The amendment to Rule 37 of the CCS (Pension) Rules, 2021 has led to massive speculations on retired government employees losing benefits of DA hike and pay commission benefits. Here's the actual explanation of the amendment, you need to know.
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Has the Center has decided to eliminate important post-retirement perks for retired government employees? Reports circulating in several media assert that under the new rules, pensioners will no longer get dearness allowance hikes or benefits from future pay commissions, including the 8th Pay Commission. According to the reports, the regulation changes are being brought due to the Finance Act 2025.
There is an amendment to Rule 37 of the CCS (Pension) Rules, 2021. The Department of Pension and Pensioners’ Welfare has introduced an amendment to Rule 37(29)(c). The amended Rule 37(29)(c) states, "… the dismissal or removal from service of the public sector undertaking of any employee after his absorption in such undertaking for any subsequent misconduct shall lead to forfeiture of the retirement benefits for the service rendered under the Government also and in the event of his dismissal or removal or retrenchment the decision of the undertaking shall be subject to review by the Ministry administratively concerned with the undertaking.”
According to the amended Rule 37(29)(c) if a PSU employee who previously worked for the government is fired for wrongdoing, all of his retirement benefits may be forfeited. A pension from his prior government service is one of these benefits. This represents a significant change from the previous regulation, rule stated that pension payments from past government employment should not be impacted by termination from a PSU.
Examining the allegations of the reports that the new rules in the Finance Act 2025 are depriving retirees of their pension and other retirement benefits, it becomes clear that the modification of Rule 37 has nothing to do with pay commission benefits or dearness allowance.
Therefore, the claims that say that dearness allowance hikes and Pay Commission benefits have been removed for retired government employees and linking this amendment to the Finance Act are NOT TRUE. The only pertinent rule change concerns PSU employees who were dismissed for misconduct and absorbed from the government service.
It is important to note that the government has not issued any official notification or confirmation about any such changes.
When the Finance Bill 2025 was passed in Parliament a controversy was sparked regarding a clause about pensions. The clause, according to employees' unions, was detrimental to retirees and led to a gap between old and new pensioners. To resolve the issue, Finance Minister Nirmala Sitharaman then provided clarification in Parliament. According to her, the clause did not change civil or defense pensions. It only restated rules that have been in place since June 1, 1972.
The Department of Pension & Pensioners’ Welfare also stated that the pension parity introduced by the 7th Central Pay Commission would continue to exist.
The central government had in March announced a 2 percent increase in Dearness Allowance and Dearness Relief for central employees and pensioners. Central government employees were given the hiked salary for March along with arrears for January and February.
The central government employees and pensioners are waiting for the next DA hike update for the July to December 2025 period. The revision is expected to be announced around October or November.
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