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8th Pay Commission: Relief for pensioners! Commuted pension can be received three years in advance

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New Delhi: Central government employees and retirees are expected to get a major relief on the pension commutation front under the 8th Pay Commission.

The long-standing demand to reduce the period for restoration of commuted pension from 15 to 12 years is part of the charter of demands submitted to the Centre by the employee side of the National Council (JCM), a major representative organisation for central government employees.

It is expected that this issue will become a part of the Term of Reference (ToR) of the 8th Central Pay Commission and lakhs of pensioners will benefit from it. Let us tell you that when government employees retire, they get the option of taking a part of their pension in lump sum. This is called commutation of pension.

In return, their monthly pension is deducted so that the government can recover that lump sum amount. Currently, the rule is that this recovery is done in 15 years. That means the monthly pension of that employee keeps getting deducted for the next 15 years and then the full pension is restored after 15 years.

Why is restoration necessary in 12 years?

Government employee unions and pensioners say that the restoration period of 15 years is too long and it is also economically unfair. Due to the reduction in interest rates, the inequality in the calculation of recovery by the government has increased. Due to this, retired employees lose a large part of their own pension.

In such a situation, if this period is increased to 12 years, then the employees will be able to get their full pension early, which will strengthen their financial position – especially at a time when medical expenses and cost of living are constantly increasing.

Major demands of NC JCM and employee unions

The National Council (JCM)- Staff Side has recently submitted a charter of demands to the Cabinet Secretary. It includes several major issues, including reducing the period for restoration of commuted pension from 15 to 12 years.

This demand is now moving towards being included in the TOR of the 8th Pay Commission by the government, thereby strengthening the hope that this change may actually be implemented in the times to come.

What is the status of the 8th Pay Commission?

It is worth noting that the tenure of the 7th Pay Commission is ending on 31 December 2025. Generally, the new Pay Commission is implemented at an interval of 10 years, so the 8th Pay Commission was considered to be implemented from 1 January 2026, but till now the names of the members of the 8th Pay Commission have not been announced by the government nor its Terms of Reference (ToR) have been finalized.

Due to this, it is being speculated that there may be a delay in its process and it will not be implemented on time. Nevertheless, the issue of commuted pension has now become a priority and a positive step is expected from the government in this direction.

What will be the benefit?

If the government accepts this demand and the 12-year period is implemented, then the retiring employees will soon start getting full pension. This will help them become financially independent. After retirement, it will become easier for them to meet expenses like health, social obligations, children’s responsibilities.

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