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A very good news is coming for central government employees and pensioners. This time, the ongoing discussions regarding the 8th Pay Commission not only include the increase in fitment factor and dearness allowance (DA), but the government is also seriously considering implementing a new and very flexible pension system for the retirement benefits of the employees. This time the entire focus of the government is on providing strong financial security to the employees after retirement.

Now the minimum pension will be 67% instead of 50%? Know the big proposal of NC-JCM

The National Council of Joint Consultative Machinery (NC-JCM) has made a big and revolutionary proposal in its memorandum submitted to the 8th Pay Commission. The memorandum said that the full pension amount should be increased to enable a family with at least two members to live a respectable and better life after retirement. According to the proposal, this pension amount should be fixed at 67% of the employee’s last received salary or the average salary of the last 10 months (whichever is more beneficial for the employee). Let us tell you that under the current system, employees get only 50% of their last salary as pension.

Pension will increase every 5 years, know what is the new mathematics

In this memorandum of NC-JCM, a very special recommendation of the Parliamentary Standing Committee has also been mentioned. In this recommendation, it was proposed that in view of the increasing needs of the elderly after retirement, their pension should be increased by an additional 5% every five years. If this recommendation is approved, the future pension structure may look like this:

• At age 65: 70% of last pay drawn (LPD)
• At age 70: 75% of last pay drawn (LPD)
• At age 75: 80% of last pay drawn (LPD)
• At the age of 80: 85% of last pay drawn (LPD)
• At age 85: 90% of last pay drawn (LPD)
• At age 90: Full 100% of Last Pay Drawn (LPD)

Employees will get a chance to choose the pension of their choice

According to various media reports and employee representatives, the discussion about providing a new and flexible option regarding pension has progressed very rapidly in the last few weeks. Under this new proposal, the government can give a unique right to the employees, through which the employees will be able to choose any one pension system as per their need and convenience like Old Pension Scheme (OPS), National Pension System (NPS) or Unified Pension Scheme (UPS).

What is the mathematics of Old Pension Scheme (OPS)?

The Old Pension Scheme i.e. OPS has always been the most preferred scheme for government employees in India. It is a defined benefit pension scheme, in which the employee is guaranteed a fixed pension at the time of retirement based on his last salary and dearness allowance (DA). The most important thing is that the government itself bears its entire expense and the employees do not have to contribute anything from their salary during their job.

What is National Pension System (NPS)

National Pension System i.e. NPS works on a contribution based model. In this, employees have to deposit a certain part of their salary in the fund during their service and the government also contributes the same amount. The pension you receive after retirement depends entirely on how much money you have accumulated and what is the trend of market returns. However, its critics have always believed that retirement benefits should not depend on market fluctuations.

Why is Unified Pension Scheme (UPS) special?

Unified Pension Scheme i.e. UPS is considered to be a great balance between the Old Pension Scheme (OPS) and the National Pension System (NPS). The specialty of this scheme is that the contribution of money is similar to NPS, but at the same time, the employees are also given the benefit of an assured and guaranteed pension after retirement.

Know how many people of the country will be directly affected by this

The 8th Pay Commission is going to prove to be a very important milestone in the history of the country, because its implementation is expected to directly benefit more than 1.1 crore central government employees, pensioners and their families.

If we talk about the history of pay commissions in India, till now a total of seven pay commissions have been implemented in the country. The first Pay Commission in India was constituted in January 1946 and since then there has been a tradition of constituting a new Pay Commission at an interval of every 10 years. Taking this link forward, the 8th Pay Commission was constituted by the government on 3 November 2025, the recommendations of which employees across the country are eagerly waiting for.