Apart from the increase in fitment factor and DA, this time in the ongoing discussions regarding the 8th Pay Commission, special attention is also being given to the possibility of starting a new pension system for retired central government employees. In which security after retirement has become an important topic of discussion. The NC-JCM, in its memorandum to the 8th CPC, said that in order to live a good and respectable life after retirement, which can support a family of at least two members, the full pension should be fixed at ’67 per cent of last pay’ (LPD) or ‘average of last 10 months’ salary’ (whichever is more beneficial) instead of the current 50 per cent. It also mentions the recommendation of a Parliamentary Standing Committee, in which it was proposed to give 5 percent additional pension every five years after retirement. According to this, this arrangement should be something like this:
65 years: 70 percent of last salary (LPD)
70 years: 75 percent of LPD
75 years: 80 percent of LPD
80 years: 85 percent of LPD
85 years: 90 percent of LPD
90 years: 100 percent of LPD
Choosing between OPS, NPS or UPS
According to reports, employee representatives say that in recent weeks the ongoing discussions regarding more flexibility in pensions have also gained momentum. Under this proposal, employees can be given the freedom to choose the pension system that best suits their needs—be it OPS, NPS or UPS. The Old Pension Scheme (OPS) is a ‘defined-benefit’ retirement plan for government employees in India. It guarantees a fixed pension, which is linked to the employee’s last salary and dearness allowance (DA). The government bears the entire expense of this pension; Which means that employees do not have to make any contribution to this fund during their job.
what is nps
National Pension System (NPS) works on ‘contribution based’ model. In this, employees deposit a part of their salary in this fund during their job, and the government also contributes the same amount from its side. The final amount of pension depends on the total corpus and returns from the market. Critics say that retirement benefits should not depend on market fluctuations. The Unified Pension Scheme (UPS) tries to bridge this gap by combining NPS-style contributions with assured pension benefits.
Why is 8th Pay Commission important?
The 8th Pay Commission is important as it is expected to impact more than 1.1 crore beneficiaries, including central government employees and pensioners, as well as their families. Till now, seven pay commissions have been formed in India. The first Pay Commission was created in January 1946, and since then, a new Pay Commission has generally been created every 10 years. The 8th Pay Commission was formed on 3 November 2025.
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