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Home » 7th Pay Commission Pension Fixation Examples

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7th Pay Commission Pension Fixation Examples

7th Central Pay Commission Pension Fixation Examples

7th Pay Commission Pension Fixation Examples

There is no problem to calculate pension and other retirement benefits for 7th CPC pensioners i.e., retired after (1.1.2016) implementation of 7th CPC. Pensioners retired in the 6th CPC regime are also easy to calculate basic pension and family pension.

Fixation of Pension as per 7th CPC

Calculation of revision of pension for 4th CPC and 5th CPC pensioners is a little bit complicated. Their basic pension is already calculated and revised as per the recommendations of earlier pay commissions. So, we have to need notional pay.

What is notional pay in pension?

Notional pay is nothing but, it is ‘Proposed Pay’. If we could not find the exact Pay of any pensioner, find the notional pay and calculate the current pension. Notional Pay Fixation method adopted only for 4th and 5th CPC pensioners.

7th Pay Commission Pension Calculation

In the implementation of the Government’s decision on the recommendation of the Seventh Central Pay Commission (7th CPC), orders have been issued vide Department of Pension & Pensioners’ Welfare O.M. No. 38/37/16-P&PW(A) (i) dated 04.08.2016 for revision of provisions regulating pension/gratuity/ commutation of pension/family pension/disability pension/ex-gratia lump-sum compensation, etc. in respect of the employees retiring on or after 01.01.2016.

How to Calculate Pension as per 7th Pay Commission

For revision of pension of pre-2016 civil pensioners, the 7th CPC recommended the following two formulations:

(i) Notional Pay of employees who retired prior to 01.01.2016 may be fixed in the Pay Matrix on the basis of the Pay Band and Grade Pay at which they retired, by adding the number of increments he/ she had earned in that level while in service, to the minimum of the corresponding level in the matrix. Fifty percent of the total amount so arrived at shall be the revised pension.

(ii) The pension, as had been fixed at the time of implementation of the 6th CPC recommendations, may be multiplied by 2.57 to arrive at an alternate value for the revised pension.

7th CPC recommended that the pensioners may be given the option of choosing the formulation which is more beneficial to them. Orders were issued for revision of pension as per Formulation (ii) above vide Department of Pension & Pensioners’ Welfare O.M. No. 38/37/16-P&PW(A) (ii) dated 04.08.2016 and the pension disbursing authorities were advised to make payment of the revised pension accordingly without waiting for the revised pension payment authority.

A committee under the chairmanship of the Secretary, Department of Pension & Pensioners’ Welfare was constituted to examine the feasibility of Formulation (i).

The Committee observed that Formulation (i) as recommended by the 7th CPC might be difficult to implement in a large number of cases and this method may also cause anomalies.

In the implementation of the recommendations of the aforesaid Committee, orders have been issued vide Department of Pension & Pensioners’ Welfare O.M. No. 38/37/16-P&PW(A) dated 12.05.2017.

It has been provided that the revised pension/family pension w.e.f. 01.01.2016 in respect of all Central civil pensioners/family pensioners may be revised by notionally fixing their pay in the pay matrix recommended by the 7th CPC in the level corresponding to the pay in the pay scale/pay band and grade pay at which they retired/died by notional pay fixation under each intervening Pay Commission based on the Formula for revision of pay.

50% of the notional pay as on 01.01.2016 shall be the revised pension and 30% of this notional pay shall be the revised family pension w.e.f. 1.1.2016.

Higher of the two Formulations i.e. the pension/family pension already revised in accordance with this Department’s OM dated 04.08.2016 or the revised pension/family pension as worked out by notional pay fixation method, shall be the revised pension/family pension w.e.f. 01.01.2016.

There were around 55.51 lakh pensioners/family pensioners (including defense pensioners/family pensioners) as on 31.03.2016.

All Pension Sanctioning Authorities have been advised to accord top priority to the work of revision of pension and issue revised Pension Payment Authority in implementation of the above orders expeditiously.

There is no proposal for the creation of any other organization for pension-related issues.

