Grant Of Increase In Pension To Pensioners Of the Federal Government.

Finance Division Office Memorandum No. 4(1)/REG.6/2026 dated 29 July 2026 conveys approval of a 7% increase on baseline pension with effect from 1 July 2026 for the specified Federal Government pensioners. The memorandum also sets out its application to recent retirees, family pensions and certain other pension categories, while identifying a specific exclusion.

Key Features Of the 2026 Pension Increase

• Increase: 7% of baseline pension.
• Effective date: 1 July 2026.
• Coverage: Civil Pensioners of the Federal Government, including civilians paid from Defence Estimates, retired Armed Forces personnel and Civil Armed Forces personnel.
• The increase is also admissible to pensioners who retired on or after 1 July 2026.
• Family pension under the specified pension schemes and compassionate allowance are also covered, subject to the memorandum.
• The increase is not admissible on Special Additional Pension in lieu of pre-retirement Orderly Allowance or the monetized value of a driver or orderly.

Who Is Eligible For the 7% Increase?

Paragraph 1 extends the increase to all Civil Pensioners of the Federal Government, including civilians paid from Defence Estimates, retired Armed Forces personnel and Civil Armed Forces personnel. The operative basis is the baseline pension determined under the earlier Finance Division instructions referenced in the memorandum.

Paragraph 2 expressly confirms that the 7% increase is also admissible to pensioners who retired on or after 1 July 2026. The memorandum therefore does not limit the increase only to persons who were already retired before that date.

How Is the Increase Calculated?

The rate stated in the memorandum is 7% of baseline pension. It refers to the baseline pension determined under Finance Division O.M. No. 9(3)R-6/2024-403 dated 1 January 2025, read with O.M. No. 4(1)REG.6/2025 dated 7 July 2025 and O.M. No. 4(1)REG.6/2025 dated 5 August 2025.

The 29 July 2026 memorandum does not reproduce the full method for determining every individual pensioner’s baseline. The relevant earlier orders and the pension record maintained by the accounts office should be consulted when checking an individual calculation.

Earlier Pension Increases For Employees Retiring From 1 July 2026

Paragraph 3 states that the 15% increase allowed through Finance Division O.M. No. 4(1)-Reg.6/2022-486 dated 1 July 2022 and the 7% increase allowed through O.M. No. 4(1)REG.6/2025 dated 7 July 2025 remain admissible to Government employees retiring on or after 1 July 2026. The 2026 memorandum thus confirms the continued admissibility of those earlier increases for the stated group.

Application To Family Pension And Other Categories

Paragraph 4 makes the new increase admissible on family pension granted under the Pension-cum-Gratuity Scheme, 1954 and the Liberalized Pension Rules, 1977, as amended from time to time. It also applies to pension sanctioned under the Central Civil Services (Extraordinary Pension) Rules and to Compassionate Allowance under CSR-353.

When Is the Increase Not Payable?

Paragraph 6 expressly excludes Special Additional Pension allowed in lieu of pre-retirement Orderly Allowance and the monetized value of a driver or an orderly. The memorandum’s 7% increase is not admissible on those specified pension components.

Shared Pension Liability Between Governments

Where the gross pension sanctioned by the Federal Government is shared with another Government under Part IV of Appendix III to the Accounts Code, Volume I, paragraph 5 requires the amount of the pension increase to be apportioned between the Federal Government and the other Government on a proportionate basis.

Frequently Asked Questions

What is the Federal Government pension increase for 2026?

The memorandum approves a 7% increase on baseline pension with effect from 1 July 2026.

Does the increase apply to people retiring after 1 July 2026?

Yes. Paragraph 2 states that the increase is also admissible to pensioners who retired on or after 1 July 2026.

Does the increase apply to family pension?

Yes. Paragraph 4 covers family pension under the Pension-cum-Gratuity Scheme, 1954 and the Liberalized Pension Rules, 1977, as amended, as well as the specified extraordinary pension and compassionate allowance categories.

Is the 7% increase payable on monetized orderly or driver value?

No. The memorandum expressly excludes Special Additional Pension in lieu of pre-retirement Orderly Allowance and the monetized value of a driver or orderly.

Related EmployeesDesk Resources

For related guidance, see Finance Division instructions on pension after re-employment or appointment after retirement.

Official Finance Division Office Memorandum

Refer to the original memorandum for the complete conditions and earlier orders used to determine baseline pension.

Download the Finance Division pension increase memorandum dated 29 July 2026 (PDF)