Pay fixation on re-employment

Pay fixation on re-employment is the fixation of pay of a central government pensioner taken back into a government post after retirement, governed by the Central Civil Services (Fixation of Pay of Re-employed Pensioners) Orders, 1986, issued by the Department of Personnel and Training by Office Memorandum No. 3/1/85-Estt.(Pay II) dated 31 July 1986 and last substituted for the pay matrix by Office Memorandum No. 3/3/2016-Estt.(Pay II) dated 1 May 2017.

The age at retirement decides the outcome, not the seniority of the post. Order 4(d) of the 1986 Orders ignores a part of the pension only “in the case of persons retiring before attaining the age of 55 years”. A pensioner who retired on superannuation at 60 is outside Order 4(d) entirely, and paragraph 8(iv) of the Office Memorandum dated 1 May 2017 deducts the whole pension from the pay fixed. The categories that keep something are those that left early: a civilian below Group A or an ex-serviceman below commissioned officer rank who retired before 55 keeps the entire pension, and a Group A civilian or a commissioned officer who retired before 55 keeps the first Rs. 15,000 of it.

Three fixation routes follow from that split, and they do not run in the direction most readers expect. Where the pension is fully ignored, Order 4(b)(i) fixes the initial pay at the first cell of the level, the same place a direct recruit starts under Rule 8 of the CCS (Revised Pay) Rules, 2016. Where the pension is only partly ignored, Order 4(b)(ii) fixes the initial basic pay at the same stage as the last basic pay drawn before retirement, which is usually far higher, and then subtracts the non-ignorable pension. The pensioner whose pension is protected gets the worse starting pay; the pensioner whose pension is raided gets the better one.

The three fixation routes and which one applies

Two facts select the route: the age at which the pensioner retired, and the group of the post held at the time of retirement. Order 4(d) of the CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986 opens on the age condition, and everything else follows from it.

The third row covers the largest group in practice. The retirement age for a central government servant is 60, so an ordinary superannuant is never inside Order 4(d). Only a voluntary retirement or premature retirement taken before 55, an invalid retirement, or a Defence Forces retirement at a service age below 55 reaches the concession. Paragraph 8(iv) of the Office Memorandum dated 1 May 2017 states the residual rule in terms: “Pay fixation in cases not covered in Order 4(d) will be as per the general principle of ‘pay minus pension’, i.e. while the last pay drawn shall be reckoned for pay fixation, the entire pension shall be deducted from the pay so fixed.”

The 7th Central Pay Commission described the same position at paragraph 6.2.37 of its report: if a person retires on superannuation and is re-employed thereafter, full pension is deducted from the pay fixed on re-employment.

Pay minus pension: the deduction and its ceiling

Pay minus pension means that the non-ignorable part of the pension is subtracted from the pay fixed in the level of the re-employed post, and the pensioner then draws the reduced pay and the pension separately. Order 4(c) of the 1986 Orders puts the second half beyond argument: the re-employed pensioner, in addition to the pay fixed under Order 4(b), is permitted to draw separately any pension sanctioned and to retain any other form of retirement benefit.

The deduction is not a recovery from the pension. The pension is paid in full by the pension disbursing bank on the Pension Payment Order; what shrinks is the salary bill of the re-employing office. That distinction matters for income tax, because the reduced pay and the full pension are separately taxable receipts under the head salaries.

Paragraph 4 of DoPT Office Memorandum No. 3/3/2016-Estt.(Pay II) dated 1 May 2017 caps the combination: “the existing ceiling of Rs. 80,000/- for drawal of pay plus gross pension on re-employment is enhanced to Rs. 2,25,000/-, the maximum basic pay prescribed for Secretary to the Government of India under Central Civil Services (Revised Pay) Rules, 2016.” The ceiling has moved with each pay commission. The 1986 Orders set it at Rs. 3,500 a month, carried over from Ministry of Finance Office Memorandum No. 8(34)Estt.III/57 dated 25 November 1958. Paragraph 5 of the Office Memorandum dated 11 November 2008 raised it from Rs. 26,000 to Rs. 80,000.

