Central Government Commutation of Pension - Frequently Asked Questions

Central Government Commutation Of Pension – Frequently Asked Questions Updated As On 04.11.2013 Compiled And Issued By Department Of Pension And Pensioners Welfare (Pensioners Portal)

COMMUTATION OF PENSION

A pensioner can opt to commute up to 40% of the pension admissible at the time of retirement.

Yes. No Government servant against whom departmental or judicial proceedings as referred to in Rule 9 of the Pension Rules, have been instituted before the date of his retirement or the pensioner against whom such proceedings are instituted after the date of retirement, shall be eligible to commute a fraction of his provisional pension authorised under Rule 69 of the Pension Rules or the pension, as the case may be, during the pendency of such proceedings.

No, since the commutation does not become absolute in such cases the benefit cannot be given to the family.

The reduction in the amount of pension on account of the commutation shall be operative from the date of receipt of the commuted value of pension or at the end of three months after issue of authority by the PAO for the payment of commuted value of pension, whichever is earlier.

The reduction in the amount of pension on account of commutation shall be operative from the date on which the commuted value of pension is credited by the bank to the applicant’s account to which pension is being credited.

The reduction in the amount of pension on account of commutation shall be operative from its inception. The commuted value is paid in two stages as such the reduction in the amount of pension shall be made from the respective dates of the payment as per (a) or (b) above, as the case may be.

The 15-year period for restoration may be reckoned from the date of retirement itself only in case where the payment of commuted value of pension was/is made during the first month of retirement leading to appropriate reduction on account of commutation in the first pension itself. In all other cases, where the commutation of pension led/leads to a reduction in the second or subsequent month, the 15-year period will be reckoned from the date on which reduction in pension became/becomes effective.

No, Restoration of commuted portion of pension after 15 years (from the date of crediting of commuted value) or as fixed by the Government from time to time is to be made automatically by bank. In cases where the date of commutation is not readily available in the PPO, the bank will obtain the information from the concerned PAO who issued the PPO through CPAO before restoring the commuted portion of pension.

Commuted portion of pension is to be restored after 15 years from the date of commutation. This restoration was introduced w.e.f 01.04.1985. The commuted amount of pension shall be restored on completion of fifteen years from the date the reduction of pension on account of commutation becomes operative in accordance with Rule 6 of CCS (Commutation of Pension) Rules provided that when the commutation amount was paid on more than one occasion on account of upward revision of pension, the respective commuted amount of pension shall be restored on completion on fifteen years from the respective date(s).

Reduce/residual/residuary pension is the part of pension which is payable after deducting commuted portion of the pension.

The age reckoned for calculation of commuted value of pension at the time of original application for commutation of pension will apply for calculation of commutation value of additional commutable pension. However, as mentioned in the OM dated 04.08.2016, the commutation factor in the revised Table of Commutation Value for Pension will be used for the commutation of the additional amount of pension that has become commutable on account of retrospective revision of pay/pension.

Reduction in pension on account of additional commutation of pension will be in two or more stages as per the provisions contained in Rule 6 and Rule 10 of the CCS(Commutation of Pension) Rules,1981.

The commuted portion of pension shall be restored after 15 years from the respective dates of commutation as provided in Government of India decision No.1 under the Rule 10 of CCS(Commutation of Pension) Rules,1981. Necessary endorsement should be made on PPO.

The commutation of pension become absolute on the date following the date of his retirement. The commutation value taken will be Age on 61st Birthday (i.e. 8.194) in the present commutation table, if he has retired on attaining the age of 60 years.

There is no provision for second option for commutation after the first option becomes absolute.

Source: Pensioners Portal