8th Pay Commission News: 8th CPC to reduce Commutation Period to 12 years instead of 15 years for Pensioners

8th Pay Commission News: 8th CPC to reduce Commutation Period to 12 years instead of 15 years for Pensioners

Good news for lakhs of retired Central Government employees! Finally, the 8th CPC (Central Pay Commission) will reduce the Commutation Period to 12 years instead of 15 years for Pensioners.

This issue was highlighted in the 34th SCOVA (Standing Committee of Voluntary Agencies) meeting held on March 11, 2025, under the chairmanship of the Hon’ble Minister of State for Personnel, Public Grievances, and Pensions (MOS(PP)) at Vigyan Bhawan, New Delhi. It was proposed to include this matter in the Terms of Reference (ToR) of the upcoming 8th Pay Commission.

Existing Rule for Central Government Employees on Commutation Period

Under the existing rules, retired central government employees who opt for commuted pension, a lump sum amount is given at the time of retirement in exchange for a reduced monthly pension. The full pension amount gets restored only after 15 years.

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However, employee unions demanded that this duration is too much. With interest rates decreasing recently, many people believe that this long recovery time takes too much money from pensioners’ monthly payments, making it hard for them to manage their finances.

Discussions at the SCOVA Meeting

During the SCOVA meeting on 11 March 2025, the Hon’ble Minister of State for Personnel, Public Grievances, and Pensions led the discussion for reducing the Commutation Period for pensioners.

Department of Expenditure officials exchanged their views on why this change is necessary for all. They argued that reducing the recovery period to 12 years would make things fair and provide immediate financial help to retirees who rely on their pensions for daily living expenses.

What’s next for government servants?

Experts and several state governments have already recommended a 12-year commutation period. The 5th Pay Commission has recommended the same.

Although no formal decision has been taken yet about the inclusion of this rule change in the 8th Pay Commission. If this new rule gets implemented, it will be a big relief for post retirement life of central government employees and pensioners. All the central government employees are looking at the Modi Government for the good news.

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