The seventh commission has recommended a more “equitable” pension formula modelled broadly on the lines of the “one-rank-one-pension” rule.
“The Commission recommends a revised pension formulation for civil employees including central armed police force personnel as well as for defence personnel,” the commission said in its report, which was submitted to the government on Thursday.
“This formulation will bring about parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement,” it said.
Based on the current trend, the total expenditure on pension during 2016-17, after implementation of the recommendations of the seventh pay commission, is likely to rise to Rs 1,76,300 crore, an increase of 23.63% or about Rs 33,700 crore.
“In arriving at the above it has been borne in mind that the year on year increase, in both pay and in pensions, has averaged about 11%,” the commission said.
This takes into account the annual increments, the increase on account of dearness allowances, as well as pay-outs that are indexed to the rate of dearness allowance.
On gratuity, the commission has recommended enhancing the ceiling from the existing Rs 10 lakh to Rs 20 lakh.
The commission has also recommended the introduction of health insurance scheme for central government employees and pensioners. “Health insurance for the government employees and pensioners remains the most optimal route for ensuring complete coverage for all employees, pensioners and their dependants in the long run,” it said.
In the interregnum, for the benefit of pensioners residing outside the Central Government Health Service (CGHS) areas, the Commission recommends that CGHS should empanel more hospitals which are already empanelled under for catering to the medical requirement of these pensioners on a cashless basis, it said.