Cabinet approves Revised Procedure for Pension Fixation for pre 2016 Pensioners

Cabinet approves Revised Procedure for Pension Fixation 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.


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15 thoughts on “Cabinet approves Revised Procedure for Pension Fixation for pre 2016 Pensioners”

  1. sivasankaran p

    old retired sepoys those who not received any kind of promotions even they qualified and 15 to 22 years service look towards them, kindly consider them t s naik or havildar as their service

  2. K. S. Manhas

    Please notify the Pension table of Defense Personnel as approved by Cabinet on 03.05.2017.

  3. RBKV Ramanan, Advocate

    The fact of the matter is that all pensioners are in possession of Pension Payment Order (PPO) issued to every pensioner. The decision on the modified formulation may not be all that attractive as claimed to be. However, if it is considered ‘more beneficial’ to more pensioners than the first option recommended by the 7th CPC, let it be an additional option known as modified option. First option recommended by the 7th CPC should not be scarified at the behest of the modified option to leave the pensioners in lurch who possess relevant records, information etc., which is the most advantageous in their cases if they give option under first option. Therefore the claim that the first option was not found to be feasible to implement it on account of non-availability of records would pale into insignificance. Where in some cases, the First Option, if implemented would lead to anomalies, way out could be worked out to redress the grievance. Which GoI order concerning with monetary benefits is not prone to anomaly? Let there be three options viz., First Option, Second Option and Modified Option, let the pensioners wisdom prevail to choose which would be more advantageous to them. It is not good to belittle the First Option to nullity, after all the Govt. earlier has decided to accept it in principle. The pensioners who stand to benefit by First Option should not be deprived of their benefits due to modified formula of the Govt. which requires reconsideration. All Associations and Federations should take note of this. Good Luck.


    dear venkat (query of may 17th)
    it thse last basic pay drawn and not average emoluments to be taken for arriving at notional pay.
    in your case notional pay is to be calculaed
    as on 1-1-1996 from the 4thcpc last basic payt
    as on 1-1-2006 from the notional pay of 1-1-96
    as on 1-1-2016 from the notional pay of 1-1-2006
    and then multiplication by 2.57
    fixing at appropriate leve and index cell to arrive at option 1 basic pay
    50% of basic pay is penion as per op-1
    30% of basic pay so arrived at is family pension normal asper op-1

  5. Shanmuganathan

    This is a wicked conspiracy by the finance minister, rotten IAS officers and the corrupt babus

  6. In 4th CPC scale my Last pay drawn Is Rs.1720. But last 10months salary average is Rs. 1690. Which must be taken for calculation of notional fixation of pension? Please clarify.

  7. Unless the manner in which notional pay would be stepped up for parity purpose, as allowed by 7CPC, nothing can be commented upon. It is not clear why govt: is concealing it. In fact , the whole mischief is hidden in denying this particular information. Again it is more than ten days , but the circular is not coming out.

  8. Option 1 recommended by 7 CPC was more scientific as it would have provided relief to the pensioners who would have served in the same time scale for longer periods without being promoted to higher grade due to the nature of service conditions.Normally
    A is not benefitted as they are elevated to the higher grade on due dates.
    The decision to reject Option 1 is unfortunate and the ground for rejection is totally unscientific.

  9. P d amarnath

    This is the first time that the pensioners are just taken for a ride. The recommendations of the pay commission have been thrown into the dust bin and a bureaucrat’s report got implemented. There’s more publicity on what is given to pensioners on gross levels, mentioning thousands of friends, just misleading. In reality, many pensioners get less in new formulation​. A government​ totally indifferent to truth.

  10. Ravindran C V

    Revised procedure for pension fixation need to be published at the earliest. Also not much details or cases in respect of retired Hony. Commissioned officers are seen any where.

  11. P.N.Vaidyanathan

    the government is bent upon confusing the pensioners even now
    What is the feasibility mantra they are adopting ? every pensioner receives through a bank or treasury. they are
    paying or disbursing the pension as
    per the norms found in the PPO.
    Please leave it to the disbursing banks or treasuries to implement the same without any delay

  12. Satyanarayana

    Finally, the Option I recommended by 7th CPC has been denied and some pittance or crumbs are being thrown at pre-2016 pensioners. Once again it is proved that this govt is against employees ,labour and pensioners. No tangible benefit will accrue under this so called via-media formula now approved by Cabinet under the behest of Pension Secretary.

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