7th Pay Commission Pension - Cabinet approves modification in Pension fixation based on Via Media suggested by Pension Committee

7th Pay Commission Pension – Cabinet approves modification in Pension fixation based on Via Media suggested by Pension Committee formed for examining Option 1 on the basis of number of increments drawn by the pensioner as recommended by 7th Pay Commission

As per 7th Pay Commission pension committee’s suggestions which has been approved by Cabinet, 7th pay Commission revision of pension will be made based on information available in Pension Payment Order issued to Pensioners at the time of retirement

After implemention of 7th Pay Commission report, Govt formed a Committee consisting of Revenue Secretary as Chairman of the Committee to examine whether Option 1 of 7th Pay Commission Pension revision is feasible and for the time being Central Government Pensioners have been fixed with revised pension as per Option 2 recommended 7th CPC, which pre-revised pension as on 31.12.2015 multiplied by a factor of 2.57.

7th Pay Commission Pension Fixation - Cabinet approves modified method suggested by commitee

Even as Central Government Pensioners and all Pensioners Association felt that Option 1 of 7th Pay Commission recommendations for revision pension will be more beneficial and eliminate disparity in pension as it involves number of increments drawn by the Pensioner in the pay from which he / she retired, it is understood that the Pension Committee submitted report to the Govt suggesting a via media.

This modifed 7th Pay Commission Pension fixation involves fixation of Pension on the basis of information available in the Pension Payment Order. Earlier the Pension Committee reported that Option 1 is practically not feasible in the absence of records relating to number of increments earned by the Pensioners at the time of retirement.

The exact details such as nature of information to be taken for revision of 7th CPC Pension will be clear only after Govt issues Orders in this regard.

The extract of Govt’s Press Release on Cabinet approval regarding 7th Pay Commission Pension fixation is as follows

Press Information Bureau

Government of India

Cabinet

03-May-2017 20:27 IST

Cabinet approves modifications in the 7th CPC recommendations on pay and pensionary benefits

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi approved important proposals relating to modifications in the 7th CPC (Central Pay Commission) recommendations on pay and pensionary benefits in the course of their implementation. Earlier, in June, 2016, the Cabinet had approved implementation of the recommendations with an additional financial outgo of Rs 84,933 crore for 2016-17 (including arrears for 2 months of 2015-16).

The benefit of the proposed modifications will be available with effect from 1st January, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the Central Government is likely to be Rs.1,76,071 crore. Some of the important decisions of the Cabinet are mentioned below:

1. Revision of pension of pre – 2016 pensioners and family pensioners

The Cabinet approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet. The modified formulation of pension revision approved by the Cabinet will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs.5031 crore for 2016-17 over and above the expenditure already incurred in revision of pension as per the second formulation based on fitment factor. It will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.

While approving the implementation of the 7th CPC recommendations on 29th June, 2016, the Cabinet had approved the changed method of pension revision recommended by the 7th CPC for pre-2016 pensioners, comprising of two alternative formulations, subject to the feasibility of the first formulation which was to be examined by the Committee.

In terms of the Cabinet decision, pensions of pre-2016 pensioners were revised as per the second formulation multiplying existing pension by a fitment factor of 2.57, though the pensioners were to be given the option of choosing the more beneficial of the two formulations as per the 7th CPC recommendations.

In order to provide the more beneficial option to the pensioners, Cabinet has accepted the recommendations of the Committee, which has suggested revision of pension based on information contained in the Pension Payment Order (PPO) issued to every pensioner. The revised procedure of fixation of notional pay is more scientific, rational and implementable in all the cases. The Committee reached its findings based on an analysis of hundreds of live pension cases. The modified formulation will be beneficial to more pensioners than the first formulation recommended by the 7th CPC, which was not found to be feasible to implement on account of non-availability of records in a large number of cases and was also found to be prone to several anomalies.
Source: Press Information Bureau