8th Pay Commission: The 8th Central Pay Commission has reached a pivotal stage for the approximately 6.5 million pensioners among central government and defense personnel. Led by Justice (Retired) Ranjana Prakash Desai, the commission is currently soliciting input through consultation meetings with various states and employee-pensioner unions nationwide.
There is significant interest from unions concerning the revision of pensions for employees who retired prior to January 1, 2026. Numerous organizations, including NC-JCM, AIDEF, and BPSAPA, have presented several key pension-related requests to the Commission. Let us examine the seven most critical demands submitted to the 8th Pay Commission by millions of pensioners throughout the country.
1. Significant increase in minimum pension (67% of last pay)
The foremost demand from pensioner organizations is for an increase in the minimum pension amount. Unions are advocating for the minimum pension to be set at no less than 67 percent of an employee’s last pay drawn (LPD), or the average salary over the last 10 months.
2. Increment in pension with advancing age
Considering the rising medical expenses associated with aging, pensioners have requested an additional pension increment in a phased manner starting at the age of 65 years:
65 years of age: 70% of Basic Pension (of LPD)
70 years of age: 75% of basic pension
75 years of age: 80% of basic pension
80 years of age: 85% of basic pension
85 years of age: 90% of basic pension
90 years and above: 100% of basic pension (full pay)
3. Reduction of commutation restoration period from 15 to 10-12 years
According to current regulations, if an employee opts for a lump sum pension upon retirement, it takes 15 years for their full pension to be reinstated. Unions contend that the 15-year stipulation is outdated by decades. NC-JCM and AIDEF have firmly requested a reduction to 11 years, AINPSEF to 10 years, and IRTSA to 12 years.
4. Fitment factor and pension revision for individuals retiring before January 1, 2026
There have been requests for modifications to the fitment factor utilized in pension calculations. Additionally, pensioners’ organizations, including REWA, have urged that the Commission’s Terms of Reference (ToR) explicitly encompass the revision of pensions and family pensions for those who retired prior to January 1, 2026.
5. Consolidation and revision of Dearness Relief (DR)
In order to mitigate the effects of ongoing inflation, it is advisable to reassess the current framework of ‘Dearness Relief’ (DR) and enhance its integration with pension benefits.
6. Increase in the gratuity limit and expansion of family pension scope
Pensioners have called for an increase in the maximum gratuity limit upon retirement and for an expansion of the family pension scope, ensuring that the dependents of the employee are not subjected to financial difficulties following his or her demise.
7. Choice of pension plan (OPS vs UPS vs NPS)
Employees and retiree associations have also requested that pensioners be granted the option to select between the Old Pension Scheme (OPS), Unified Pension Scheme (UPS), or the National Pension System (NPS) based on their individual requirements.
When will the recommendations be put into effect?
The final report of the 8th Pay Commission is anticipated to be submitted by May 2027, adhering to the 18-month timeline established from the Commission’s inception in November 2025. The new recommendations will be officially enacted only after receiving approval from the Union Cabinet.