Budget 2025: Ahead of the Union Budget 2025, central government employees have again requested the Centre to look into their commuted pension restoration demand. At present, the government restores the commuted pension of a retiree after 15 years from the commutation date.
The Staff Side of the National Council Joint Consultative Machinery (NC JCM), representing millions of employees, has formally requested Finance Minister Nirmala Sitharaman to reduce the restoration period for the commuted portion from the current 15 years to 12 years.
Restoration demand for commuted pension: Key arguments
In a recent letter, Gopal Mishra, Secretary of NC JCM, argued that the government recovers the entire commuted pension within 11 years with interest. The letter also said that many state governments are restoring the commuted portion of the pension after 12 years. “There is no justification for recovering the 40% commuted Pension from the Pensioners for 15 years. Therefore, it is requested that the Government may kindly restore the commuted Pension after 12 years from the date of commutation.”
The JCM was set up to promote harmonious relations and cooperation between the government as employer and the general body of employees in matters of common concern.
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Historical context and need for change in pension commutation period
In the past, central government employee representatives and unions have also agreed with this proposal to reduce the timeframe for the restoration of the commuted portion of pension from 15 years to 12 years.
The Confederation of Central Government Employees and Workers, which represents about 7 lakh staff across various central departments, last wrote to Union Cabinet Secretary TV Somanathan, urging the government to review the pension commutation rules. The pension commutation rules were framed 38 years ago by amending Rule 10A of Central Civil Services (Commutation of Pension) Rules, 1981.
The Confederation in its letter said that in comparison to the parameters prevailing earlier in the year 1986, the current parameters have undergone a drastic change especially, the interest rate, life expectancy, mortality rate, death rate, actual values and risk factor which is at just 2%.
The letter also mentioned the 5th Pay Commission report that suggested bringing down the timeframe for restoration of commuted pension to 12 years from 15 years.
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