Two carve-outs cut into the deduction. Paragraph 8(ii) of the 2017 Office Memorandum excludes Military Service Pay from both sides of the calculation: it is not granted as part of the re-employed pay, and the Military Service Pay element contained in the pension is ignored when the pension is deducted. Order 3(1) is the other, and it runs against the pensioner rather than for them, because it reaches the gratuity as well as the monthly pension.

Order 4(b)(i): the first cell of the level where the pension is fully ignored

Where the entire pension is ignored under Order 4(d)(i), the initial pay on re-employment is fixed at the first cell of the level. Order 4(b)(i), as substituted on 1 May 2017, reads: “In all cases where the pension is fully ignored, the initial pay on re-employment shall be fixed as per Rule 8 of the Central Civil Services (Revised Pay) Rules, 2016.” Note 2 to it defines the trigger plainly: “Pension is fully ignored means that pension is not deducted from pay.”

Rule 8 of the CCS (Revised Pay) Rules, 2016 is the direct-recruitment rule: the pay of employees appointed by direct recruitment on or after 1 January 2016 is fixed at the minimum pay or the first cell in the level applicable to the post. A re-employed pensioner in this route therefore starts exactly where a fresh appointee to the post starts, at Rs. 35,400 in Level 6, Rs. 44,900 in Level 7 or Rs. 18,000 in Level 1, whatever the pay drawn over a full previous career. Nothing carries across except the pension, which is left alone.

The earlier text was narrower in expression and identical in effect. Before 1 May 2017 the same Order read that the initial pay shall be fixed “as per entry pay in the revised pay structure of the re-employed post applicable in the case of direct recruits appointed on or after 1.1.2006 as notified vide Section II, Part A of First Schedule to CCS (RP) Rules, 2008”, the wording introduced by Office Memorandum No. 3/19/2009-Estt.(Pay II) dated 5 April 2010. The switch from an entry-pay table to Rule 8 is what the pay matrix required, since the matrix replaced the entry-pay table with a first cell in each level.

This is the route that carries the long-standing grievance among re-employed ex-servicemen and early-retiring Group C staff. The pension survives untouched, and the pay starts at the bottom of the level.

Order 4(b)(ii): the last basic pay stage where part of the pension is deducted

Where the entire pension is not ignored, the initial basic pay is fixed by reference to the last basic pay drawn before retirement, not by reference to the first cell. Order 4(b)(ii), as substituted on 1 May 2017, runs to four limbs:

• the initial basic pay is fixed at the same stage as the last basic pay drawn before retirement;
• if there is no such stage in the re-employed post, the pay is fixed at the stage next above that pay;
• if the maximum pay in the level applicable to the re-employed post is less than the last basic pay drawn, the initial basic pay is fixed at that maximum;
• if the minimum pay in the level is more than the last basic pay drawn, the initial basic pay is fixed at that minimum.

In all four cases the non-ignorable part of the pension is then reduced from the pay so fixed. Note 2 to the Order defines basic pay in the revised pay structure as the pay drawn in the prescribed level in the pay matrix, so the stage matching is done cell against cell within one level and never against a pay band. The second limb is a change of direction from the 1986 text, which fixed the pay at the stage below the last pay drawn where no equal stage existed; the 2017 substitution moves it to the stage next above.

Note 3 anchors the input: “Last pay drawn shall be as per definition of pre-retirement pay in terms of Order 3 of the CCS (Fixation of Pay of re-employed Pensioners) Orders, 1986, read with DoPT OM No. 3/19/2009-Estt.(Pay-II) dated 8th November 2010.”

A pre-2016 retiree needs one step before the Order can be applied at all, because a pay drawn in a pay band and grade pay has no stage in the pay matrix. Paragraph 8(iii) of the 2017 Office Memorandum supplies it: the revised basic pay at the time of retirement is first arrived at notionally, in terms of Rule 7 of the CCS (Revised Pay) Rules, 2016, as if the pensioner had retired under the revised pay structure, and Order 4(b)(ii) is then applied to that notional figure.

