Pension Policy – Restoration of commutation, Family Pension and Notional Increment: Minutes of the 34th SCOVA meeting

Pension Policy – Restoration of commutation, Family Pension and Notional Increment: Minutes of the 34th SCOVA meeting held under the Chairmanship of Hon’ble MOS(PP) on 11.03.2025

[Department of Pension & Pensioners’ Welfare’s O.M. No. 4/14/2025-P&PW(D)/E-10522 dated 25.03.2025]

I. CGHS ISSUES

II. SPARSH PORTAL RELATED ISSUES

III. PENSION POLICY

(i) Issue: Restoration of commutation period from 15 years to 12 years:

The 5th Central Pay Commission (CPC) and various state governments recommended for reducing the recovery period for commuted pension from 15 years to 12 years to align with changing economic conditions. With the decrease in RBI interest rates, the current 15-year recovery period leads to excess recovery. Reducing the period to 12 years will ensure fairness and better matches the impact of lower interest rates on pension calculations.

Discussion/Decision on agenda item

It was informed by Department of Expenditure that this issue may be included in the Terms of Reference (TOR) of 8th Pay Commission.

In view of the above, the item was closed.

(ii) Issue: Laying down Standard Operating Procedure (SOP) for streamlining the process of starting of Family Pension:

Pensioners’ Association raised the issue of difficulties being faced by family pensioners for grant of family pension after death of pensioner/family pensioner. They, therefore, requested to issue a Standard Operating Procedure (SOP) for streamlining the process of starting of Family Pension.

Discussion/Decision on agenda item

It was informed by DoPPW that comments have been sought from banks, CPAO and other concerned Ministries/Departments on the question of a Standard Operating Procedure for grant of family pension.

DoPPW in consultation with other stakeholders will issue instructions in this regard.

(Action: DoPPW)

(iii) Issue: Notional Increment in pursuant to Judgement of Hon’ble SC:

The notional increment granted on 1st July/1st January for pension calculations, as per the Supreme Court/CAT decision, should be extended to all eligible employees, including those who retired on 30th June 2006 or 31st December 2006. This group of Pensioners, who had the requisite qualifying service, should not be excluded from receiving the benefit of the notional increment. A new Office Memorandum (OM) is requested to ensure the implementation of this provision for these retirees.

Discussion/Decision on agenda item

It was informed that necessary instructions have been issued by DOPT on grant of Notional Increment due from 1st Jan / Ist July to those who retired on 30th June or 31st December respectively after its finalisation by Hon’ble Supreme Court.

In view of the above, the item was closed.

IV. OTHER ISSUES