The Union cabinet is set to approve next week a new Rs 5,000-crore pension formula that is expected to benefit more than five million central government employees. Official sources told HT the new formula will calculate pension based on the latest drawn salary for a particular post. The seventh pay commission recommended that pension could be calculated by two methods: One, pension would be 50% of the last salary and multiplied by 2.57. The second was an incremental method where pension was fixed at the last salary drawn with adjustments of increments drawn in that particular pay band. “To avoid legal hurdles, the Ecos came up with the pay fixation method,” explained the senior official.

Source: Hindustan Times April 21, 2017 12:33 UTC