The ignorable part of pension: Rs. 15,000 since 1 January 2016

The ignorable part of pension for a commissioned service officer of the Defence Forces or a civilian pensioner who held a Group A post, and who retired before attaining the age of 55 years, is Rs. 15,000. Paragraph 5 of DoPT Office Memorandum No. 3/3/2016-Estt.(Pay II) dated 1 May 2017 fixed it: “The President is also pleased to enhance the ignorable part of pension from Rs. 4000/- to Rs. 15,000/- (Rupees Fifteen Thousand) in the case of Commissioned Service Officers and Civil Officers holding Group ‘A’ posts who retire before attaining the age of 55 years.” Paragraph 12 gives the order effect from 1 January 2016, and paragraph 5 itself applies the new limit to pensioners re-employed on or after that date.

The two orders in that table disagree about the middle of the series. The 2008 Office Memorandum records the enhancement as being “from Rs. 1500/- to Rs. 4000/-”, while the comparison table in the 5 April 2010 Office Memorandum prints the pre-existing provision as the first Rs. 500 with a footnote that it was “already revised to Rs. 4000/- vide O.M. No. 3/13/2008-Estt. (Pay II) dated 11th November, 2008”. The operative figures at each end of the series are not in doubt, and the current one is Rs. 15,000.

The Rs. 15,000 is a government decision taken in the Office Memorandum, not a recommendation of the 7th Central Pay Commission. The Commission was asked to move in the opposite direction and refused. At paragraph 6.2.38 the Services sought that the ignorable portion of pension be made admissible to re-employed Brigadiers, who retire on completing 56 years of age and therefore fall outside Order 4(d). At paragraph 6.2.39 the Commission answered that the orders governing persons re-employed in government service are uniformly applicable to civil as well as Defence personnel, and that it did not agree with a relaxation sought for only one category of re-employed Defence service officers.

Pension and pre-retirement pay as the 1986 Orders define them

Order 3(1) defines pension for these Orders far more widely than the monthly pension a bank credits. It means the gross monthly pension, the pension equivalent of the death-cum-retirement gratuity, the pension equivalent of gratuity or of the government’s contribution to a contributory provident fund, and any other retirement benefit payable under the CCS (Pension) Rules or the corresponding rules of the body under which the pensioner served. Where the pension has been commuted partly or fully, pension for this purpose means the gross pension before commutation, so commuting a share of the pension does not reduce the deduction from the re-employed pay by a rupee.

Order 3(2) defines pre-retirement pay as the substantive pay last drawn before retirement, and then qualifies it through nine clauses that decide most disputed cases. Officiating pay counts only where the officer officiated continuously for at least ten months on the date of retirement, or was appointed to the post on a regular basis under the recruitment rules. Special pay under FR 9(25) counts on the same ten-month test. Pay drawn for holding more than one charge under FR 49 does not count at all. The part of a deputation (duty) allowance that was drawn continuously for at least ten months and was taken into account for pension counts. Pay in a tenure post counts if drawn continuously for the ten months immediately before retirement.

Two clauses handle absence at the end of a career. Leave preparatory to retirement and foreign service in the last ten months count towards the ten months, on a certificate that the officer would have officiated but for the leave or the foreign service. An increment accruing in the substantive appointment during earned leave up to 120 days counts, but a promotion the officer would have received but for going on leave does not. For an officer who retires while on foreign service, the pay that would have been drawn in the parent cadre is taken, with regard to the promotion the officer would have received there under FR 113.

Personal pay granted for loss of substantive pay, or as a special increment for promoting small family norms, counts irrespective of the ten months, because it stands on the same footing as substantive pay. Every other kind of personal pay is treated like officiating pay. For a retired JCO, NCO or other rank the Order prints an emoluments table of the items that constitute pre-retirement pay, rank by rank across the Army, Navy and Air Force. For a medical officer, non-practising allowance drawn in the last employment counts towards pre-retirement pay only if the allowance is admissible in the re-employed post; where no such allowance was drawn before but the civil post carries one, it is drawn separately after the pay is fixed.

