7th Central Pay Commission Implemented – Highlights

7th Central Pay Commission Implemented – Highlights

• Recommendations of 7th CPC on pay and pensionary pensionary benefits benefits will come into effect from 01.01.2016.
• 7th CPC recommendations are being implemented within 6 months from the due date.
• Arrears of pay & pensionary benefits to be paid during FY 2016-17 itself, unlike past when parts of arrears were paid in the next FY.
• Award of 7th CPC approved by Cabinet will benefit over 1 crore employees including over 47 lakh central government employees and 53 lakh pensioners, pensioners, of which 14 lakh employees employees and 18 lakh pensioners are from defence forces.

PAY

• Separate Pay Matrices for Civil, Defence and MNS
• Minimum Minimum Pay increased increased from 7000 to 18000
• Fitment factor of 2.57 to apply for pay revision of all
• Rate of annual increment retained at 3%.
• Two dates of increments in place of existing one : 1st Jan & 1st July
• Improvements made in Defence Pay Matrix:
• Index of Rationalisation for Brigadier increased from 2.57 to 2.67
• Additional stages provided in Levels of Lt. Col., Col & Brig.

PENSION

• General recommendations of Commission on pension and related benefits approved
• Both options of Commission regarding pension revision accepted subject to feasibility of their implementation
• Revision of pension using second formulation based on fitment factor of 2.57 shall be implemented immediately.
• Committee to address the implementation issues anticipated in first formulation.
• First formulation to be made applicable if its implementation implementation is found feasible feasible after examination examination by proposed Committee which is to submit its Report within 4 months.
• Gratuity increased from 10 to 20 lakh

ALLOWANCES AND ADVANCES

• Committee headed by Finance Secretary to examine recommendations on Allowances in view of significant significant departure departure from existing existing system and demands from employees for review
• Report of Committee to be submitted in 4 months
• Pending final decision based on the report of the Committee, all allowances to be paid as per existing rates in existing pay structure
• Interest bearing advances – HBA and PC advance retained. HBA ceiling raised to 25 lakh from 7.5 lakh
• All interest free advances abolished except for –medical treatment, TA on tour/Transfer, TA for family of deceased deceased employee employee and LTC to avoid hardship to employees.

OTHER ISSUES

• The existing rates of monthly contribution towards Group Insurance – CGEGIS to continue.
• MoF to work out a customized group insurance scheme with low premium and high risk cover.
• Ex-gratia lump sum compensation for civil and defence forces personnel payable to Next of Kin enhanced from 10-20 lakh to 25-45 lakh.
• Military Service Pay increased from 1000 2000 1000, 2000, 4200 & 6000 to 3600, 5200, 10800 & 15500
• Terminal gratuity for Short Service Commissioned Officers exiting between 7 and 10 years of service increased to 10.5 times reckonable emoluments.
• All administrative issues other than pay, pension and allowances to be examined by concerned Ministries/Departments
• Two separate Committees to be set up to
•  suggest measures for streamlining the implementation of National Pension System (NPS);
• to look into anomalies likely to arise out of implementation of the Commission’s Report.

FINANCIAL IMPLICATIONS

• Additional financial impact, as per 7th CPC, on account of implementation of all its recommendations recommendations for 2016-17 will be 1,02,100 crore (including Allowances)
• Additional implication of 12,133 crore on account of payments of arrears of pay and pension for two months of 2015-16