India’s central government may revise the pension restoration period for retired employees from 15 to 12 years. The long-standing demand was discussed in the SCOVA meeting on March 11, 2025, and could now be part of the 8th Pay Commission’s agenda.
In a significant development for central government retirees, the Indian government is considering a proposal to reduce the commuted pension restoration period from 15 years to 12 years. This issue was discussed during the 34th meeting of the Standing Committee of Voluntary Agencies (SCOVA) held on March 11, 2025.
The matter was brought up as a key demand by pensioners and employee unions who argue that the existing 15-year recovery period is outdated and unjust, especially given the steadily declining interest rates set by the Reserve Bank of India (RBI). They claim that the current financial conditions reduce the advantage previously enjoyed by the government in recouping lump-sum payouts over an extended period.
The Ministry of Finance, Government of India informed SCOVA that this concern may be officially included in the Terms of Reference (ToR) for the 8th Pay Commission. Once added, a formal recommendation is expected to be made through the commission. This clarification led to the issue being removed from SCOVA’s immediate agenda.
The demand to reduce the commuted pension restoration period is not new. It has been consistently raised by Shiv Gopal Mishra, Secretary (Staff Side), National Council – JCM, who recently addressed a letter to Prime Minister Narendra Modi listing 14 pressing demands. Among these, the pension restoration period stood out as a top priority.
The revised policy, if approved, could benefit lakhs of retired central government employees, providing much-needed financial relief amid rising healthcare costs and inflation. The 5th Pay Commission and several Indian state governments have already recommended the 12-year timeframe, bolstering hopes for a central-level change.
As anticipation builds around the 8th Pay Commission’s formal recommendations, retired employees across India are looking to the government for a decision that ensures both financial stability and dignity in their post-retirement lives.
