MEMORANDUM TO THE 8TH CENTRAL PAY COMMISSION
Submitted by: All India Pensioners Association of CBIC
To
The Chairman
8th Central Pay Commission
Sir,
Subject: Comprehensive Revision of Pay, Pension, and Welfare Measures for Employees and Pensioners – Urgent Consideration and Implementation
The All India Pensioners Association of the Central Board of Indirect Taxes and Customs (CBIC) respectfully submits this memorandum for your urgent and sympathetic consideration. At the outset, we submit with utmost seriousness that the existing pay and pension structure has failed to keep pace with the unprecedented rise in the cost of living, persistent erosion of real income, and the legitimate expectations of employees and pensioners who have rendered long, unblemished, and dedicated service to the nation.
While earlier Pay Commissions have made incremental improvements, they have not adequately addressed structural inequities, nor ensured parity, dignity, and financial security—particularly for pensioners. The present memorandum, therefore, places before the Commission a set of well-reasoned, just, and non-negotiable demands grounded in constitutional principles, judicial pronouncements, and socio-economic realities.
- Date of Implementation and Pension Parity
All benefits arising from the recommendations of the 8th Central Pay Commission must be implemented with effect from January 1, 2026, without exception. Any deviation would result in grave financial injustice.
Further, complete parity between past and future pensioners must be ensured, as upheld by the Hon’ble Supreme Court in D.S. Nakara vs. Union of India (1983), which unequivocally established that pensioners form a homogeneous class and cannot be discriminated against arbitrarily.
Fitment Factor
A fitment factor of 3.86 must be granted uniformly to all present and future pensioners. This demand is justified on the basis of:
• Sustained and steep inflation over successive decades.
• Continuous erosion of real wages and pensions.
• The inadequacy of previous fitment formulas in ensuring true neutralization.
• The necessity to maintain a dignified post-retirement life in line with Article 21 of the Constitution (Right to Life with dignity).
Annual Increment and Dearness Relief Reform
An annual increment of 6% for pensioners must be introduced as a matter of right. Pensioners are unjustly excluded from any progression mechanism, unlike serving employees.
Additionally:
• Dearness Relief (DR) must be linked to actual retail prices, particularly reflecting rural consumption patterns.
• DR should be automatically revised every six months without administrative delays.
These measures are essential to preserve purchasing power and prevent progressive impoverishment of pensioners.
Restoration of Old Pension Scheme (OPS)
The Old Pension Scheme must be restored for employees recruited on or after January 1, 2004. The New Pension System (NPS):
• Shifts the burden of social security from the State to the individual.
• Subjects retirement benefits to volatile market conditions.
• Violates the doctrine of legitimate expectation and social justice.
Pension is not a bounty but a deferred wage, as consistently held by the Hon’ble Supreme Court. A guaranteed pension system is indispensable for ensuring post-retirement security.
Pension Structure
• Pension must be fixed at 75% of the last pay drawn.
• Family pension must be fixed at 60% of the last pay drawn.
Further:
• Existing pensions must be revised on a notional basis, including grant of due increments, to remove historical anomalies and restore equity.
These measures are imperative in view of rising life expectancy, escalating healthcare costs, and inflationary pressures.
- LTC Benefits for Pensioners
Pensioners must be extended Leave Travel Concession (LTC) with:
• Encashment of 30 days of earned leave during LTC.
This is essential for promoting physical and mental well-being and ensuring social inclusion of pensioners.
- Restoration of Commutation
The commuted portion of pension must be restored after 10 years, instead of the present 15 years, and this provision must be implemented retrospectively from January 1, 1996.
The existing 15-year period is arbitrary, lacks actuarial justification, and results in prolonged and unjust financial hardship.
- One Rank One Pension (OROP)
The principle of One Rank One Pension (OROP) must be extended to uniformed and disciplined services such as CBIC, where personnel discharge duties involving risk, accountability, and uniformed hierarchy.
Equal rank and equal length of service must guarantee equal pension, irrespective of the date of retirement, in the interest of fairness and morale.
- Implementation of Court Judgments in Rem
All judicial pronouncements relating to service and pension matters must be implemented in rem. It is unjust and legally untenable to compel individual pensioners—often aged and infirm—to approach courts repeatedly for relief already adjudicated.
Such implementation will:
• Uphold the rule of law,
• Reduce avoidable litigation,
• Ensure uniform justice.
- Tax Exemption for Pensioners
• Pension income must be fully exempt from income tax.
• Interest income earned by pensioners must also be exempt.
Pension, being deferred wages, cannot be equated with income from active economic activity. Taxing pensioners imposes an unfair and regressive burden on a vulnerable section of society.
- Comprehensive Reform of CGHS
A complete and time-bound overhaul of the Central Government Health Scheme (CGHS) is imperative:
• Establish wellness centers in every district across the country.
• Universal empanelment of private hospitals for cashless treatment without referral formalities.
• Mandatory annual health check-ups for all pensioners.
• Functional pharmacy units in every wellness center.
• Uninterrupted supply of medicines prescribed by specialists without alteration of brands.
• All medical expenses to be covered under a comprehensive government-funded insurance scheme.
• Provision for treatment abroad through insurance coverage when pensioners are visiting foreign countries.
• Enhancement of Fixed Medical Allowance (FMA) to ₹5000 per month.
Healthcare access is a fundamental right, and denial or dilution of medical facilities directly infringes upon the right to life and dignity.
Conclusion
The demands articulated herein are not concessions but legitimate, just, and constitutionally supported entitlements. Pensioners have devoted the most productive years of their lives in the service of the nation, and it is the solemn duty of the State to ensure their financial security, dignity, and well-being.
The Association strongly urges the 8th Central Pay Commission to accept these demands in totality and recommend their time-bound implementation without dilution. Any partial or deferential approach will only perpetuate systemic injustice and deepen the hardships faced by pensioners.
We trust that the Commission will act with fairness, foresight, and a deep sense of responsibility to deliver a transformative and humane framework.
With respectful regards,
Yours faithfully,
(Lokanath Mishra)
Chief Adviser
All India Pensioners Association of CBIC