Pension and 8th Pay Commission: Law, assurances, and unsettling reality

In recent weeks, several media reports have highlighted statements made in Parliament, suggesting that the 8^th Central Pay Commission (CPC) will “take care of the interests of pensioners.” On December 2, 2025, the Finance Ministry clarified in the Rajya Sabha that pension is not excluded from the 8th CPC’s purview. Minister of State for Finance Pankaj Chaudhary stated that the Commission “will make its recommendations on various issues – pay, allowances, pension, etc.”

While these assurances provide comfort at a superficial level, it is important to disentangle political statements from the hard letter of the law, especially when statutory provisions and notified Terms of Reference (ToR) are already in force.

1. The Validation Act: A Statutory Reality that Overrides Statements and AssurancesThe Finance Act, 2025 introduced a “Validation Act” relating to CCS (Pension) Rules, retrospectively validating differential treatment of pensioners based on date of retirement despite earlier judicial pronouncements striking down such classifications. Since it is a duly enacted law, it overrides verbal or general statements made on the floor of the House unless the law is subsequently amended.

Being a statute enacted by Parliament, it has overriding force. No verbal assurance, however well-intentioned, can amend or dilute a statute. Only a formal amendment to the Act or the Rules can change the legal position.

Courts have repeatedly held that legislatures cannot nullify binding judgments by inserting retrospective ‘validation’ clauses that fail to cure the defects identified by the court. Such an exercise violates core constitutional principles of rule of law and separation of powers.

2. The 8^th CPC Terms of Reference: No Mention of Pensioners

The ToR notified on 3 November 2025 are unambiguous and explicitly restrict the Commission’s mandate to Central Government employees. Nowhere do they mention existing pensioners or family pensioners.

Our concern arises from the use of the phrase “unfunded cost of non-contributory pension schemes” in Para (e)(ii) of the ToR, which says “To review the Death-cum-Retirement Gratuity and pensions of employees not borne on the National Pension System (including Unified Pension Scheme) and make recommendations thereon keeping in view Para f(iii) below”. Para f(iii) says: “To make recommendations on the above, keeping in view: The unfunded cost of non-contributory pension schemes”.

As the law stands today, therefore:

• The 8th CPC recommendations apply only to employees who retire on or after 1 January 2026.
• Pre-2026 pensioners are outside the scope unless the ToR are formally amended.

Parliamentary statements cannot substitute a Gazette notification.

3. Troubling Terminology: “Unfunded Cost of Non-Contributory Pension Schemes”

Para (e)(ii) and (f)(iii) of the ToR require the 8^th CPC to review pensions of employees not borne on NPS/UPS “keeping in view the unfunded cost of non-contributory pension schemes.”

This terminology is unprecedented and problematic:

• It equates constitutionally protected pension rights with fiscal burdens, a departure from the humane and welfare-oriented approach of the Govt. in all earlier Pay Commissions.
• It implies that only money contributions during service create “funding,” ignoring the lifetime of service, risk, sacrifice and national duty that constitute the real contribution of government servants. Pensioners apprehend that the Govt is (obliquely) mandating the 8^th CPC to weed out “all unfunded expenditure”.
• Crucially, no such terminology has been used for pensions of MPs, MLAs, or Judges though all are non-contributory and drawn from the Consolidated Fund of India

4. Judicial Principles: Pension is a Right, Not a Fiscal Charity

The Supreme Court has consistently held:

• Pension is a property right and a deferred wage, not a bounty (Deokinandan Prasad v. State of Bihar, 1971).
• Pensioners belonging to the same class cannot be discriminated on the basis of date of retirement (D.S. Nakara v. Union of India, 1983).
• Arbitrary classifications and uneven treatment of pensioners violate Article 14.

Later judgments reiterate that the State cannot create unreasonable cut-off dates to disadvantage a section of pensioners. Seen in this light, describing pension as an “unfunded cost” runs contrary to both constitutional morality and judicial doctrine.

5. Required Amendments: Inclusion of Pensioners and Removal of Objectionable Terminology

To restore balance and protect pensioners’ rights, the ToR must be amended to:

1. Explicitly include existing pensioners and family pensioners.
2. Delete the phrase “unfunded cost of non-contributory pension schemes.”

A suitable revised wording could be:

“To review the pensionary benefits of existing pensioners, family pensioners, and current employees under the Central Government, autonomous bodies and other entities not borne on the National Pension System (including the Unified Pension Scheme), and to make recommendations thereon keeping in view the likely financial impact on the Union and State Governments.”

Such clarity would align the ToR with constitutional principles, judicial precedents, and long-standing governmental practice.

6. Challenge to the Validation Act in the Supreme Court

The Forum of Retired IPS Officers (FORIPSO) and other associations have challenged Part IV of the Finance Act, 2025 before the Supreme Court. The Court has issued notices to the Department of Pension, DoPT and other Ministries, tagging the similar cases for hearing in January, 2026. FORIPSO’s petition argues that:

• The Validation Act attempts to revive provisions earlier rejected by courts. It is trite law that the legislature cannot override or nullify a binding judicial pronouncement by inserting a retrospective provision which validates the provision that failed to cure the very defect the court identified.
• It unlawfully creates two classes of pensioners, violating Article 14.
• A legislature cannot override judicial decisions without curing the underlying defects.

It also seeks enforcement of the Delhi High Court’s judgment of 20.03.2024 (affirmed by the Supreme Court on 04.10.2024) and payment of arrears from 2006 with interest. The outcome of this challenge will have a direct bearing on pensioners’ rights under the 8^th CPC.

7. Conclusion: Law, Not Assurances, Determines Pensioners’ Rights

The ToR of the 8^th CPC flow directly from the Validation Act, 2025. Unless:

1. the Validation Act is amended or struck down, and
2. the ToR are formally revised,

no verbal assurances in Parliament, however sympathetic, can alter the legal position. A statement made during a debate or in answer to a question does not amend a statute. Under parliamentary practice, only a notified amendment to the Act or the Rules can alter the legal position. Until that is done, the enacted law continues to apply as it stands.

Pensioners’ concerns are therefore founded on legal reality, not pessimism. Only a statutory amendment or a judicial pronouncement can ensure fair and equal treatment of all pensioners under the 8^th Central Pay Commission.