Worked examples of the three routes

The three examples below use cells of the pay matrix notified in Part A of the First Schedule to the CCS (Revised Pay) Rules, 2016, as amended by G.S.R. 592(E) dated 15 June 2017. They are salary-calculator.in computations from the Order 4 text, not figures reproduced from any order.

A civilian Group C pensioner who retired at 52. A pensioner who held a Group C post, retired on voluntary retirement at 52 and draws a pension of Rs. 21,000 is re-employed in a post in Level 6. Order 4(d)(i) ignores the entire pension. Order 4(b)(i) fixes the initial pay at the first cell of Level 6, Rs. 35,400. Nothing is deducted. The pensioner draws Rs. 35,400 as basic pay with dearness allowance on it, and Rs. 21,000 as pension. Because the pension was fully ignored, the pay was fixed at the minimum of the level and the post held was not Group A, this is also the case in which the proviso to Rule 52(2) of the CCS (Pension) Rules, 2021 restores dearness relief on the pension, provided the minimum of Level 6 is lower than the pre-retirement pay and the employing organisation certifies all three conditions.

A Group A officer who retired at 53. An officer who held a Group A post in Level 13, retired on voluntary retirement at 53 with a last basic pay of Rs. 1,23,100 and draws a pension of Rs. 61,550, is re-employed in a post in Level 12. Order 4(d)(ii) ignores the first Rs. 15,000 of the pension. Order 4(b)(ii) looks for the stage Rs. 1,23,100 in Level 12 and does not find one, because Level 12 runs Rs. 1,22,900 then Rs. 1,26,600, so the second limb fixes the initial basic pay at the stage next above, Rs. 1,26,600. The non-ignorable pension is Rs. 61,550 less Rs. 15,000, or Rs. 46,550. Pay drawn is Rs. 1,26,600 less Rs. 46,550, or Rs. 80,050, and the pension of Rs. 61,550 is drawn separately. Pay plus gross pension is Rs. 1,88,150, inside the Rs. 2,25,000 ceiling.

A pensioner who retired on superannuation at 60. A pensioner who retired from a post in Level 11 with a last basic pay of Rs. 88,400 and draws a pension of Rs. 44,200 is re-employed in a post in the same level. Retirement at 60 puts the case outside Order 4(d), so paragraph 8(iv) of the Office Memorandum dated 1 May 2017 applies: the last pay drawn is reckoned, the initial basic pay is Rs. 88,400, and the entire pension of Rs. 44,200 is deducted. Pay drawn is Rs. 44,200, alongside the pension of Rs. 44,200. This is the common case, and it is the one most often stated incorrectly, because the Rs. 15,000 concession is quoted without the age condition that limits it.

Dearness allowance in each example runs on the pay before the deduction, under Order 11, and not on the reduced figure actually paid as salary.

Scope of the 1986 Orders and the excluded categories

Order 2 applies the 1986 Orders to all persons re-employed in civil services and posts in connection with the affairs of the Union after retirement on pension, gratuity or contributory provident fund benefits, whether the earlier service was under the Union Government including Railways, Defence and Posts and Telegraphs, a State Government, a Union Territory administration, a public sector undertaking, a local body, an autonomous body such as a university, or a semi-government organisation. Order 2(2) extends them to persons re-employed in a regular work-charged capacity, and Order 2(3) to persons re-employed on contract basis unless otherwise provided.

Five categories are excluded by Order 2. A person re-employed after resignation, removal or dismissal who received no retirement or terminal benefits for the earlier service is outside the Orders, and so is a person re-employed in a post whose expenditure is not debitable to the civil estimates of the Union Government, a person paid from contingencies, a person on casual, daily-rated or part-time employment, and a person appointed as a consultant on a consolidated fee or a retired judge of the Supreme Court or a High Court appointed to a commission or committee, both of whom are governed by separate orders.

