Seventh Pay Commission Revised Pension Calculation

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: November 22, 2015 at 11:29 am

Last Updated on December 29, 2015 at 11:30 am

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.

Then,

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  1. The pay band and grade pay corresponding to the last drawn pay has to be computed.
  2. This will be used in the Pay Matrix (see below) and the revised basic salary corresponding to the minimum level will be determined.
  3. The number of increments earned by the retiree corresponding to the last drawn pay is then required.
  4. These increments at 3% each will be added to the revised basic salary determined in step 2.
  5. 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

seventh-pay-commission-pay-matrix-for civilians

Example.

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.