In an unprecedented and world-shaking instance, the 8th Pay Commission Machinery has made an appearance in the limelight. The existing system of pension restoration for government employees could potentially be subjected to a drastic cut and alteration, in that this period may be reduced from 15 years to 12 years. Such a circumstance would, if realized, have real effects for lakhs of pensioners across India.
What is Pension Restoration?
According to current rules, any pensioner government employee who decides to go for a commutation gets some part of his pensioned full pay as a lump sum upfront. The corresponding amount, therefore, is reduced in his monthly pension for a period of 15 years. On the expiry of the 15 years, the pensioner gets his full pension.
According to the new buzz, there are talks that from the 8th Pay Commission, restoration could be limited to 12 years, a demand that has been made by most retiree groups for years.
Who Is Most Affected by This?
Prime beneficiaries of this change would be pensioners under central government service, including retired defence personnel, railway employees, etc., under the CCS (Pension) Rules. Since the restoration period has since been shortened, the pensioner shall regain full pension three years in advance, thereby mitigating financial hardship in the latter years of their retirement.
This proposal has been at the heart of demands for decades from pensioners’ associations and can be thought of as an adjustment to what many feelings is an outdated system with respect to increased life expectancy and escalating cost of living.
8th Pay Commission, We Gather What We Have
The 8th Pay Commission has not been officially constituted as of now, and even hence, its scope is under speculation. When constituted soon, it is expected to deal with:
- Revision of salary and allowance of central government employees
- Some form of pension-related reforms, like commutation and DA structure
- Instituting performance-linked incentives, or structural pay grade changes
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