The 2017 extension of the revised pay structure is narrower than the 1986 Orders in two respects. Paragraph 1 of the Office Memorandum dated 1 May 2017 covers government servants re-employed in central civil departments “other than those employed on contract except where the contract provides otherwise”, whether they retired with or without a pension, gratuity or contributory fund benefit, from a civil post or from the Armed Forces. Paragraph 10 confines the instructions to re-employment against civil posts carrying pay up to Level 17 of the pay matrix. The extension was needed because Rule 2(2)(vii) of the CCS (Revised Pay) Rules, 2016 excludes persons re-employed in government service after retirement from those Rules altogether, and the Office Memorandum applies them in partial modification of that exclusion.

An option and an undertaking attach to the extension. Paragraph 2 requires a re-employed person who becomes eligible to elect the revised pay structure to exercise the option in the manner laid down in Rules 5 and 6 of the CCS (Revised Pay) Rules, 2016 within three months. Paragraph 9 requires an undertaking that the dispensation is subject to deduction of pension as admissible from time to time, in the form annexed to the Office Memorandum.

Increments, allowances and the pay they are computed on

Increments in the re-employed post run on the pay as fixed before the pension is deducted. Order 5 of the 1986 Orders allows the re-employed pensioner to draw normal increments in the time scale of the post “as if the pay had been fixed at the minimum or the higher stage as the case may be”, that is, before the adjustment on account of pension. Paragraph 8(i) of the Office Memorandum dated 1 May 2017 carries this into the matrix: increments are drawn under Rules 9 and 10 of the CCS (Revised Pay) Rules, 2016 read with Order 5, so a re-employed pensioner moves one cell down the level on the applicable increment date like any other holder of the post.

Order 11 governs every allowance. Allowances and other benefits based on pay are regulated with reference to the pay fixed on re-employment, and the pay for that purpose “will be the pay fixed before deducting the non-ignorable part of the pension and pension equivalent of the other retirement benefits”. House rent allowance, transport allowance and dearness allowance therefore all run on the undeducted figure, which is the most valuable feature of the Order 4(b)(ii) route.

Order 9 deals with a move during the re-employed spell. On regular promotion or transfer to another post, the pay of the re-employed pensioner is fixed under the Fundamental Rules with reference to the pay in the previous re-employment post before adjustment, and the deduction on account of pension continues to the same extent as before.

Dearness allowance on the re-employed pay and dearness relief on the pension

Dearness allowance is drawn on the pay fixed in the level of the re-employed post, exactly as for a serving employee, and is computed on the pay before the pension is deducted under Order 11. Dearness relief on the pension stops for the same period.

Rule 52(2) of the CCS (Pension) Rules, 2021 bars dearness relief on pension for the period during which a pensioner is re-employed or permanently absorbed under the Central Government or a State Government, or under a corporation, company, body or bank owned or controlled by them, in India or abroad. The proviso restores it only where all three of its conditions are satisfied: the pensioner did not hold a post classified as Group A before retirement, pay in the re-employed post was fixed at the minimum of the scale or level of that post and that minimum is lower than the pre-retirement pay, and the entire pension was ignored in fixing that pay. Rule 52(3) puts the burden of proof on the pensioner, who draws the relief on a certificate from the employing organisation confirming each condition, and the pension disbursing bank may withhold the relief until it has that certificate. Rule 52(4) exempts an employed family pensioner from the bar altogether.

The three conditions map exactly onto the Order 4(b)(i) route and onto no other. A pensioner whose pension was fully ignored, and whose pay was consequently fixed at the first cell of the level, is the only one who can satisfy them.

Leave, leave encashment and provident fund during re-employment

Leave during re-employment is governed by the ordinary rules. Order 13 of the 1986 Orders provides that the CCS (Leave) Rules, 1972 apply to persons re-employed after retirement, so earned leave and half pay leave accrue in the re-employed post on the usual terms.

Leave encashment at the end of the spell uses the undeducted pay. Rule 39(6)(a)(iii) of the CCS (Leave) Rules, 1972 grants a re-employed pensioner, on termination of the re-employment, the cash equivalent of earned leave and half pay leave at credit on that date, subject to a maximum of 300 days including the period for which encashment was already allowed at the time of retirement. Rule 39(6)(b) fixes the base as the pay fixed in the scale of the post of re-employment before adjustment of pension and the pension equivalent of other retirement benefits, with the dearness allowance appropriate to that pay, which matches Rule 40(7)(c) for leave salary during re-employment. The 300-day ceiling is cumulative, so a pensioner who encashed the full 300 days on superannuation encashes nothing at the end of the re-employed spell.

