The Department of Personnel & Training (DoPT) has given new rules on notional increments on 14th Oct 2024 for determining pensionary benefits of retired central government officials. This has come as several courts and appeals by retired people who want fair pensions formula have been made.
What is the notional increment?
A notional increase is an additional sum that is added for the purpose of pension. It provides for employment benefits for pensioners who retired on June 30 So as to allow them to start receiving an increment form the first of July.
Background of the Decision
As early as the year 2006, an increase is provided for only every July 1. Pursuant to the adjustments in the rationalization program, this rule was again changed in 2016 and decreed that two annual adjustments are possible, the first one on January 1 of the year and the second one on July 1 of the same year.
The setting of the basis for extension of this benefit to retirees by a court order in 2017, followed by subsequent cases and appeals led to the apex court’s judgment of granting notional increments for pension computation in 2023.
New Procedure for Implementation
The DoPT has clarified that this new increment is only for calculation of pension and is not to be considered for any other purpose. The ASO must have completed all the qualifying years of service and must also have followed satisfactory conduct. This guidance is transitional and adapts to permanent guidance expected from November 2024 onwards.
Key Points for Compliance
The DoPT has issued instructions to all related departments to follow these instructions but the same do not apply in other pension related benefits.
