8th Pay Commission Pension: A big relief news has come for the central government pensioners. The government is seriously considering reducing the restoration period of commuted pension from 15 years to 12 years. This demand has been placed before the government by the National Council and it can be included under the Eighth Pay Commission. If this proposal is approved, then lakhs of retired employees will start getting their full pension three years earlier. This step is very important for those retired employees who are currently living on their deducted pension.
provision of commuted pension
Commuted pension means that when a government employee retires, he gets the option to take a part of his monthly pension as a lump sum. This facility is called commutation of pension. When the employee chooses this option, a certain amount is deducted from his monthly pension. According to the current rules, this deduction lasts for 15 years and after this the employee starts getting his full monthly pension back. This arrangement is useful for those employees who need a large amount immediately after retirement.
Problems with the current system
Employee organisations and pensioners say that the 15-year restoration period is too long and financially harmful. In today’s time, the interest rates of banks have come down considerably while the old formula of commutation is still applicable. Due to this, retired employees are actually at a loss as they lose a large part of their own pension. After retirement, when health-related expenses increase and there is the burden of inflation, getting a lower pension increases their problems further. That is why the demand to reduce this period is gaining momentum.
demands of workers unions
The National Council has recently submitted a list of major demands of the employees to the Cabinet Secretary. The most important demand in this charter of demands is to reduce the period for restoration of commuted pension from 15 years to 12 years. The employee organizations argue that if this period is made 12 years, then retired people will be able to get their full pension sooner. According to the indications received from the government, this issue can be included in the Terms of Reference of the Eighth Pay Commission. This is a positive sign which has increased the hope.
Discussion in official meetings
This issue is also being seriously discussed at the official level. This issue was also raised loudly in the 34th meeting of SCOVA held on 11 March 2025. This meeting was chaired by the Union Minister of State. Officials of the Finance Ministry also admitted that there is a need to make the existing system more equitable and practical. After the meeting, it was decided that this demand would be included in the agenda of the Pay Commission. This is an important step that indicates moving forward towards resolving this issue.
8th pay commission status
So far the government has not made any clear announcement regarding the formation of the Eighth Pay Commission. The term of the Seventh Pay Commission is ending on 31 December 2025. According to tradition, the new pay commission should be implemented from 1 January 2026. However, the names of the members of the commission and the terms of reference have not been decided yet, due to which there is a possibility of some delay in it.
Benefits to pensioners
If this proposal is accepted, lakhs of pensioners will get immediate relief. Getting full pension three years earlier will improve their financial condition. It will become easier to meet rising inflation, health expenses and family responsibilities. This step will show respect to government servants and will better protect their rights.
Disclaimer: This article is written for general information purposes only. Government policies, pay commission decisions and pension rules may change over time. Please confirm the latest information from official government sources. This article is not any kind of financial advice.