Order 12 allows a re-employed officer to contribute to the contributory provident fund, with the government’s contribution and interest credited only after one year of re-employed service where the term was initially for a year or less and was later extended beyond it. Where the period exceeds one year, the government contribution with interest is payable for the entire period of contribution.

Pension and gratuity for the re-employed period

Re-employed service earns no second pension. Rule 6 of the CCS (Pension) Rules, 2021 provides that a government servant cannot earn two pensions in the same service or post at the same time or by the same continuous service, and that a pensioner re-employed after retiring on a superannuation, retiring or compulsory retirement pension, or while drawing a compassionate allowance, is not entitled to a separate pension or gratuity for the period of re-employment. Order 14 of the 1986 Orders says the same for gratuity: a re-employed officer is not eligible for any gratuity or death-cum-retirement gratuity for the period of re-employment, except in the cases covered by the counting-of-service rules.

The exception is the pensioner who left on a compensation pension or an invalid pension. Order 6 of the 1986 Orders offers such a pensioner, where the re-employment is in qualifying service, a choice between retaining the pension, in which case the former service does not count for a future pension, and ceasing to draw any part of the pension so that the previous service counts. Pension already drawn need not be refunded, and a pensioner who elects to count the previous service by giving up the entire pension including the death-cum-retirement gratuity has pay fixed as if no pension were being drawn. Rule 19(1) of the CCS (Pension) Rules, 2021 is the surviving statutory form of that option, and it is confined to a servant re-employed and appointed on or before 31 December 2003.

Provisional pay before the pension is sanctioned

Order 10 handles the ordinary case in which the re-employment starts before the pension has been finally determined. Pay may be paid provisionally for a maximum of six months, worked out after taking into account the maximum pension and gratuity that might be admissible on the basis of the last pay drawn, with the pension equivalent of gratuity taken from the table in the CCS (Commutation of Pension) Rules. The sanctioning authority is responsible for ensuring that the provisional pay does not exceed the pay that will finally become admissible, and an undertaking to refund any overpayment is taken from the pensioner.

Order 10(ii) provides an alternative for cases where it is considered desirable: the full pay of the post is paid provisionally, inclusive of the pension but excluding an approximate amount of the pension equivalent of gratuity or of the employer’s share of the contributory provident fund, against an agreement in the form at Annexure I and a monthly acceptance in the form at Annexure II. When the pension is finally sanctioned the pay is refixed under the Orders, no fresh claim to pensionary benefits arises for the provisional period, and the actual pension equivalent of gratuity is adjusted against the gratuity. Order 10(iii) confines the second route to civil retired central government employees re-employed in central civil departments, so a Defence, Railway or State Government retiree cannot use it.

Ex-combatant clerks, short service officers, reservists and retrenched employees

Four categories are fixed outside the Order 4 ladder, and the 1986 Orders deal with each in its own order.

Order 16 gives ex-combatant clerks re-employed as lower division or junior clerks, and ex-storemen re-employed as storemen, an option to be fixed instead by counting armed forces service as equivalent civil service. Service as a combatant clerk or storeman is treated as service as a lower division clerk, junior clerk or storeman irrespective of the pay drawn in the armed forces, the initial pay is fixed at the stage that would have been reached by that service, and the pay so fixed is not restricted to the pre-retirement pay. The fixation is done by invoking Fundamental Rule 27. The option must be exercised within three months of re-employment and is final once exercised. The Order as printed in 1986 ignores only Rs. 15 of the pension in this route, and the residue is deducted, with pay stepping up by one increment a year until the minimum of the scale is reached where the deduction takes it below.

