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Department of Personnel and Training (DOP&T), has considered the question of inclusion of Military Service Pay while fixing the pay of re employed defence pensioners. It is noted that as per existing orders, for pre-2006 retirees rank pay is included as a part of pay but for post -2006 retirees, the MSP is not reckoned in the pre-retirement pay for the purposes of pay fixation on re-employment.
Therefore, the Ministry has decided that since the element of MSP is not reckoned in the pay fixation on reemployment, it need not be reduced from the pension either. Hence. In respect of all those Defence officers/personnel, whose pension contains an element of MSP, that need not be deducted from the pay fixed on re-employment.
For further details, download Circular No. 3/19/2009 Estt. Pay II dated 08.11.2010.