A very important news has come to light for lakhs of central employees and pensioners who are eagerly waiting for the recommendations of the Eighth Pay Commission. In the coming time, the Eighth Pay Commission may take a big decision on a very old rule related to pension commutation. In fact, the National Council of the Joint Consultative Machinery (NC-JCM), the leading organization of the employees, has placed a very big and legitimate demand related to this before the government and the Pay Commission.
Full pension should be restored in 11 years instead of 15 years. Central employees and pensioners organizations are demanding that after taking lump sum amount at the time of retirement, the reduced monthly pension should be fully restored in about 11 years instead of 15 years. Employees argue that the current 15-year system is based on economic conditions and data that are nearly four decades old, whereas many important parameters like interest rates and mortality rates have changed significantly over time.
What is pension commutation rule? According to the rules, central government employees can commute a maximum of 40 percent of their basic pension at the time of their retirement. This simply means that the employee gets a large amount as lump sum advance at the time of retirement. However, after this the commuted amount is deducted from the pension received every month. According to the current rules, this deducted amount is added to the pension again after completion of exactly 15 years. But employee organizations say that this old system is no longer relevant because interest rates have fallen drastically over the years and the average life span of people has also increased.
How much has mathematics changed since 1986? If we look at the data of Bharat Pensioners Society (BPS), when this 15-year system was implemented in 1986, the interest rate was around 12 percent and the average life expectancy was around 57.7 years. According to BPS analysis, due to changes in interest rates and other parameters, the estimated recovery period has reduced from 15 years in 1986 to about 11.45 years in 2008 and to only 11.25 years in 2023.
Pensioners will get direct benefit of lakhs of rupees If the government accepts this demand and the restoration of commuted pension is reduced from 15 years to 11 years, then pensioners will get huge benefits. For example, if a pensioner's basic pension is ₹ 35,000, then due to restoration of pension 4 years ago, he will get additional monthly pension, which can give him a huge financial benefit of about ₹ 6.72 lakh in total.
When can the Pay Commission report come? At present, the Eighth Pay Commission is continuously holding several rounds of meetings and taking suggestions and demand letters from various employee organizations. According to experts and experts, the Eighth Pay Commission can prepare its final report and submit it to the government by the first half of next year.