Finally the Modi government has recently cleared the way for the formation of the 8th Pay Commission. This will lead to a change in the salaries of central employees, and retired employees will see a boost in their pensions as well. Union Minister Ashwini Vaishnav announced the creation of this commission on January 16, ahead of Budget 2025, stating that its recommendations would kick in on January 1, 2026. Right now, salaries and pensions are determined by the 7th Pay Commission, which has been in effect since January 1, 2016. With the announcement of the 8th Pay Commission, central employees are now looking forward to the Unified Pension Scheme (UPS).
The 8th Pay Commission is set to introduce significant updates to pensions under the National Pension System (NPS) and the Unified Pension Scheme (UPS), which is slated to launch on April 1, 2025. This new scheme will combine benefits from both the Old Pension Scheme (OPS) and NPS, offering perks like family pensions, a guaranteed pension amount, and a minimum pension for all central employees.
So, what’s the fitment factor?
It’s a multiplier used to adjust pay and pensions. It considers factors like inflation, employee needs, and the government’s financial ability. Reports suggest that the fitment factor could rise from 2.57 to 2.86, which would lead to higher pay and pensions.
What’s the pay matrix looking like for UPS in the 8th Pay Commission?
With the new fitment factor set at 2.86, central employees could see their minimum basic salary jump from Rs 18,000 to Rs 51,480. That’s a massive boost!
What about the minimum pension under UPS in the 8th Pay Commission?
Pensioners can also look forward to a nice increase. It might rise from the current Rs 9,000 to somewhere between Rs 17,280 and Rs 25,740, depending on the final fitment factor.