8th CPC: Staff Bodies Push For Pension Increase, Seek To Choose Among OPS/NPS/UPS

According to officials, besides fitment factor and DA hike, this time the consultations are also focusing on the possibility of introducing a new pension structure for retired Central government employees, with retirement security becoming a key topic of discussion.

“For a decent and dignified life after retirement to support a minimum two-member family units’ full pension should be fixed at 67% of the Last Pay Drawn (LPD) or the Average of the last 10 months emoluments which is more beneficial instead of the present 50%,” the National Council of Joint Consultative Machinery (NC-JCM) is reported to have said in its memorandum submitted to the 8th CPC.

In the memorandum, it also favoured a recommendation by a Parliamentary Standing Committee, which proposed granting an additional 5% pension every five years after retirement, with the percentage slabs going up to 100% when a pensioner becomes 90 years old. The slab suggested includes 70% of last pay drawn (LPD) at 65 years, 75% at 75 years, and to reach 100% when a pensioner attains 90 years of age.

OPS/NPS/UPS

Sources also revealed that employee representatives have demanded discussions on greater pension flexibility, which has so far gained momentum in recent weeks. Under the proposal, employees’ associations have demanded that they may be allowed to select the pension system that best suits their needs, whether it is the Old Pension Scheme (OPS), the National Pension System (NPS) or the Unified Pension Scheme (UPS).

The OPS is a defined-benefit retirement plan for government employees in India. It guarantees a fixed pension linked to the last drawn salary and Dearness Allowance. The payouts are entirely funded by the government, meaning employees do not contribute to the fund during their working years.

The NPS follows a contribution-based model. Employees contribute a portion of their salary throughout their service, while the government makes a matching contribution. The pension amount eventually depends on the accumulated corpus and market-linked returns.

However, critics are of the view that retirement benefits should not depend on market movement, as UPS tries to bridge the gap by combining NPS-style contributions with assured pension benefits.

If this gets approved, employees may be allowed to pick among the three options – OPS, NPS, and UPS – depending on what suits their financial goals best.

While there is no official notification yet, employee representatives say conversations around “pension flexibility” have become increasingly active in recent weeks. If discussions continue positively, employee bodies believe some movement could happen within the next two to four months.

This is particularly significant as pension concerns have emerged as one of the biggest flashpoints during the 8th Pay Commission consultations, with many employees feeling that the issue is no longer just about earning more during service, but rather it is about surviving comfortably after retirement.

Family Unit Calculation

During recent discussions with the Pay Commission, the NC-JCM proposed expanding the family unit calculation to five units. Under the suggested formula, the employee and spouse as one unit, two children as 0.8 units each and dependent parents together as another 0,8 unit.

The employee side of the NC-JCM has argued that existing laws, including the Maintenance and Welfare of Parents and Senior Citizens Act and the Social Security Code, already recognise dependent parents as part of the family structure.

This change could significantly alter salary calculations under the 8th Pay Commission. “The minimum pay computed by the Staff Side National Council (JCM) is ₹69,000 for a five-unit family. Accordingly, the fitment formula for the existing employees and pensioners will be 3.833,” the memorandum read.

If accepted, the proposal could influence minimum basic pay, pensions, allowances, and overall compensation structures.