Central employees have been advocating for the establishment of the 8th Pay Commission for several days. At last, the central government has agreed to their request. The 8th Pay Commission is set to be implemented starting in 2026, with the announcement of the chairman and two members expected soon. Once the 8th Pay Commission is in place, we will explore how it will affect the pensions of central employees and its implications for pension schemes like UPS.
On January 16, 2025, Union Minister Ashwini Vaishnaw shared this news, confirming that the government has opted to move forward with the 8th Pay Commission, with its recommendations taking effect from January 1, 2026. In the meantime, employees will continue to receive their pensions and salaries under the 7th Pay Commission.
What can we anticipate regarding pension increases?
The 8th Pay Commission is set to propose various recommendations for central employees. The employees’ union has been actively advocating for a 2.86 fitment factor. If this request is approved, the minimum pension for central employees could increase significantly from Rs 9,000 to Rs 25,740. Ritika Nayar mentioned that, at this point, we can only speculate about potential pension increases. She indicated that pensions might rise by 20 to 30 percent, but the actual increase will heavily rely on the country’s economic situation and budgetary constraints.
What modifications can we expect in UPS?
According to a report from Krishnendu Chatterjee, Vice President of TeamLease, there may be changes in central pension schemes such as UPS, NPS, and OPS. However, it would be premature to determine the extent of these changes. Additionally, an expert pointed out that central employees have been consistently requesting modifications to the pension scheme, with many advocating for a return to the old pension system. In this context, it’s likely that a decision regarding these pension schemes could be made during the 8th Pay Commission discussions.