Key Developments in the 8th Pay Commission Preparations

The preparations for the 8th Central Pay Commission are intensifying as employee representatives gather in New Delhi to consolidate their demands. With over 1.2 crore central government employees and pensioners involved, key issues such as the fitment factor, annual increments, and pension reforms are at the forefront. The proposed multi-level fitment factor aims to provide better support for lower-level employees, while unions are advocating for increased annual increments and a broader definition of family units. Additionally, significant changes in allowances and retirement benefits are being discussed, including the restoration of the Old Pension Scheme. The outcomes of this drafting session will play a crucial role in shaping the memorandum submitted to the commission.

By Narendra Chaudhary Feb 25, 2026, 14:10 IST

Significant Preparations for the 8th Pay Commission

8th Pay Commission Update: The preparations for the 8th Central Pay Commission (CPC) have reached a crucial stage, as representatives of employees gear up to present their consolidated demands during an important meeting in the capital. The Drafting Committee of the National Council (Staff Side) under the Joint Consultative Machinery (NC-JCM) is scheduled to conduct a week-long session in New Delhi, aiming to create a unified memorandum for over 1.2 crore central government employees and pensioners. This timing is particularly noteworthy as the 8th Pay Commission has commenced operations from its new office located at the Chandralok Building on Janpath. Led by Justice Ranjana Prakash Desai, the commission is expected to initiate structured consultations shortly, making this drafting effort a vital preparatory step for the unions.

Importance of the Memorandum

Employee federations are keen to ensure that their issues are officially documented before in-depth discussions with the commission commence. There is growing concern among certain staff members, as several previously raised issues were omitted from the official Terms of Reference (ToR). Consequently, this meeting is perceived as a strategic move to compile all outstanding demands into a cohesive and comprehensive charter. Key areas of focus include the fitment factor, pension reforms, annual increments, and post-retirement benefits.

Focus on Multi-Level Fitment Factor

One of the most contentious proposals is the introduction of a “multi-level fitment factor” rather than a single multiplier across all pay levels. The Federation of National Postal Organisations (FNPO) supports a tiered structure based on the “Akroyd Formula,” which determines minimum wages by considering the essential needs of a four-member household.

Proposed Structure Includes:

Levels 1 to 5: 3.00 factor
Levels 6 to 12: 3.05 to 3.10
Levels 13 to 15: 3.05 to 3.15
Levels 16 to 18: Up to 3.25

The goal is to provide more support to lower-level employees while preventing pay compression at higher grades. These figures are still proposals and have not yet been officially recommended.

Push for Increased Annual Increment and Family Redefinition

Currently, central government employees receive a 3 percent annual increment. Federations are advocating for an increase to 7 percent, while FNPO has suggested a minimum of 5 percent. They argue that higher increments are essential to counter inflation and ensure consistent financial growth during service. Another significant demand is to expand the definition of a “family unit” from three to five members, which would include dependent parents. If approved, this change could greatly impact wage calculations and enhance basic pay under future formulas.

Debate on Allowances, Retirement Benefits, and OPS

In addition to salary adjustments, unions are calling for substantial changes in allowances and retirement benefits. Proposals include increasing the Fixed Medical Allowance (FMA) for pensioners in non-CGHS areas from Rs 1,000 to Rs 20,000 per month, allowing cash encashment of Leave Travel Concession (LTC), and raising the leave encashment limit from 300 to 400 days at retirement. The restoration of the Old Pension Scheme (OPS) remains one of the most sensitive issues. Several federations continue to push for the elimination of the National Pension System (NPS) and the Unified Pension Scheme (UPS), arguing that a defined-benefit pension system provides better post-retirement security. However, the government insists that the NPS is financially sustainable in the long run.

The results of this drafting session will influence the memorandum presented to the 8th Pay Commission. While the commission's final position is still unclear, unions are determined to keep the 3.25 fitment factor, 7 percent annual increment, and OPS restoration central to the discussion.