The 8th Pay Commission has received a detailed set of recommendations from the All India Federation of Pensioners’ Associations (AIFPA), covering pension, salary, tax relief, medical benefits and retirement rules.
During its meeting with officials of the 8th Central Pay Commission in Chennai on Tuesday, AIFPA proposed that full pension should be fixed at 67% of the last pay drawn (LPD). It also recommended a minimum basic salary of ₹69,000, based on a 3.833 fitment factor, along with One Rank One Pension (OROP) for all central government employees.
Among its other demands, the pensioners’ body has sought a reduction in the pension commutation restoration period from 15 years to 11 years, changes to qualifying service requirements for defence pensioners, tax exemption on pension and family pension, and revision of pensions for BSNL retirees.
Here are the 10 major recommendations submitted by AIFPA to the 8th Pay Commission.
1. Full Pension Should Be 67% of Last Pay Drawn
AIFPA has proposed a substantial increase in the proportion of last pay that is used to determine pension.
The organisation believes that pension should be fixed at 67% of the last pay drawn, which it says would help retired employees maintain a dignified standard of living, particularly for households consisting of at least two family members.
It has also recommended increasing the family pension from the existing 30% to 50% of the last pay drawn.
2. Additional Pension From the Age of 65
The pensioners’ organisation has also proposed changes to the system of additional pension available to senior citizens.
Under the existing arrangement, pension increases by 20% after a pensioner reaches 80 years of age, followed by a further 10% increase at five-year intervals. By the age of 100, the additional pension can reach 100%.
AIFPA has referred to the 110th report of the Parliamentary Standing Committee on Pensioners’ Grievances, issued in December 2021, which recommended introducing an additional 5% pension increase from the age of 65, followed by another 5% increase every five years.
Under AIFPA’s proposal, the 100% additional pension milestone would be brought forward from 100 years to 90 years.
Proposed Additional Pension Structure
| Age | Proposed Pension as % of Last Pay Drawn |
|---|---|
| 60 years | 67% |
| 65 years | 70% |
| 70 years | 75% |
| 75 years | 80% |
| 80 years | 85% |
| 85 years | 90% |
| 90 years | 100% |
3. ₹69,000 Minimum Pay and 3.83 Fitment Factor
AIFPA has proposed a minimum basic salary of ₹69,000 under the 8th Pay Commission.
The organisation has based its demand on the rising cost of household expenses, healthcare, education, family functions and other essential requirements.
Along with the proposed minimum pay, AIFPA has demanded a 3.83 fitment factor, five family units for pay calculations and an annual increment of 6%.
The fitment factor will be particularly important because it is used to determine the revised basic pay under a new pay structure.
4. Pension Commutation Should Be Restored After 11 Years
Another major recommendation concerns the restoration of commuted pension.
At retirement, central government pensioners can choose to commute up to 40% of their basic pension and receive the amount as a lump sum. The commuted portion is subsequently deducted from their monthly pension.
At present, the deducted amount is restored after 15 years.
AIFPA has called for this period to be reduced to 11 years. According to the organisation, with a commutation factor of 8.194, the full commuted value is effectively recovered within about 10 years.
5. One Rank One Pension for All Central Government Employees
AIFPA has also called for One Rank One Pension (OROP) to be extended to all central government employees.
The organisation has pointed to the implementation of OROP for ex-servicemen and the Supreme Court’s approval of the principle for judicial pensioners.
According to AIFPA, differences where a junior pensioner receives a higher pension than a senior pensioner in the same grade and with the same qualifying service should be eliminated.
The organisation wants the 8th Pay Commission to recommend a pension structure that addresses such anomalies.
6. Defence Pensioners Should Have Lower Qualifying Service Requirements
AIFPA has sought parity between civil and defence pension rules regarding the minimum qualifying service needed to receive a pension.
Currently, central government civil employees can become eligible for pension after 10 years of qualifying service, while defence personnel generally face a 15-year requirement.
The pensioners’ body has recommended that the qualifying service requirement for defence pensioners be brought down to the same level as that applicable to central civil pensioners.
7. Tax Exemption on Pension and Family Pension
Tax relief for senior citizens is another major demand submitted to the 8th CPC.
AIFPA has argued that pension is often the primary source of income for retired people who no longer receive a regular salary. With increasing life expectancy, healthcare costs and the need for physical assistance in old age, the organisation believes pension and family pension should be exempt from income tax.
It has also sought a specific income-tax exemption for disability pension and compassionate allowance received by ex-servicemen.
8. Fixed Medical Allowance Should Rise to ₹5,000
AIFPA has proposed an increase in the Fixed Medical Allowance (FMA) available to eligible central government pensioners.
The organisation noted that a parliamentary panel had recommended raising the allowance to ₹3,000 per month in 2022, but the recommendation has not yet been implemented.
AIFPA wants the 8th Pay Commission to raise the FMA further to ₹5,000 per month.
It has also suggested linking the allowance to the Consumer Price Index (CPI). Under its proposal, the FMA should automatically increase whenever Dearness Relief (DR) is revised upwards.
DR is provided to central government pensioners to help offset the impact of inflation.
9. Pension Revision for BSNL Retirees
Revision of pensions for BSNL pensioners is another issue raised by AIFPA.
According to the pensioners’ body, pensions of BSNL retirees have not been revised since 2017.
AIFPA has pointed to favourable legal developments and said BSNL pensioners are eligible for government pension benefits under the CCS Pension Rules.
The organisation has therefore requested that BSNL pensioners’ pensions be revised retrospectively from 2017, in line with the recommendations of the 7th Pay Commission.
10. Implement Arbitration Awards Without Delays
AIFPA has also raised concerns about delays in implementing arbitration awards.
The organisation said that prolonged delays in enforcing such awards can result in financial losses for employees.
It has urged the 8th Pay Commission to recommend measures that can strengthen the arbitration mechanism and ensure timely implementation of awards, helping maintain better industrial relations.
What AIFPA’s 8th Pay Commission Demands Mean for Pensioners
The recommendations submitted by AIFPA cover several areas that directly affect the financial security of central government employees and pensioners.
The proposed 67% pension based on last pay drawn, ₹69,000 minimum basic pay, 3.83 fitment factor, earlier restoration of commuted pension, higher medical allowance and tax exemptions could significantly improve retirement benefits if accepted.
However, these are recommendations made by the pensioners’ association and are not final decisions of the 8th Pay Commission. The commission will consider submissions from different employee and pensioner organisations before preparing its recommendations.
The final pension formula, fitment factor, minimum pay, allowances and other benefits will depend on the commission’s recommendations and subsequent approval by the Central government.