Higher pension: These central government employees to get pension hike due to minor salary increase
This move will significantly impact pension calculations for eligible retired employees and serve as a welcome relief to many who have been awaiting clarity following court interventions.
The notional increment is for the purpose of calculating pensionary benefits. Although monetary increments are not paid during service, they are taken into account when calculating pensions.
The benefit of a notional increment for pension purposes will be available to officials retiring or who have retired on June 30 or December 31 on or after January 1, 2006, contingent upon meeting the conditions outlined in the DoPT's Office Memorandum dated February 20, 2025.
Read more: Central govt employees will get notional increment if they are retiring a day before annual pay hike
On February 20, 2025, the Department of Personnel and Training (DoPT) issued a detailed clarification regarding the granting of notional increments on July 1 or January 1 to central government employees who retire on June 30 or December 31, respectively, and have completed the required qualifying service with good conduct and satisfactory performance by the date of their retirement, specifically for the calculation of their pension. This increment will be considered only for pension calculation, not for any other pensionary benefits. Effective date for monetary benefit Effective May 1, 2023, all eligible pensioners who retire on or before April 30, 2023, will receive the actual financial benefits resulting from the increased pension (due to the notional increment). The specific instructions from the court will be applicable to individuals who currently hold court orders in their favour.
8th Pay Commission: Has govt received any suggestions on Terms of Reference for 8th Pay Commission? Check the Parliament statement, suggestions According to the DoP order on July 17, 2025, 'The actual monetary benefit of higher pension based on this notional increment will be paid with effect from 01.05.2023 to all eligible employees who retired on or before 30.04.2023, except those who already have a court order in their favour. In such cases, the specific directions of the court shall apply.' Special cases with legal proceedings The Department of Posts order issued on July 17, 2025, stated, 'If an eligible retired employee has filed an application for intervention, impleadment, writ petition, or original application before a CAT, High Court, or the Supreme Court, the enhanced pension by including one increment will be payable for the period of three years prior to the month in which the application for intervention/impleadment/writ petition/original application was filed.'
Conflicting lower court orders to be challenged If any lower court orders contradict the Supreme Court's February 20, 2025, decision or violate the conditions mentioned, they shall be challenged before the higher judiciary to maintain consistency.
Re-opening of cases decided in the past The cases which have already been implemented need not be re-opened, the DoP order said.
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