Here is how the revised pension will be calculated as per the seventh pay commission pay matrix. This is applicable for all civilian pensioners who retire before 01-01-2016.
After the seventh pay commission comes into being, as an interim measure, the revised pension will initially be equal to
2.57 times the pension fixed at the time of implementation of the 6th pay commission. Let call this figure II.
- The pay band and grade pay corresponding to the last drawn pay has to be computed.
- This will be used in the Pay Matrix (see below) and the revised basic salary corresponding to the minimum level will be determined.
- The number of increments earned by the retiree corresponding to the last drawn pay is then required.
- These increments at 3% each will be added to the revised basic salary determined in step 2.
- 50% of the amount determined above will be the revised pension. Call this figure II.
If II is greater than the interim revised pension I, then II will be the revised pensio and corresponding arrears will be paid.
If I is greater than II, then I will the revised pension.
Seventh Pay Commission Pay Matrix for Civilian employees
Suppose your pension fixed as per 6th PC is 10,000.
The interim pension II will be 2.57 x 10,000 = 25,700
Suppose the pay-band corresponding to last drawn pay is 37400-67000 and grade pay is 10,000,
the lowest basic pay as per above pay matrix is 144200.
Suppose you had received 5 increments at last drawn pay, then
144200 x (1+3%)^5 or
144200 x (1+3%) x (1+3%) x (1+3%) x (1+3%) x (1+3%) =1,67,167
This is the notional pay after 5 increments. Alternatively, one can simply move 5 rows down from 144200 in the pay martix to arrive at 167200. Thanks to Capt. A K Anand for pointing this out.
50% of this notional pay = 83,584. This is referred to as I.
Since I is greater than II, I will be new revised pension.
Initially, II will be given and then I will be paid with arrears.
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google Plus and Pinterest
Do check out my books
My first book is now available at a 35% discount for Rs. 258. It comes with nine online calculators. Get it now . The Kindle edition is only Rs. 199.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is now only Rs 199 (Kindle Rs. 99) Get it or gift it to a young earner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)