Central govt employees retiring day before annual pay hike date to get notional increment

In a major relief for retiring central government employees, the Department of Personnel and Training (DoPT) has issued a new directive ensuring pension-related benefits for those who exit service a day prior to their scheduled annual increment. Employees retiring on June 30 or December 31 will now be granted a notional increment—a step that rectifies a long-standing grievance over pension calculations for such individuals.

Historically, the Central Civil Services (Revised Pay) Rules, 2006 had fixed July 1 as the sole date for annual pay increments. This was later revised under the 2016 rules, which introduced two increment dates: January 1 and July 1. Despite this, employees retiring on the last day of June or December would miss their pay hike by just one day, a technicality that had a direct impact on their pension.

The issue drew national attention after a 2017 ruling by the Madras High Court, which extended the benefit of a notional increment to a petitioner who retired just before their due raise. Although the DoPT initially limited implementation of the ruling to that specific case, similar disputes began to surface across various legal forums.