The 8th Pay Commission will have the responsibility to examine the structure of pensions and other retirement benefits for Central Government employees appointed on and after January 1, 2004, as their retirement benefits are covered by the National Pension System (NPS). The Constitution defines pension as a payment for past services rendered, rather than an ex-gratia payment.
The Supreme Court of India has issued landmark judgments on the nature of pensions, the government’s obligations, and the recognition of different categories of pensions and pensioners. These judgments have settled the issues of pensions and pensioners’ rights, ensuring that a pensioner can live with decency, independence, and self-respect at a standard equivalent to their pre-retirement level. The pension is attached to the office and cannot be arbitrarily denied. The rules governing pension and the rules governing Provident Fund (PF) contributions are entirely different, and any classification among pension retirees and PF retirees does not violate Article 14.
Demands made with regard to Pension
As we look ahead to the 8th Pay Commission, there are various demands related to pensions that need to be addressed for civil personnel and those common to both civil and defence personnel. Some of the key demands include raising the existing rates of pension and family pension, with the quantum of minimum pension equaling the minimum wage. Additionally, there is a need to increase the rate of additional pension and family pension for older pensioners and reduce the age eligibility for its receipt from the existing 80 years. The time period of seven years for enhanced family pension should also be increased, while the gratuity ceiling of ₹10 lakh should be enhanced and indexed. There is a need for rationalisation of death gratuity and reduction in the time period for restoration of basic pension, reduced on account of commutation. The 8th Pay Commission should also consider ex-gratia lump sum compensation, enhancement of the ceiling of Earned Leave for purposes of Leave Encashment, and enhancement in the existing rates of Fixed Medical Allowance and Constant Attendance Allowance. Finally, there is a need for parity in pension between pre and post Seventh CPC retirees.
Demands for Higher Pension and Family Pension Rates in the 8th Pay Commission
There are numerous demands for an increase in pension rates from the current level of 50 percent of last pay drawn. Many entities have also requested an increase in family pension rates from the current 30 percent to 50 percent of the last pay drawn.
The 7th Pay Commission had also recommended delinking pension from the qualifying service of 33 years, which had already liberalized the pension dispensation.
Moreover, the recommendations of the 8th Pay Commission regarding the pay of both civilian and defence forces personnel will lead to increase in the pay drawn, and consequently, in the “last pay drawn”/”reckonable emoluments”. Hence, the 8th CPC may need to do a very detailed analysis before proposing any changes or any further increase in the rate of pension and family pension from the existing levels.