Govt To Clear Arrears Of Armed Forces Under Revised One Rank One Pension (OROP) Scheme

The Union Cabinet, on December 23, 2022, announced to pay the arrears of armed forces pensioners who retired by June 2019.

The arrears are for the period July 2019 to June 2022. More than 25 lakh armed forces pensioners will benefit from the pension revision.

The revised one rank one pension (OROP) scheme also extends pension to war widows and disabled personnel.

Additionally, the arrears will be paid in four half-yearly instalments, except for family pensioners, including gallantry award recipients, who will receive the arrears in one instalment.

Benefits Armed Personnel Receive

Provident Fund: The Defence Service Officers Provident Fund (DSOPF) and the Armed Forces Personnel Provident Fund (AFPPF) are the authorities that regulate the armed personnel provident fund.

Unlike the Employees Provident Fund (EPF), the central government does not contribute to the Armed Forces Provident Fund.

A contribution of up to 6 per cent of the basic salary is mandatory, and the maximum voluntary contribution is 100 per cent.

Pension

Armed forces personnel get 50 per cent of the last drawn salary as a pension from the government.

Life Insurance

All three defence services: the army, navy, and air force, have their life insurance arms that offer a life cover with a premium amount return facility. These insurance arms are the Army Group Insurance Fund (AGIF), the Naval Group Insurance Scheme (NGIS), and the Air Force Group Insurance Scheme (AFGIS).

So what essentially happens is that when a defence personnel retires, a percentage of the sum assured is given to the person as a lump sum amount. It is calculated based on the years of service they put in.

These are no-questions-asked policies and offer the sum assured to the dependants, irrespective of whether the policyholder’s death is on duty or otherwise. The only exclusions are suicide, immorality, or intoxication. These policies also provide a disability cover, but with some exclusions.

It is a mandatory deduction from the salary that every serving officer and non-officer has to pay, irrespective of their rank or posting. For people deployed in conflict areas, borders, others, or those in high-risk jobs like pilots, there is an additional insurance cover, for which an extra premium must be paid.

Health Benefits

Health and medical benefits are available for both serving and retired personnel and their dependents.

Currently, a veteran who is retiring from service must pay a sum of about Rs 1,25,000 to get health and medical benefits for himself and his dependants under the Ex-Servicemen Contributory Health Scheme (ECHS).

However, children of these retiring servicemen are also eligible for these health and medical benefits up to 25 years of age. This age limit is waived in case of permanent physical or mental disability of the children.

To read more about how armed forces should go about planning their finances, read: Armour Plating For Financial Security