Big Win for Central Govt Employees: Notional Increment Granted for Those Retiring a Day Before Annual Pay Hike.In a major relief for thousands of Central government employees, the Centre has officially directed all ministries to grant a notional increment for pension calculation to employees retiring a day before their scheduled annual pay hike date.This his long-delayed development follows a significant Supreme Court ruling on February 20, 2045 and will affect pensioners who retire on June 30 or December 31, one day before their respective increment dates of July 1 or January 1.
Why It Matters
Previously, if employees had superannuated immediately prior to their increment date, they were not able to benefit from the increment in their pension. The Supreme Court determined that the situation was unreasonable and concluded as a remedy, the Court would award a notional (i.e., theoretical) increment only for the purpose of calculating pension.
The official order issued by the Ministry of Personnel states that employees with qualifying service and who retire in good standing on June 30 or December 31 will receive notional increment for the purposes of pension calculation.
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Key Highlights of the Order
Qualifying Clause: Employees who retire on June 30 or December 31 with qualifying service and in good standing.
1.Date of Increment: The dates of the increment will be as of July 1 or January 1 at the employee’s election.
2.Impact on Pension: The increment is only for calculating pension only. It will not apply to their other pensionary benefits like gratuity or leave cash out.
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What the Supreme Court Said
The apex court, in its decision, made it clear, ‘The grant of the notional increment on January 1 or July 1 shall be reckoned solely for the purpose of calculating the pension admissible.’ This judgment puts to rest years of legal ambiguity, providing clarity and consistency in handling pension-related benefits for Central government retirees.
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What’s Not Covered
While this is good news for many, the order also clarifies that ,the enhanced pension applies only for retirements on or after May 1, 2023.There will be no arrears paid for the period prior to this date.
A Welcome Step by the Government
The All India NPS Employees Federation, which advocates for both Central and state government employees, praised the move and extended thanks to the Centre. Federation President Manjeet Singh Patel further urged the government to extend this benefit to those under the National Pension System (NPS) as well.With Rs.48.66 lakh Central government employees in the system, this decision could very well impact a large portion of the workforce close to retirement by bringing long-term financial security and satisfaction.
Bottom Line:
If you or someone you know, are retiring on the day before a scheduled annual increment date, this decision guarantees that your pension will not be deficient for the mere difference of one day. It is a good reminder that sometimes the smallest detail makes the biggest difference,especially forthose near the end of their benefits.