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A big relief could be on the horizon for central government retirees as the 8th Pay Commission may introduce a major reform related to commuted pensions. The government is considering reducing the restoration period of commuted pensions from 15 years to 12 years, which could allow pensioners to start receiving their full pension three years earlier.

This demand has been formally submitted by the National Council (JCM) in a memorandum to the Cabinet Secretary. According to reports, the government is seriously examining the request, and this issue is likely to be included in the Terms of Reference (ToR) of the upcoming 8th Pay Commission.

🔍 What is Commuted Pension?

When a government employee retires, they are given an option to receive a portion of their pension in lump sum, known as commutation of pension. However, once this lump sum is paid out, the monthly pension is reduced accordingly.

Example:

If a retiree is eligible for ₹20,000 monthly pension and chooses to commute 50%, they receive ₹10,000 as a lump sum. Their monthly pension then becomes only ₹10,000.

Currently, this reduced pension continues for 15 years, after which the full pension is restored.

What Are the Pensioners Demanding?

• Pensioners’ associations argue that the 15-year restoration period is too long, especially considering rising inflation.

• If this is reduced to 12 years, retirees will begin receiving their full pension three years earlier.

• This would significantly ease their financial burden during retirement.

What Did the National Council JCM Say?

The National Council JCM, which represents central government employees and retirees, submitted a memorandum to the Cabinet Secretary with multiple demands — the most crucial being the reduction of the commuted pension restoration period from 15 to 12 years.

The government is reportedly giving serious attention to this proposal, and it's expected to be part of the upcoming 8th Pay Commission discussions.

When Will the 8th Pay Commission Begin?

• The 7th Pay Commission is set to conclude its term on 31 December 2025.

• A new Pay Commission is typically implemented every 10 years.

• The 8th Pay Commission is expected to be effective from 1 January 2026.

• However, the government has not yet announced the commission members or its Terms of Reference, raising concerns of possible delays.

If Approved, How Will Pensioners Benefit?

• Retirees will receive full monthly pensions after 12 years instead of waiting 15 years.

• This will provide them with greater financial stability.

• It could boost the government’s image among retired government employees and senior citizens.

• Helps retirees better manage living expenses and healthcare costs in their later years.

Conclusion:

If the proposal to reduce the commuted pension restoration period to 12 years is accepted, it will be a major policy change benefiting millions of pensioners across India. The demand is gaining traction within the government, and it is highly likely to be considered in the 8th Pay Commission’s framework.

Pensioners are advised to stay updated as the official announcement regarding the commission and its terms is expected in the coming months.