8th Pay Commission Pension: The National Council (Staff Side) Joint Consultative Machinery (NC-JCM) has officially moved a step forward by submitting a comprehensive memorandum to the 8th Central Pay Commission. Filed on April 14, 2026, this detailed document focuses on securing the financial future of retired central government employees against the backdrop of rising inflation and living costs.
The highlight of the memorandum is the firm stand taken against the contributory National Pension System (NPS) and the recently approved Unified Pension Scheme (UPS). The NC-JCM has demanded the complete withdrawal of these schemes, insisting on the immediate restoration of the defined Old Pension Scheme (OPS) for all employees.
Table of Contents
Reimagining Pension and Family Pension Structures
To ensure that retirees do not have to compromise on their lifestyle, the NC-JCM has proposed a major structural shift in pension calculations. Instead of the current 50%, the full pension should be fixed at 67 percent of the Last Pay Drawn (LPD). They suggest the calculation should be based on either the LPD or the average of the last 10 months’ emoluments, whichever is higher.
For family pensions, the proposal seeks to hike the rate from 30% to 50 percent of the last pay drawn. Furthermore, the duration for receiving an enhanced family pension is requested to be extended until the age of 70 years. Perhaps the most significant relief for retirees would be the demand to make all forms of Pension and Family Pension entirely exempt from Income Tax.
Age-Linked Pension Enhancements
Recognizing that medical expenses increase significantly with age, a staggered pension hike based on the retiree’s age has been proposed:
- 65 Years: 70% of Last Pay Drawn
- 70 Years: 75% of Last Pay Drawn
- 75 Years: 80% of Last Pay Drawn
- 80 Years: 85% of Last Pay Drawn
- 85 Years: 90% of Last Pay Drawn
- 90 Years: 100% of Last Pay Drawn
Major Shake-up in Gratuity (DCRG) Rules
The current method of calculating Death Cum Retirement Gratuity (DCRG) is viewed as disadvantageous to employees. The memorandum proposes calculating gratuity based on 25 effective working days in a month rather than 30.
A major highlight is the demand for a threefold increase in the gratuity ceiling—raising it from the current Rs 25 Lakhs to Rs 75 Lakhs. Additionally, the Staff Side wants the existing limit of 16.5 times the emoluments for those with over 33 years of service to be scrapped entirely.
Housing and Welfare Measures
The proposal isn’t limited to just pensions. To help retirees manage housing costs in both urban and rural areas, the introduction of House Rent Allowance (HRA) for pensioners has been demanded.
Other key requests include the immediate restoration of senior citizen concessions for railway travel and the extension of Leave Travel Concession (LTC) to all pensioners. For those in need of medical assistance, the introduction of a Care Taker Allowance has been suggested. Furthermore, the memorandum seeks the extension of One Rank One Pension (OROP) principles to all civil pensioners.
Breaking Down the 51-Page Memorandum
The document submitted on April 14, 2026, also seeks a drastic revision of the overall pay scale. The NC-JCM has demanded that the minimum basic pay be increased from Rs 18,000 to Rs 69,000. To achieve this, they have proposed a fitment factor of 3.833 and a doubled annual increment rate of 6 percent, up from the standard 3 percent.
If the 8th Pay Commission accepts these proposals, it will fundamentally change the financial security of central government retirees. The combination of a 67% pension floor, a Rs 75 Lakh gratuity limit, and tax exemptions will ensure that elderly citizens have the financial muscle to handle healthcare and daily expenses independently.
