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(Department of Pension and Pensioners’ Welfare)


New Delhi, the 4th August, 2016

No.38/37/2016-P&PW (A) – The Terms of Reference of the Seventh Central Pay Commission as contained in Ministry of Finance (Department of Expenditure) Resolution No.1/1/2013-E.1I1 (A) dated 28.2.2014 included the following:

“To examine the principles which should govern the structure of pension and other retirement benefits, including revision of pension in the case of employees who have retired prior to the date of effect of these recommendations, keeping in view that retirement benefits of all Central Government employees appointed on and after 01.01.2004 are covered by the New Pension Scheme (NPS).”

  1. The Commission, on 19th November, 2015, submitted its report to the Government on Terms of Reference as contained in aforementioned Resolution dated 28.02.2014. Government, after consideration, has decided to accept the recommendations of the Commission on pensionary benefits to the Central Government civil employees, including employees of the Union Territories and Members of All India Services subject to certain modifications, as specified hereinafter ..
  2. Detailed recommendations of the Commission relating to pensionary benefits and the decisions taken thereon by the Government are listed in the statement annexed to this Resolution.
  3. The revised provisions regarding pensionary benefits, which have been accepted as indicated in the Annexure, will be effective from 01.01.2016.

(Vandana Sharma)
Joint Secrtary to the Govt of India


Statement   showing   the   recommendations    of  the  Seventh   Central   Pay  Commission relating  to  principles  which  should  govern  the  structure  of  pension   and  other  terminal benefits  and the decisions  of the Government   thereon.

ItemNo. Recommendation Decision  of Government
1. The  Commission    notes  that  this  allowance   was enhanced  from  Rs.300/-  p.m. to Rs.500/- p.m. from 19.11.2014.    As such, further  enhancement   of this allowance  is not recommended.(Para 8.17.52  of the Report) To     be     examined      by     a Committee               comprising Finance        Secretary        and Secretary     (Expenditure)     as Chairman   and  Secretaries   of Home       Affairs,        Defence, Posts,      Health      &     Family Welfare,  Personnel  & Training and Chairman,  Railway Board as    Members.     Till    a    final decision   is  taken   based   on the   recommendations    of  the Committee,      Fixed     Medical Allowance    shall   be   paid   at existing  rates.

Constant   Attendance   Allowance. 

The allowance  may be increased  by a factor of 1.5 i.e. to Rs. 6750/-  per month.   The allowance  needs further   increase   by  25%  each  time   DA  rises  by 50% .

(Para 8.17.29  of the Report)

To     be     examined      by     a Committee               comprising Finance        Secretary        and Secretary     (Expenditure)     as Chairman   and  Secretaries   of Home       Affairs,        Defence, Posts,         Health    &    Family Welfare,  Personnel  & Training and Chairman,  Railway Board as    Members.     Till    a    final decision   is  taken   based   on the  recommendations    of  the Committee,                  Constant Attendant   Allowance  shall  be paid at existing  rates.

General  Provident  Fund 

Status quo may be maintained  in this respect.

(Para 9.4.4 of the Report)


Rates of Pension  & Family Pension 

The Commission   does  not recommend  any further increase  in the rate of Pension  and Family Pension from the existing  levels.

(Para 10.1.25 of the Report)



Quantum  of Minimum  Pension

The    recommendations     of   the    Commission     in relation   to  pay  of  a  personnel   will     lead  to  a significant    increase    in   the   minimum    from   the existing   Rs.7,000    per   month   to   Rs.18,000   per month.    This,  based  on  computation   of  pension, will   raise   minimum    pension   from   the   existing Rs.3500   to   Rs.9,000.      The   minimum    pension based on the recommendations   of the Commission will increase  by 2.57 times over the existing  level.

(Para 10.1.27 of the Report)


Rate of Additional   Pension  and  Family Pension   

to the older  pensioners.

The  Commission   is  of  the  view  that  the  existing rates  of  additional   pension   and  additional   family pension  are appropriate.

 (Para 10.1.30 of the Report)



Time Period for enhanced  family  pension

 The  Commission   notes  that  the  recommendation with  regard  to period  of eligibility  of the  enhanced family  pension  of  10 years  in case  of  death  of a serving    employee     was    made    based    on   the recommendations   of Vlth  CPC  Report.   No further change      is      being      recommended       by     the Commission.

(Para 10.1.33 of the Report)


Gratuity  ceiling  and its indexation. 

