Cabinet okays percentage-based pension regime

The Union Cabinet on Wednesday okayed the retention of percentagebased regime of disability pension implemented after the Sixth central Pay Commission (CPC), which the Seventh CPC had recommended to be replaced by a slab-based system.

The defence ministry had referred the issue of disability pension to the National Anomaly Committee on account of the representation received from the defence forces to retain the slab-based system, as it would have resulted in reduction in the amount of disability pension for existing pensioners and a reduction in the amount of disability pension for future retirees as compared to percentagebased disability pension.

The decision, which will benefit existing and future defence pensioners, would entail an additional expenditure of about `130 crore a year.

The Cabinet meet chaired by Prime Minister Narendra Modi also approved other important proposals relating to modifications in the 7th CPC recommendations on pay and pensionary benefits in the course of their implementations. The benefit of the proposed modifications will be available with effect from January 1, 2016, i.e., the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill alone of the central government is likely to be `1,76,071 crore. The Cabinet also approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet.