8th Pay Commission: Staff Side proposes restoration of commutation of pension after 11 years

The NC-JCM Staff Side has proposed the restoration of commuted pension of central government pensioners after 11 years, instead of 15 years, under the 8th Central Pay Commission (CPC). The Staff Side shared this proposal along with their reasoning in a memorandum to the 8th CPC.

The Staff Side argues that the rules regarding the restoration of commutation of pension were framed 39 years ago, and a lot has changed since then. Hence, restoration should now be allowed after 11 years.

"In accordance with Rule 10 A of the CCS (Commutation of Pension) Rules 1981 Restoration of Commutation Pension is after 15 years. These Rules were framed nearly 39 years ago, based on the Financial & Actuarial Parameters prevailing at that time. However, lot of changes have taken place in these 39 years which includes interest rates, life expectancy, mortality rates, death rates, and actuarial risk factors which necessitate fresh values of the restoration period.," the staff side said.

The staff side also shared the following calculation, showing that the entire commuted value is recovered in about 10 years. And any recovery beyond this period lead to excess recovery. Hence, the commuted pension should be restored after 11 years.

Illustratively for a pensioner aged 61 years (Next Birthday):

"Thus, the entire commuted value is recovered within about 10 years and recovery beyond this period results in excess recovery from pensioners. Therefore, restoration of commuted pension after 11 years would be reasonable, " the staff side said.

What other bodies have said

The staff side highlighted the fact that many experts' bodies in the past have recommended an early restoration of commuted pension.

For instance,

• Many state governments like Kerala and Gujarat have reduced the period varying from 12 to 13 years.

• 5th CPC recommend for 12 years restoration.

• The 2nd National Judicial Commission recommended for 12 Years restoration

"Therefore, we propose to the 8th CPC to recommend for restoration of Pension after 11 years or at the age of 71 years whichever is earlier," the staff side said.

The 8th Pay Commission is currently meeting various stakeholders. It will submit its report in around 18 months from its formation.