8th Pay Commission: As soon as discussions about the Eighth Pay Commission begin, everyone's focus is on salaries. However, this time, the number of pensioners outnumbers that of employees, making their issue even more pressing. According to the government's pensioners' portal, there are a total of 6.872 million pensioners as of October 30, 2025, while the number of central government employees is around 5 million. 

The government has approved the Terms of Reference (TOR) for the 8th Pay Commission. An 18-month deadline has been set for preparing the report, and former Supreme Court Justice Ranjana Prakash Desai has been appointed its chairperson. Now, pensioners want to know how much their pension will increase. Let's understand the complete calculation.

What is the fitment factor, and how much will the pension increase? What is the fitment factor?
The fitment factor plays a crucial role in increasing pensions. This is a multiplier used to convert the old basic pay or basic pension into the new pay. The fitment factor in the 7th Pay Commission is 2.57. This means that if someone's old basic salary was ₹10,000, the new salary will be ₹10,000 × 2.57 = ₹25,700. The fitment factor in the 8th Pay Commission will be determined after Cabinet approval.

Will only the basic pension change?

No, the basic pension is not the only issue for pensioners. The Terms of Reference include several pension-related points, such as:

Reinstatement of pension, gratuity, family pension, and commuted pension

Proposal to increase the pension every 5 years

Reinstatement of the Old Pension Scheme (for those recruited after January 1, 2004)

Integration of CGHS medical facilities, cashless treatment, and dearness relief (DA/DR) into salary and pension.

What are the main demands of pensioners?
Manjeet Singh Patel, National President of the All India NPS Employees Federation, explains that the higher the fitment factor, the greater the pension increase. The commutation period should be reduced from 15 years to 12 years, as currently 40% of the pension is deducted. CGHS hospitals are not available in every district. Currently, medical benefits are only ₹3,000 per month; this should be increased to ₹20,000.

How does the pension increase?
Let's understand the complete calculation based on the fitment factor. Suppose a person's old basic pay was ₹40,000, then the old pension would be 50%, i.e., ₹20,000.

Fitment Factor New Basic Pay New Pension (50%)
2.57 40,000 × 2.57 = ₹1,02,800 ₹51,400
3 40,000 × 3 = ₹1,20,000 ₹60,000
3.68 40,000 × 3.68 = ₹1,47,200 ₹73,600

How will the pension increase from ₹25,000 to ₹50,000?
If the fitment factor is 2.0, the pension can be ₹25,000 × 2 = ₹50,000.

How will the dearness relief increase?
DR is a percentage of the basic pension.

Old Pension ₹20,000 → DR 20% = ₹4,000
New Pension ₹30,000 → DR 20% = ₹6,000
This means that an increase in the basic pension will automatically increase DR.

What changes will occur in EPS, Family Pension, and Enhanced Pension?
What are the types of pensions? New Impact
EPS: When the new pay matrix based on the last basic salary is implemented, EPS will also increase.
Family Pension: After the death of the pensioner, the wife/family will receive a 30% increase in the basic salary, and the family pension will also increase.
Enhanced Pension: This will also increase if the Fitment Factor is higher due to long service, or commutation is restored.
What are the types of pensions? New Impact
EPS: If the new pay matrix based on the last basic salary is implemented, EPS will also increase.
Family Pension: Upon the death of the pensioner, the wife/family will receive a 30% increase in the basic salary, and the family pension will also increase.
Enhanced Pension: If long service or commutation is restored, the fitment factor will also increase.

Example:

Old Family Pension: ₹20,000 → 30% = ₹6,000
New Pension: ₹30,000 → 30% = ₹9,000
How much will the tax increase?
Details: Old Pension New Pension
Basic Pension ₹20,000/month ₹50,000/month
Annual Amount ₹2,40,000 ₹6,00,000
DA/DR ₹72,000 ₹1,80,000
Total Taxable ₹3,12,000 ₹7,80,000
Tax Payable ₹600 ₹66,000

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