Central employees seek shorter commuted pension restoration period

Central government employees are advocating for a change in the pension system, specifically regarding commuted pensions. Currently, retirees must wait 15 years after receiving a lump sum payment before their full pension is restored. Employees are requesting that this period be shortened to 12 years. A commuted pension allows retirees to take a portion of their pension as a one-time payment, which is then deducted from their monthly pension. Up to 40% of a retiree’s pension can be converted this way. The National Council (Staff Side) Joint Consultative Machinery has formally asked the government to consider this reduction, highlighting that there is no valid reason to maintain the 15-year waiting period. Advocates for the change argue that the longer commutation period is unfair due to rising inflation and existing tax burdens on employees. They believe a 12-year restoration would provide much-needed financial relief for retiring employees. The Confederation of Central Government Employees and Workers has been vocal about this issue. They are asking the government to review the rules set way back in 1981. They referenced a Supreme Court ruling that supports revisiting the current policies, as many factors have changed over the past decades. Prime Minister Narendra Modi has approved the establishment of the 8th Pay Commission, which will begin working from January 2026. While there has been no official statement about changes to the commuted pension rules, employees remain hopeful that the new commission might address their request to shorten the waiting period.