8th Pay Commission: Big Updates For Govt Employees; How Pensions Will Rise Under 8CPC?

8th Pay Commission: The upcoming 8th Pay Commission is expected to benefit about 50 lakh central government and 65 lakh pensioners. The 8CPC which is going to increase the pay matrix of government employees, will also drive the individual and family pensions higher.

At the latest development, 8CPC which will replace 7CPC, is expected to be implemented in 2026. However, there is mixed opinion related to the fitment factor for 8CPC. Many government officials have predicted the fitment factor to either be 1.92, 2.08 or 2.86.

8th Pay Commission Fitment Factor:

If the fitment factor of 2.86 is announced by the government, then the basic pay of level 1 government employees will rise by a whopping 186%.

However, the 2.86 fitment factor is seen to be a high number by many experts. In media, some of the experts have suggested rather 2.08 fitment factor, or 1.92.

In the case of a fitment factor of 1.92, the minimum pay of level 1 employees will rise by 92%, while the surge would be a whopping 108% under a fitment factor of 2.08.

But what about family pensions or individual pensions, how much hike will they see owing to the predicted fitment factors? Let's find out!

Level 1 Pensioners:

Under 7CPC, the minimum pension is Rs 9,000 per month for both family and individual pension.

On fitment factors 1.92 under 8CPC, family pension would rise by 92%, while in case of 2.08 and 2.86, the pensions would surge by 108% and 186% as well.

8CPC Fitment Factor Prediction 1.92: Rs 17,280 per month,

8CPC Fitment Factor Prediction 2.08: Rs 18,720 per month

8CPC Fitment Factor Prediction 2.86: Rs 25,740 per month.

7CPC Pensions:

The 7CPC fitment factor is 2.57. As per the recommendation dated August 2016, the amount of pension is minimum Rs 9,000 and the maximum pension is 50% of the highest pay in the government. Currently, the highest pay in the government is Rs 2.50 lakh with effect from January 1, 2016, which makes the highest pension to be around Rs 1,25,000 per month.

Under 7CPC, benefits of additional pension for both old individual or family pensioners has continued as well. Meaning, with the surge in age, the pension will also rise. For instance:

- From 8 years to less than 85 years: 20% of the revised basis pension/family pension will be given.

- From 85 years to less than 90 years: 30% of revised basic pension will be allotted.

- From 90 years to less than 90 years: 40% of the revised basic pension is offered.

- From 95 years to less than 100 years: 50% of the revised basic pension is given.

- For retirees attaining the age of 100 years or more: 100% of revised basic pension is allotted.

For example: if a pensioner is more than 80 years of age, and his pension is amounted to Rs 10,000 per month. Then his pension will be shown as basic pension = Rs 10,000 and additional pension = Rs 2,000 per month.

If the same person attained 85 years of age, then basic pension will be Rs 10,000 and additional pension will be Rs 3,000 per month.

What are pensions?

Pensions are retirement benefits to government employees on their permanent absorption in public sector undertakings or any other government bodies. These pensioners will draw pension separately from government. The eligibility period for pension is minimum 10 years.

Family pension comes into picture after the demise of the government employee. For instance, Mr X, a government employee, died after 10 years of service. Then his wife or children would become eligible for family pension for his services at the government.

What will be the retirement benefits for pensioners under 8CPC will be keenly watched!

The first Pay Commission in India was introduced in January 1946, a year before Independence, however, its main report was submitted to the interim government in May 1947. Maintaining a 10-year gap, the second Pay Commission followed in August 1957, and so on.