Order 8 allows emergency commissioned officers and short service commissioned officers who joined pre-commissioned training or were commissioned after 10 January 1968, on appointment to unreserved vacancies, advance increments equal to the completed years of armed forces service, subject to the pay not exceeding the basic pay last drawn in the armed forces. Order 15 gives the same advance-increment treatment to ex-servicemen and civilians retrenched from service who were granted no pension or service gratuity. Order 7 covers military reservists who continue in the same civil post held during the reserve period, who keep the rate of pay drawn on the date of transfer to the military pension establishment in addition to the pension, subject to the ceiling stated there.

Re-employment compared with deputation and contract engagement

Re-employment, deputation and contract engagement are three different things, and the pay treatment separates them cleanly.

The distinction from an ordinary pay fixation on promotion is sharper still, because that concerns a serving employee moving up under Rule 13 of the CCS (Revised Pay) Rules, 2016, with none of the Order 4 machinery in play. A pensioner engaged as a consultant on a consolidated fee is outside the 1986 Orders altogether under Order 2, so no part of the pension is deducted from the fee.

Amendment history of the 1986 Orders

The 1986 Orders have been revised once for each pay commission since, and Order 4 is the part that changes each time.

The 5 April 2010 Office Memorandum is the one most often misdescribed. It substituted the direct-recruit entry pay into Order 4(b)(i), the fully-ignored case, and left Order 4(b)(ii) fixing pay at the same stage as the last basic pay drawn before retirement, with the grade pay of the re-employed post and a cap of that grade pay plus Rs. 67,000. The last-pay-drawn route was never abolished. The 2017 substitution rewrote it for the matrix and kept it.

The 8th Central Pay Commission and re-employed pensioners

Nothing in the 1986 Orders has been changed by the 8th Central Pay Commission, which has issued no report. The Commission was constituted by Resolution F. No. 01/01/2025-E.III(A) of the Department of Expenditure, Ministry of Finance, dated 3 November 2025, published in the Gazette of India Extraordinary, Part I Section 1, with Justice Ranjana Prakash Desai as Chairperson, Professor Pulak Ghosh as Part-Time Member and Shri Pankaj Jain as Member-Secretary. Paragraph 5 of the Resolution gives the Commission 18 months from the date of its constitution to make its recommendations, and the terms of reference do not mention re-employed pensioners.

Until a report is submitted, accepted and implemented by an order amending Order 4, the figures in this article stand: the first cell of the level under Rule 8, the last basic pay stage under Order 4(b)(ii), Rs. 15,000 ignorable, and Rs. 2,25,000 as the ceiling on pay plus gross pension.

Related Articles

• Central government pension
• Re-employment after retirement
• Re-employed pensioner taxation
• Post-retirement commercial employment
• Pay fixation
• Pay fixation on promotion
• Pay protection
• Pay matrix
• Entry pay
• Annual increment
• Date of next increment
• Fundamental Rule 22
• Fundamental Rule 27
• Fundamental Rules
• CCS (Revised Pay) Rules, 2016
• CCS (Pension) Rules, 2021
• CCS (Leave) Rules, 1972
• Fitment factor
• Military service pay
• Defence pay matrix
• One Rank One Pension
• Deputation in central government
• Deputation allowance
• Foreign service
• Dearness allowance
• Dearness relief
• House rent allowance
• Transport allowance
• Pension calculation
• Commutation of pension
• Qualifying service
• Compensation pension
• Invalid pension
• Compassionate allowance
• Gratuity in central government
• Leave encashment
• Earned leave
• Half pay leave
• Voluntary retirement
• Premature retirement
• Retirement age in central government
• Superannuation
• PPO and life certificate
• Family pension calculation
• Income tax for pensioners
• 7th Central Pay Commission
• 8th Central Pay Commission
• Department of Personnel and Training
• Central government employees in India

External references

• CCS (Fixation of Pay of Re-employed Pensioners) Orders, 1986, full text
• DoPT Office Memorandum No. 3/1/85-Estt.(Pay II) dated 31 July 1986
• DoPT Office Memorandum No. 3/13/2008-Estt.(Pay II) dated 11 November 2008
• DoPT Office Memorandum No. 3/19/2009-Estt.(Pay II) dated 5 April 2010
• DoPT Office Memorandum No. 3/3/2016-Estt.(Pay II) dated 1 May 2017
• 8th Central Pay Commission Resolution dated 3 November 2025
• Department of Personnel and Training
• Department of Ex-Servicemen Welfare

