-servicemen have to venture out and integrate back into civil society on their own, without any support, monthly financial aid, or even any realistic job opportunities from the government.
Moreover, in the case of LIC of India and Anr. v. Consumer Education & Research Centre and Ors. (1995) 5 SCC 482 the Apex Court highlighted that the Preamble to the Indian Constitution assures socio-economic justice to all the Indian citizens in matters of equality of status and of opportunity with assurance to dignity of the individual; Article 14 provides equality before the law and its equal protection; Article 19 assures freedoms with right to residence and settlement in any part of the country; and Article 21 by receiving expansive interpretation of right to life extends to right to livelihood.
Article 38 in the Chapter of Directive Principles enjoins the State to promote the welfare of the people by securing and protecting effective social order in which socioeconomic justice shall inform all the institutions of national life. It enjoins the State the duty to eliminate inequality in status, to provide facilities and opportunities among the individuals and groups of people living in any part of the country and engaged in any avocation.
It was also held that pension ensures freedom from undeserved want. The basic framework of the Constitution is to provide a decent standard of living to the working people and especially provide security from the cradle to the grave. Every State action whenever taken must be directed and be so interpreted as to take the society one step towards the goal of establishing a socialist welfare society.
It has been long established by the Supreme Court that a pension is not a bounty payable on the ‘sweet-will and the pleasure’ of the Government, and to receive a pension is a valuable right of the Government servants is a well-settled legal proposition. However, SSCOs are the only class of government servants in the whole nation who have been denied the benefit of pension under both the OPS as well as the NPS.
Further, the Defence Accounts Department Office Manual Part V For CDA (Funds) (Revised Edition 2016), issued by the government, mandates the provision of a Contributory Provident Fund for non-pensionable employees of the Armed Forces. Accordingly, SSCOs ought to have been granted government contributions into their Contributory Provident Fund accounts since the very inception of their services as SSCOs.
Government Servants who are ineligible to receive pension get the benefit of Contributory Provident Fund, however, the SSCOs are not granted the same either and thus, have to face grave financial insecurity after retirement till the time they are able to secure, out of their own efforts, a well-paying job/work to support the livelihood of their family.
The Raksha Mantri’s Committee of Experts released their ‘Review of Service and Pension Matters Including Potential Disputes, Minimizing Litigation and Strengthening Institutional Mechanisms Related to Redressal of Grievances’ in 2015, strongly highlighting the issues related to Short Service Commissioned Officers and recommended that a Contributory Pension Scheme on the lines of the New Pension System be considered for all SSC officers who serve for a minimum period of 10 years or alternatively, the NPS itself could be extended to the SSC scheme of the defense services. However, this recommendation of the said Committee has not been executed till date and SSCOs have been left in the lurch.
These grievances have been repeatedly represented by various SSCOs on service forums like Open Forum to Chief of Air Staff and Chief of Naval Staff Discussion Forum. However, no satisfactory reply or relief has been received from the concerned authorities. Since the SSCOs have failed in their attempts to come under the ambit of financial security under the NPS and Contributory Provident Fund, they are undeniably constrained to approach this Hon’ble Court seeking appropriate directions for the protection of their fundamental right to equality and right to a dignified life through grant of benefits of NPS and/or Contributory Provident Fund.
Conclusion
Since the government has left the SSCOs to live their life in isolation these officers are left with no option but to resort to the last bastion of hope of every citizen i.e. the Judiciary. Therefore, the judiciary should direct the government to bring an amendment to the above-mentioned discriminatory policies or scrab these policies in whatever may deem fit to the Government/Judiciary. The Court should hold that there is no rational basis to discriminate the SSCOs with other government officials in the nation, all of whom are entitled to the benefits of either OPS or NPS and/or Contributory Provident Fund, and direct the government or the concerned authorities to carry out necessary changes in the pension regulations of the Army, Navy, and Air Force to accommodate the grant of NPS and Contributory Provident Fund to the Short Service Commissioned officers.
At this juncture, it is crucial to note that just like for SSCOs, there are no deductions towards pension from the salaries of Permanent Commission officers of the Army, Navy, and Air Force, whereas, the latter receives a huge amount of pension under the OPS at the rate of 50% of the last Basic Pay Drawn along with components like Dearness Allowance, etc. SSCOs who serve for a period of 14 years suffer a loss of nearly Rs 20-25 lakhs, SSCOs who serve for a period of 10 years suffer a loss of nearly Rs 10-15 lakhs, and SSCOs who serve for a period of 5 years suffer a loss of nearly Rs 5-8 lakhs, solely due to not being granted the benefits of NPS and/or Contributory Provident Fund.
Article 38 of the Indian Constitution states that the state shall strive to promote the welfare of the people by securing a social order conducive to their welfare. This includes ensuring that citizens, especially those who have served the nation, are provided with adequate means of livelihood and retirement benefits. Therefore, by not providing for any form of pension, the Government is not acting in consonance with the Directive Principles of State Policy and violating the rights of the Short Service Commissioned Officers.
[1] SSC officers are the officers of the Indian Army, Navy, and Air Force who are presently inducted under the 10+4 scheme, wherein the officer serves for 10 years and can exercise the option of extending his service by 4 years.
[2] Govt. of India, Ministry of Finance, Deptt. Of Expenditure vide their OM No.F.No.1)T)(2)/2003/TA/19 dt.14.1.2004 & 4.2.04 introduced a New Defined Contribution Pension Scheme replacing the existing System of Defined Benefit Pension System w.e.f. 01.01.2004.
[3] The Old Pension Scheme (OPS) is a retirement scheme approved by the government. Government employees receive a monthly pension under the OPS. It provides a guaranteed pension for government employees who have completed at least ten years of service based on their last drawn basic salary and the years of service.
[4] The Contributory Provident Fund (CPF) is a pension scheme for non-pensionable government employees in India. The scheme is governed by the Contributory Provident Fund Rules (India), 1962, available at: https://persmin.gov.in/pension/rules_new/cpf_rules_1962_24122013.pdf (last visited on September 22, 2024).
Amar Kumar Pandey is a 4th year Law Student at LLOYD LAW COLLEGE.
About The Author
Amar Kumar Pandey
He is currently working with The Law Chambers of Maj Kavish Aggarwala on a permanent basis.