Pension fixation has been suggested by the 7th Central Pay Commission for civil employees (inclusive of Central Armed Police Forces personnel) whose retirement date was prior to January 1, 2016. The Commission has provided two formulations along with illustrations for pension fixation – one for those whose retirement date was prior to 2016 and the other for those whose retirement date was prior to 2006.
The initial formulation of pension fixation is expected to take a while because each pensioner’s records must be verified so that the number of time they have earned increments in the retiring levels are ascertained.
7th Central Pay Commission’s Recommendations for Pension Fixation
All civilian personnel, inclusive of those employed by the Central Armed Police Forces, whose retirement date was before January 1, 2016, will be changed in the Pay Matrix after recommendations from the Commission. The fixing of pension will be based on the grade pay and pay band at the time of retirement for these personnel.
In order to determine the retiree’s notional pay, the amount will be increased through the addition of the number of increments the individual has earned in the particular level while serving the forces. The rate at which the increments will be added is 3%, and 50% of the overall amount arrived at will be the personnel’s revised pension.
For the computation of the second formulation, the pension which was fixed when the 6th Central Pay Commission’s recommendations were implemented, will be multiplied into 2.57 in order to determine the revised pension’s alternative value.
Illustration of Pension Fixation
In case a pensioner has retired and the last pay he had received was Rs.79,000 on May 30, 2015, when the recommendations of the 6th Central Pay Commission were implemented, having received three increments between Rs.67,000 and Rs.79,000:
|Basic pension fixed in the 6th Central Pay Commission||Rs.39,500|
|First pension fixed in the 7th Central Pay Commission (with the use of multiple of 2.57)||Rs.1,01,515 (Option I)|
|Minimum of the corresponding pay level in the 7th Central Pay Commission||Rs.1,82,200|
|Notional Pay fixation on the basis of three increments||Rs.1,99,100|
|50% of the notional pay arrived at||Rs.99,550 (Option II)|
|Pension amount admissible (Higher of Option I or Option II)||Rs.1,01,515|
In the second case, if a pensioner has retired and the last pay he received was Rs.4,000 on January 31, 1989, after the implementation of the recommendations made by the 4th Central Pay Commission, having received nine increments in the 3000-100-3500-125-4500 pay scale, the pension fixation will be as follows:
|Basic pension fixed in the 4th Central Pay Commission||Rs.1,940|
|Basic pension after revisions in the 6th Central Pay Commission||Rs.12,543|
|First pension fixed in the 7th Central Pay Commission (with the use of multiple of 2.57)||Rs.32,236 (Option I)|
|Minimum of the corresponding pay level in the 7th Central Pay Commission||Rs.67,700|
|Notional Pay fixation on the basis of nine increments||Rs.88,400|
|50% of the notional pay arrived at||Rs.44,200 (Option II)|
|Pension amount admissible (Higher of Option I or Option II)||Rs.44,200|
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