The Commission  recommends  enhancement  in the ceiling  of  gratuity  from  the  existing  Rs.10  lakh  to Rs.20   lakh  from   01.01.2016.      The   Commission further   recommends   the  ceiling   on  gratuity   may increase  by 25% whenever   DA  rises by 50%.


Rationalization   of death gratuity 

The  Commission,   after  examination   of the  matter, recommends   the  following   rates  for  payment   of death gratuity:

Length   of Service Rate       of       DeathGratuity
Less than One year 2  times   of  monthly emoluments
One   Year   or   more   but less than 5 years 6  times   of  monthly  emoluments
5 years  or more  but less 11 years 12 times  of  monthly emoluments
11  years   or     more   but   20  times 20 times  of  monthly emoluments
20 years or more Half month of emoluments for every completed six monthly period  of qualifying service subject to  a maximum of 33 times of emoluments.

Para 10.1.41  of the Report)


Commutation of Pensionand  restoration of Accepted commuted Pension 

The Commission  does not recommend  any change either  in the maximum  percentage  of commutation or in the period  of restoration.

(Para  10.1.43 of the Report)


Revision  of Pension  of pre  7m CPC retirees

The      Commission      recommends     the    following pension  formulation   for  civil  employees   including CAPF              personnel     who     have     retired     before

(i) All  the  Civilian  personnel   including  CAPF  who retired   prior   to   01.01.2016  (expected    date   of implementation         of       the        Seventh        CPC recommendations    ) shall  first  be fixed  in the  Pay Matrix  being   recommended    by  this  Commission, on  the  basis  of the  Pay  Band  and  Grade  Pay  at which    they    retired,    at   the    minimum    of   the corresponding    level  in  the  matrix.    This  amount shall be raised,  to arrive  at the  notional  pay of the retiree,  by  adding  the  number  of  increments  he / she had earned  in that level while in service,  at the rate  of  three   percent.     Fifty  percent  of  the  total amount  so arrived  at shall be the revised pension.

(ii) The  second  calculation   to be carried  out  is as follows.    The  pension,   as  had  been  fixed  at  the time of implementation  of the VI CPC recommendations,    shall  be  multiplied   by  2.57  to arrive at an alternate  value for the revised pension.

(iii)   Pensioners    may   be   given   the   option    of choosing   whichever    formulation    is   beneficial   to them.

It is recognized  that  the fixation  of pension  as per formulation   in (i) above  may take a little time since the   records   of  each   pensioner   will   have  to  be checked   to  ascertain   the  number   of  increments earned    in   the    retiring    level.       It   is   therefore recommended   that  in the first  instance  the revised pension  may be calculated  as at (ii) above and the same  may,  be paid as an interim  measure.   In the event  calculation   as  per  (i) above  yields  a higher amount       the       difference        may       be       paid subsequently.

(Para    10. 1.67 and    Para  10.1.68 of the Report) 

Both  the options recommended by  the 7thCentral   Pay  Commission   as regards  pension revision   be accepted  subject to feasibility of the  implementation. Revision  of pension  using the second     option based on fitment    factor  of  2.57  be implemented  immediately. The first  option  may be made feasible after examination   by the Committee       comprising Secretary        (Pension)   as Chairman        and  Member (Staff).        Railway  Board, Member   (Staff),  Department of Posts, Additional Secretary &  Financial   Adviser,  Ministry

of   Home   Affairs   and Controller     General    of Accounts  as Members


Ex-gratia  Lumpsum  Compensation 

The commission recommends a Common regime for payment of ex-gratia lump-sum compensation for  civil  and  defence  forces  personnel,  payable  to the next of Kin at the following  rates:

Circumstances  Existing Proposed
Death  occurring due  to accidents  in    course of performance  of duties 10 lakh 25 lakh
Death     in the course of performance the course of attributed  to acts  of violence by terrorists, anti social elements  etc. 10 lakh 25 lakh
Death occurring in border skirmisheds and action against militants, terrorists,extremists,sea pirates 15 lakh 35 lakh
Death occurring while on duty in the specified high altitude, unaccessible border posts, on account of natural disasters, extreme weather conditions 15 lakh 35 lakh
Death occurring during enemy action in war or such war like engagements , which are specifically notified by Ministry of Defence and death occurring during evacuation of Indian Nationals from a war-torn Zone in foreign country. 20 lakh 45 lakh

(para 10.2.77)


Authority: http://www.pensionersportal.gov.in/