8th Pay Commission Pension Calculations: Best- and worst-case fitment factor scenario, revised pension projections for central govt employees in Level 1-18 pay matrix
8th Pay Commission Pension Calculations: In the pay commission, the basic pensions along with the basic salaries of central government employees are also revised. As the 8th Pay Commission has been announced, what may be the possible revised pensions in the best- and worst-case fitment factor scenarios? See our projections to know it.
8th Pay Commission Pension Calculations: With the announcement of the 8th Pay Commission, the expectations of central government pensioners are high. They are expecting their pensions to rise exponentially. But it may take some time as the Commission is yet to be formed. After formation, once it gives its recommendations to the Cabinet, Centre will approve them for implementation. The entire process may take more than a year. Revised salaries and pensions will depend on the fitment factor, which depends on the DA calculation as on January 1, 2026, and the expected salary. But what may be the fitment factor in best- and worst-case scenarios, and what may be the projected revised pensions in the 8th Pay Commission? Know in this article.
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(Disclaimer: These are projections. Actual calculations may vary.)
8th Pay Commission formation
The commission formation is in process, but the government has not announced the name of the chairman and its members. Replying to a question in Lok Sabha, Finance Minister Nirmala Sitharaman said last month that the commission's details, including the terms of reference and the timeline for the report’s submission, would be decided later.
How salaries, pensions were revised in 7th Pay Commission
In the 7th Pay Commission, they were decided on the basis of the fitment factor, which was taken at 2.57.
It means the basic pay and pensions applied to pensioners in the 6th Pay Commission were multiplied by 2.57.
Examples of pension revisions in 7th Pay Commission?
If a central government employee retired at last-draw basic pay of Rs 79,000, as on May 31, 2015, under the 6th Pay Commission in the scale of Rs 67,000-Rs 79,000. Here's what their pension was in the 6th Pay Commission and the 7th Pay Commission.
Examples of pension revisions in 7th Pay Commission?
Basic pension in 6th Pay Commission- Rs 39,500
Basic pension in 7th Pay Commission- Rs 1,01,515 (using a multiple of 2.57)
What if somebody retired in the 4th Commission?
Take another example: if someone retired at last-drawn basic salary of Rs 4,000 as on January 31, 1989, under the 4th Pay Commission in the pay scale of Rs 3,000-100-3,500-125-4,500, here's what their basic pension was revised-
What if somebody retired in the 4th Commission?
Basic pension in 4th Pay Commission- Rs 1,940
Basic pension in 6th Pay Commission- Rs 12,600
Basic pension in 7th Pay Commission- Rs 32,382
Minimum and maximum pensions in 7th Pay Commission
The minimum pension was raised to Rs 9,000, while the maximum was raised to Rs 1,25,000.
What may be fitment factor for 8th Pay Commission?
It may depend on the dearness allowance (DA) reading as on January 1, 2026, and the expected salary that the Pay Commission recommends. However, the Cabinet can also come up with its suggestion even after the Pay Commission has suggested a fitment factor.
8th Pay Commission- Worst case-scenario projection for fitment factor
Based on the assumption of the minimum DA hike of 2 per cent each in the next 2 phases, it may reach from its current rate of 55 per cent to 59 per cent on January 1, 2026.
Analysing recommended salary rises from the 2nd to the 6th Pay Commissions, the worst was 14.20 per cent in the 2nd, and the best was 54 per cent in the 6th. The average hike from the 2nd to the 6th was 27 per cent. The recommendation for the 7th Pay Commission was 14.27 per cent.
Historically, the worst-case scenario for the expected salary hike is 14.20 per cent.
8th Pay Commission: Best case-scenario projection for fitment factor
Now suppose the DA hike for the next 2 cycles is 3 per cent each; it will reach 61 per cent by January 1, 2026.
Similarly, if we look at historical salary rise recommendations, the highest has been for 54 per cent for the 6th Pay Commission.
