Weeks of speculation among central government employees and pensioners finally ended after the Finance Ministry confirmed that pension revision is officially part of the 8th Pay Commission’s mandate. The clarification—provided during Rajya Sabha proceedings—brings major relief to lakhs of retired employees awaiting certainty on future pension structures.
Pension Revision Is Included in 8th CPC Mandate
Responding to an unstarred question from MPs Javed Ali Khan and Ramji Lal Suman, Minister of State for Finance Pankaj Chaudhary directly addressed the long-standing doubt.
He stated:
“The 8th CPC will make its recommendations on various issues viz. pay, allowances, pension, etc. of the central government employees.”
This assurance confirms that pension reforms will be examined along with salary structures and allowances—an important win for pensioners who had repeatedly written to the Centre urging explicit inclusion of pension-related matters in the Terms of Reference (ToR).
DA Merger With Basic Pay? Government Says No
A major expectation among employees was the merger of Dearness Allowance (DA) with basic pay, especially since DA crossed the 50% mark in January 2024. Traditionally, this milestone has often sparked discussions on DA merger to provide interim financial relief.
However, the Finance Ministry has made it unambiguously clear that:
“No proposal regarding the merger of the existing dearness allowance with the basic pay is under consideration.”
This statement ends speculation and indicates that any adjustments will likely come only after 8th CPC recommendations are finalised.
8th Pay Commission Officially Constituted
The Central Government formally notified the Eighth Central Pay Commission (8th CPC) on November 3, 2025appointing the Chairman and Members and approving its Terms of Reference.
The ToR empowers the Commission to examine:
- Pay structures and pay matrices
- Allowances for central government employees
- Pension revision mechanisms
- Systemic reforms for performance-linked structures
The commission is expected to submit its recommendations ahead of the next pay revision cycle, after which the government will evaluate and implement the final structure.
What This Means for Employees and Pensioners
The confirmation marks a key step toward the next major overhaul of compensation for central employees. With pension revision now firmly within CPC’s scope, retirees can expect a structured update to benefits aligned with inflation, longevity, and modern service requirements. However, expectations around DA merger must be set aside for now.
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