8th Pay Commission: The central government led by Prime Minister Narendra Modi is likely to provide great relief to lakhs of government employees and pensioners in the 8th Pay Commission. The government can make an important decision regarding pension commutation. Employees Union has been demanding for a long time to reduce the period of restoration of commuted pension from 15 years to 12 years.
It is expected that the commission can also give its recommendations in this regard next year. The National Council, the organization representing the central employees, has informed the central government about its demand. It is expected that pension commutation can also get a place in the 8th Pay Commission, which will directly benefit lakhs of pensioners.
What is a commuted pension
Now the question arises what is a commuted pension? To understand it in simple language, it is a lump sum amount that is a part of the employee’s pension. At the time of retirement, employees get the option to take a part of their pension as a lump sum. This is called pension commutation. However, for the recovery of this lump sum amount, the government deducts some amount from the monthly pension.
If you take a lump sum under a commuted pension, the government deducts some amount from your monthly pension for 15 years. After this, it starts giving you a full pension. But now there is a demand to reduce this period from 15 years to 12 years. If it gets the green signal in the 8th Pay Commission, then the employees will start getting full pensions within 12 years. This will be a big relief for those who receive a lump sum in the early years of their retirement.
Pensioners’ demands and economic inequality
Employee organizations and pensioners say on this issue that the period of 15 years is too long. It is unfair from the economic point of view. They argue that due to the reduction in interest rates, there is inequality in the calculation of the government’s recovery, due to which lakhs of employees have to lose a large part of their pension. If it is made for 12 years instead of 15 years, then retired employees will benefit and they will be able to get the benefit of full pension as soon as possible. This will strengthen their economic security in old age.
If the government approves, how will the employees benefit
The National Council and employee organizations have submitted a letter to the Cabinet Secretary regarding pension commutation. In this, a demand has been made to reduce its period from 15 years to 12 years.
Full pension soon
If the government reduces the pension commutation period from 15 years to 12 years, then the retiring employees will start getting full pension in just 12 years. This will be a big financial facility for them.
Benefit to current and old pensioners
If this rule is implemented retrospectively, then-current and old pensioners can also get its benefit. This will be great news for lakhs of people who have already opted for commutation and are still in the recovery period of 15 years.
Financial security
This change will increase the monthly income of pensioners, which will help them cope with rising inflation and health-related expenses. It will improve their quality of life.