Unified Pension Scheme: The Centre last month notified the Unified Pension Scheme (UPS), a life-long guaranteed pension plan, for central government employees. However, the employees will have an option to choose between the National Pension System (NPS) and the UPS. Unlike NPS, the UPS gives guarantee of a fixed pension to central government employees which will be equivalent to 50% of their average monthly salary drawn over the last 12 months before superannuation.
Let’s take a look at how the minimum pension under the UPS might change once the 8th Pay Commission is implemented, which is expected to take effect from January 1, 2026. However, it’s important to note that there has been no official confirmation from the government regarding the 8th Pay Commission yet. The idea of its implementation is based on media reports, which suggest that the new pay commission’s recommendations could be in place from January 2026. This speculation aligns with past trends, where the government typically implements new pay commission recommendations every 10 years to revise salaries and pensions for central government employees and pensioners.
Before calculating the pension under the UPS, it’s important to first understand the changes in the salaries and pensions of central government employees once the 8th Pay Commission comes into effect. Salaries at different levels of government staff will be revised based on a specific fitment factor. For example, under the 7th Pay Commission, a fitment factor of 2.57 was applied for salary revisions.
Also read: 8th Pay Commission: Minimum salary of central govt employees to be raised to Rs 51480? Check calculation
Likely fitment factor under the 8th Pay Commission
As for the expected fitment factor under the 8th Pay Commission, various reports suggest that the government may settle on a factor of 1.92. However, according to a report by NDTV Profit, Shiv Gopal Mishra, Secretary (Staff Side) of the National Council of Joint Consultative Machinery (NC-JCM), is hopeful that the government will opt for a higher fitment factor of at least 2.86.
Minimum salary and pension expected under 8th Pay Commission
If this fitment factor of 2.86 is applied, the minimum basic salary of a government employee would rise to Rs 51,480, up from the current minimum salary of Rs 18,000. Likewise, pensions would increase to Rs 25,740, compared to the current pension of Rs 9,000,
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