Description 1st case
1. Date of Retirement 31.12.1984
2. Scale of pay (or Pay Band & G.P.) at the time of retirement (OR) Notional pay scale as on 1.1.1986 for those retired before 1.1.1986 975-1660 (4thCPC Scale)
3. Pay on retirement (OR) Notional pay as on 1.1.1986 for those Retired before 1.1.1986 1210
4. Pension as on 01.01.2016 before revision 4191
5. Family pension as on 01.01.2016 3500
6. Family pension at an enhanced rate as on 01.01.2016 before revision (if applicable) NA
7. Revised pension by multiplying pre-revised pension by 2.57 10771
8. Revised family pension by multiplying pre-revised family pension by 2.57 9000
9. Revised family pension at the enhanced rate by multiplying pre-revised enhanced family pension by 2.57 NA
10. Pay fixed on a notional basis on 1.1.1996 3710 (3200-4900)
11. Pay fixed on notional basis on 1.1.2006 8910 (PB-1, GP 2000)
12. Pay fixed on a national basis on 1.1.2016 23100 (Level -3)
13.Revised pension w.e.f. 1.1.2016 as per the first formulation 11550
14. Revised family pension w.e.f. 1.1.2016 as per the first formulation 9000
15. Revised family pension at enhanced rate w.e.f. 1.1.2016 as per the first formulation NA
16. Revised pension payable (Higher of S.No.7and 13) 11550
17. Revised family pension payable (Higher of S.No. 8 and 14) 9000
18. Revised family pension at the enhanced rate payable (Higher of S.No. 9 and 15) NA
Description 2nd case
1. Date of Retirement 31.01.1989
2. Scale of pay (or Pay Band & G.P.) at the time of retirement (OR) Notional pay scale as on 1.1.1986 for those retired before 1.1.1986 3000-4500(4thCPC Scale)
3. Pay on retirement (OR) Notional pay as on 1.1.1986 for those Retired before 1.1.1986 4000
4. Pension as on 01.01.2016 before revision 12600
5. Family pension as on 01.01.2016 7560
6. Family pension at an enhanced rate as on 01.01.2016 before revision (if applicable) N.A
7. Revised pension by multiplying pre-revised pension by 2.57 32382
8. Revised family pension by multiplying pre-revised family pension by 2.57 19430
9. Revised family pension at the enhanced rate by multiplying pre-revised enhanced family pension by 2.57 NA
10. Pay fixed on a notional basis on 1.1.1996 11300(10000-15200)
11. Pay fixed on a notional basis on 1.1.2006 27620 (PB-3, GP 6600)
12. Pay fixed on a notional basis on 1.1.2016 71800 (Level -11)
13.Revised pension w.e.f. 1.1.2016 as per the first formulation 35900
14. Revised family pension w.e.f. 1.1.2016 as per the first formulation 21540
15. Revised family pension at enhanced rate w.e.f. 1.1.2016 as per the first formulation N.A.
16. Revised pension payable (Higher of S.No.7and 13) 35900
17. Revised family pension payable (Higher of S.No. 8 and 14) 21540
18. Revised family pension at the enhanced rate payable (Higher of S.No. 9 and 15) N.A.
Description 3rd  case
1. Date of Retirement 30.06.1999
2. Scale of pay (or Pay Band & G.P.) at the time of retirement (OR) Notional pay scale as on 1.1.1986 for those retired before 1.1.1986 4000-6000 (5thCPC Scale)
3. Pay on retirement (OR) Notional pay as on 1.1.1986 for those Retired before 1.1.1986 4800
4. Pension as on 01.01.2016 before revision 5424
5. Family pension as on 01.01.2016 3500
6. Family pension at an enhanced rate as on 01.01.2016 before revision (if applicable) NA
7. Revised pension by multiplying pre-revised pension by 2.57 13940
8. Revised family pension by multiplying pre-revised family pension by 2.57 9000
9. Revised family pension at the enhanced rate by multiplying pre-revised enhanced family pension by 2.57 N.A
10. Pay fixed on notional basis on 1.1.1996 N.A
11. Pay fixed on a notional basis on 1.1.2006 11330 (PB-1, GP-2400)
12. Pay fixed on notional basis on 1.1.2016 29600 (Level-4)
13.Revised pension w.e.f. 1.1.2016 as per the first formulation 14800
14. Revised family pension w.e.f. 1.1.2016 as per the first formulation 9000
15. Revised family pension at enhanced rate w.e.f. 1.1.2016 as per the first formulation N.A
16. Revised pension payable (Higher of S.No.7and 13) 14800
17. Revised family pension payable (Higher of S.No. 8 and 14) 9000
18. Revised family pension at the enhanced rate payable (Higher of S.No. 9 and 15) N.A
1. Date of Retirement 31.05.2015
2. Scale of pay (or Pay Band & G.P.) at the time of retirement (OR) Notional pay scale as on 1.1.1986 for those retired before 1.1.1986 67000-79000 (6thCPC Scale)
3. Pay on retirement (OR) Notional pay as of 1.1.1986 for those Retired before 1.1.1986 79000
4. Pension as on 01.01.2016 before revision 39500
5. Family pension as on 01.01.2016 23700
6. Family pension at an enhanced rate as on 01.01.2016 before revision (if applicable) 39500
7. Revised pension by multiplying pre-revised pension by 2.57 101515
8. Revised family pension by multiplying pre-revised family pension by 2.57 60909
9. Revised family pension at the enhanced rate by multiplying pre-revised enhanced family pension by 2.57 101515
10. Pay fixed on a notional basis on 1.1.1996 NA
11. Pay fixed on a notional basis on 1.1.2006 NA
12. Pay fixed on a notional basis on 1.1.2016 205100 (Level- 15)
13.Revised pension w.e.f. 1.1.2016 as per the first formulation 102550
14. Revised family pension w.e.f. 1.1.2016 as per the first formulation 61530
15. Revised family pension at enhanced rate w.e.f. 1.1.2016 as per the first formulation 102550
16. Revised pension payable (Higher of S.No.7 and 13) 102550
17. Revised family pension payable (Higher of S.No. 8 and 14) 61530
18. Revised family pension at the enhanced rate payable (Higher of S.No. 9 and 15) 102550

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What is what?

What is Pay Matrix?
Pay Matrix is a number table designed by 7th Central Pay Commission and recommended for all group of CG Employees and Officers with effect from 1.1.2016 – click to know more

What is Pay Matrix Level?
The nomenclature being used in the new pay matrix assigns levels in place of erstwhile grade pay – click to know more

What is Fitment Factor or Fitment Benefit?
Fitment Factor is a common multiplication number, which is used for arriving a common result – click to know more

What is Terms of Reference?
A key report with instructions given to the Committee or Group – click to know more

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