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8th Pay Commission: Pensioners Push For New Formula To Fix Fitment Factor

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Even as the 8th Central Pay Commission (CPC) has begun its work, employees’ and pensioners’ groups have started pitching suggestions on the fitment factor the panel should adopt.

While the FNPO has proposed a fitment factor of 3, a 2025 report had indicated that it could fall in the range of 1.82 to 2.46.

Final Decision Awaited

The final fitment factor will be known only after the 8th CPC submits its report to the government. In the meantime, a pensioners’ body has suggested a new approach to its calculation.

The proposal has been submitted by the Railway Senior Citizens Welfare Society (RSCWS) in response to the pay panel’s questionnaire.

Proposal For Hybrid Calculation Model

In its submission dated March 14, 2026, the RSCWS recommended that the 8th CPC adopt a hybrid system for calculating the fitment factor.

“The fitment factor should aim at restoring real income lost due to inflation and structural distortions. For pensioners, a uniform and adequate fitment factor must be applied to ensure meaningful enhancement in basic pension,” the body said.

It proposed combining Dr. Wallace Aykroyd’s formula, as used in the 7th CPC, with the constant relative income approach followed by the 5th CPC.

Key Factors To Be Included

The pensioners’ body suggested that the calculation should account for a broader set of consumption expenses, including:

Regular consumable items
Internet charges
Health insurance premiums
It also recommended that a family unit of four be considered while determining the fitment factor.

Response To CPC Questionnaire

The suggestions were made in response to one of the 18 questions raised by the 8th CPC, which sought views on what the fitment factor should represent.

The question highlighted that government salaries include components such as increments for service length, dearness allowance for inflation, and pay scales linked to seniority and merit.

Additional Recommendations

The RSCWS further proposed:

Inclusion of healthcare inflation, digital connectivity costs, and insurance premiums
Consideration of multiple fitment factors for different levels
Ensuring parity in pension revision

Reference To 7th CPC Model

The 7th CPC had based its recommendations on the Aykroyd formula, which reflects the average cost of living by factoring in price changes in a standard consumption basket, periodically reviewed by the Labour Bureau in Shimla.

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