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The notional increment refers to an increment that is not actually paid during service but is considered solely for calculating pension benefits. This ensures pension calculations reflect the increment employees would have received if they had continued in service beyond June 30 or December 31.
Central government employees who retire or have retired on June 30 or December 31, on or after January 1, 2006, and who meet the qualifying conditions of good conduct and satisfactory performance, are eligible for the notional increment. This is based on DoPT’s Office Memorandum dated February 20, 2025.
The Department of Personnel and Training (DoPT) clarified that notional increments granted on July 1 or January 1 to employees retiring on June 30 or December 31 respectively, will be counted only for pension calculation and not for other pensionary benefits.
The actual increase in pension due to the notional increment started from May 1, 2023, for all eligible pensioners who retired on or before April 30, 2023. Those with existing court orders will have their pensions adjusted as per those specific orders.
For retired employees who have filed applications such as intervention, impleadment, writ petitions, or original applications before tribunals or courts, the enhanced pension including one increment will be payable for the three years prior to the filing of such applications.
Any contradictory orders from lower courts that conflict with the Supreme Court’s February 20, 2025 decision or violate DoPT conditions will be challenged in higher courts to maintain uniformity in pension calculations.
Cases that have already been implemented under earlier orders are not required to be re-opened, as per the Department of Posts order issued on July 17, 2025.
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