Fitment factor calculation for worst-case scenario
For this calculation, we are taking the DA of 59 per cent and the expected salary rise recommendation of 14.20 per cent. According to that, the estimated fitment factor will be 1.82.
Fitment factor calculation for best-case scenario
For this calculation, we are taking a 61 per cent DA rate and the expected salary rise recommendation of 54 per cent. According to that, the estimated fitment factor will be 2.48.
Calculations for story
Based on estimated fitment factors of 1.82 and 2.48, we will calculate the estimated revised pensions for central government employees in 1-18 pay matrix brackets.
Estimated revised pension projections at 1.82 fitment factor (Level 1-18)
| Grade | Current basic pension | Projected basic pension |
| Level 1 | ₹ 9,000.00 | ₹ 16,380.00 |
| Level 2 | ₹ 9,950.00 | ₹ 18,109.00 |
| Level 3 | ₹ 10,850.00 | ₹ 19,747.00 |
| Level 4 | ₹ 12,750.00 | ₹ 23,205.00 |
| Level 5 | ₹ 14,600.00 | ₹ 26,572.00 |
| Level 6 | ₹ 17,700.00 | ₹ 32,214.00 |
| Level 7 | ₹ 22,450.00 | ₹ 40,859.00 |
| Level 8 | ₹ 23,800.00 | ₹ 43,316.00 |
| Level 9 | ₹ 26,550.00 | ₹ 48,321.00 |
| Level 10 | ₹ 28,050.00 | ₹ 51,051.00 |
| Level 11 | ₹ 33,850.00 | ₹ 61,607.00 |
| Level 12 | ₹ 39,400.00 | ₹ 71,708.00 |
| Level 13 | ₹ 59,250.00 | ₹ 1,07,835.00 |
| Level 13 | ₹ 65,550.00 | ₹ 1,19,301.00 |
| Level 14 | ₹ 72,100.00 | ₹ 1,31,222.00 |
| Level 15 | ₹ 91,100.00 | ₹ 1,65,802.00 |
| Level 16 | ₹ 1,02,700.00 | ₹ 1,86,914.00 |
| Level 17 | ₹ 1,12,500.00 | ₹ 2,04,750.00 |
| Level 18 | ₹ 1,25,000.00 | ₹ 2,27,500.00 |
Estimated revised pension projections at 2.48 fitment factor(Level 1-18)
| Grade | Current basic pension | Projected basic pension |
| Level 1 | ₹ 9,000.00 | ₹ 22,320.00 |
| Level 2 | ₹ 9,950.00 | ₹ 24,676.00 |
| Level 3 | ₹ 10,850.00 | ₹ 26,908.00 |
| Level 4 | ₹ 12,750.00 | ₹ 31,620.00 |
| Level 5 | ₹ 14,600.00 | ₹ 36,208.00 |
| Level 6 | ₹ 17,700.00 | ₹ 43,896.00 |
| Level 7 | ₹ 22,450.00 | ₹ 55,676.00 |
| Level 8 | ₹ 23,800.00 | ₹ 59,024.00 |
| Level 9 | ₹ 26,550.00 | ₹ 65,844.00 |
| Level 10 | ₹ 28,050.00 | ₹ 69,564.00 |
| Level 11 | ₹ 33,850.00 | ₹ 83,948.00 |
| Level 12 | ₹ 39,400.00 | ₹ 97,712.00 |
| Level 13 | ₹ 59,250.00 | ₹ 1,46,940.00 |
| Level 13 | ₹ 65,550.00 | ₹ 1,62,564.00 |
| Level 14 | ₹ 72,100.00 | ₹ 1,78,808.00 |
| Level 15 | ₹ 91,100.00 | ₹ 2,25,928.00 |
| Level 16 | ₹ 1,02,700.00 | ₹ 2,54,696.00 |
| Level 17 | ₹ 1,12,500.00 | ₹ 2,79,000.00 |
| Level 18 | ₹ 1,25,000.00 | ₹ 3,10,000.00 |