Monthly Pension Calculations: Monthly pension is an important source of income for state and central government employees post retirement.

Most of them follow New Pension System (NPS), a lot of them follow Old Pension Scheme (OPS), while they will also have the option to pick Unified Pension Scheme (UPS) from April 1, 2025.

As far as the employees following OPS are concerned, their starting monthly pension is calculated on the basis of their average basic pay of 10 months prior to superannuation.

OPS also has the provision of the family pension if the pensioner dies.

But basic pay is not the only pension that they get after retirement.

Along with that, they also get dearness relief (DR). So what will be the estimated total pension if one has a basic pension of Rs 20,000, Rs 35,000, Rs 50,000, Rs 65,000, or Rs 80,000?

In the 7th Pay Commission, the minimum basic pension is Rs 9,000, while the maximum is Rs 1,25,000. These ranges are based on a fitment factor of 2.57.

How total pension for pensioner is decided

Pensioners get dearness relief (DR) along with their basic pension. The sum of both is their total pension amount. 

Why is DR given to pensioners?

The basic pension for a pensioner remains the same throughout the pay commission, which has a 10-year duration.

But during these years, inflation will rise. So, DR is given to employees to adjust the pension amount to the rising cost of things.

How is DR decided?

The labour bureau calculates DR on the basis of the All India Consumer Price Index- Industrial Workers (AICPA-IW).

The index represents the rising inflation.

The central government revises the DR limit every 6 months.

What is current DR rate?

The current DR rate is 53 per cent, which was declared in the second half of the previous year. The government is yet to revise DR this year. 

What happens to DR when new pay commission is implemented

DR merges with the basic pension, and the sum becomes the new basic pension for the new pay commission.

Total pension for pensioner with Rs 20,000 basic pension 

The total estimated pension will be Rs 30,600.

Total pension for pensioner with Rs 35,000 basic pension 

The total estimated pension will be Rs 53,850.

Total pension for pensioner with Rs 50,000 basic pension 

The total estimated pension will be Rs 76,500.

Total pension for pensioner with Rs 65,000 basic pension 

The total estimated pension will be Rs 99,450.

Total pension for pensioner with Rs 80,000 basic pension 

The total estimated pension will be Rs 1,24,000.