In a landmark situation, the DoPT has issued an important clarification that, in effect, awards the benefits of notional increments to those retiring from the central government services on the last day of a month. This now much-awaited decision accords some relief to thousands of employees who retire one day before they would have become entitled for their next increment-generally those who retire on June 30 or December 31.
What Is Notional Increment?
The term notional increment is given to the fictitious or are meant theoretically granted increments for pensionary purposes where the employee has not fulfilled the rigid requirement of staying for the next annual increment. They would have become the great missing link for those who retire just one day before their expected date of annual increment.
Suppose an employee retires on June 30; he misses the increment due on July 1, which is adverse in calculating his pension. Notionally, however, the increment will be granted to such employees so that it would be the basis of pension as well as gratuity payments.
Background And Court Rulings
This has been a matter of debate and litigation over the years. Several retired government employees had moved various high courts and even the Supreme Court, contending that denial of increments because they had retired just one day before was unjust. The courts ruled in favor of the retirees, emphasizing the idea of natural justice. Following the rulings, the DoPT has now given formal recognition and implementation to the change.
Who Benefits?
This decision is likely to benefit:
- Central government employees retiring one day before their annual increment
- Pensioners seeking revision of their pension on account of notional increment
- Employees covered under the Central Civil Services (Pension) Rules, 1972 and CCS (Revised Pay) Rules
Effect On Pension Calculations
Notional increment inclusion will mean:
- Increase in the basic pension
- Increase in the amount of gratuity
- Increased family pension in the event of an employee’s death
It gives an equitable retirement benefit set-up and also curtails the purchase of litigations by aggrieved employees nearing retirement.
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