References

1. Central Civil Services (Fixation of Pay of Re-employed Pensioners) Orders, 1986, issued by the Department of Personnel and Training, Office Memorandum No. 3/1/85-Estt.(Pay II) dated 31 July 1986, in supersession of the earlier orders on the subject and applying to appointments made on or after 1 July 1986. Order 2 (application and exclusions), Order 3(1) (definition of pension), Order 3(2) (definition of pre-retirement pay), Order 4 (fixation), Order 5 (increments), Order 6 (invalid and compensation pensioners), Orders 7, 8, 15 and 16 (special categories), Order 9 (promotion and transfer), Order 10 (provisional pay), Order 11 (allowances), Order 12 (contributory provident fund), Order 13 (leave), Order 14 (gratuity).
2. Department of Personnel and Training, Office Memorandum No. 3/13/2008-Estt.(Pay II) dated 11 November 2008, paragraph 5 (pay plus gross pension ceiling raised from Rs. 26,000 to Rs. 80,000) and paragraph 6 (ignorable part of pension raised to Rs. 4,000 for commissioned service officers and civil officers holding Group A posts who retire before attaining the age of 55 years).
3. Department of Personnel and Training, Office Memorandum No. 3/19/2009-Estt.(Pay II) dated 5 April 2010, substituting Orders 4(a), 4(b)(i), 4(b)(ii) and 4(d)(ii) of the 1986 Orders for the pay bands and grade pay of the CCS (Revised Pay) Rules, 2008.
4. Department of Personnel and Training, Office Memorandum No. 3/3/2016-Estt.(Pay II) dated 1 May 2017: paragraph 1 (extension in partial modification of Rule 2(2)(vii) of the CCS (Revised Pay) Rules, 2016), paragraph 2 (option under Rules 5 and 6), paragraph 4 (ceiling of Rs. 2,25,000), paragraph 5 (ignorable pension of Rs. 15,000), paragraph 7 (substituted text of Orders 4(a), 4(b)(i), 4(b)(ii) and 4(d)), paragraph 8 (increments, Military Service Pay, pre-2016 retirees, and the residual pay minus pension rule), paragraph 9 (undertaking), paragraph 10 (Level 17 limit) and paragraph 12 (effect from 1 January 2016).
5. Central Civil Services (Revised Pay) Rules, 2016, gazette notification dated 25 July 2016: Rule 2(2)(vii) (exclusion of re-employed persons), Rule 7 (fixation on the changeover), Rule 8 (fixation of pay of direct recruits at the first cell of the level), Rules 9 and 10 (increments), and Part A of the First Schedule (pay matrix), as amended by the CCS (Revised Pay) (Amendment) Rules, 2017, G.S.R. 592(E) dated 15 June 2017.
6. Central Civil Services (Pension) Rules, 2021, notified as G.S.R. 868(E) on 20 December 2021: Rule 6 (limit on the number of pensions), Rule 19(1) (counting of pre-retirement civil service for a re-employed servant) and Rule 52 (dearness relief, the re-employment bar in sub-rule (2), the certificate in sub-rule (3) and the family pension exemption in sub-rule (4)).
7. Central Civil Services (Leave) Rules, 1972: Rule 39(6)(a)(iii) (cash equivalent on termination of re-employment, subject to 300 days including what was encashed at retirement), Rule 39(6)(b) (pay before adjustment of pension as the base) and Rule 40(7)(c) (leave salary during re-employment).
8. Report of the Seventh Central Pay Commission, submitted 19 November 2015: paragraph 6.2.37 (the pay minus pension principle and full deduction on superannuation), paragraph 6.2.38 (the Services’ demand for re-employed Brigadiers) and paragraph 6.2.39 (the Commission’s rejection of it).
9. Ministry of Finance, Department of Expenditure, Resolution F. No. 01/01/2025-E.III(A) dated 3 November 2025 constituting the 8th Central Pay Commission, published in the Gazette of India Extraordinary, Part I Section 1.