Monday, December 21, 2015

Reduction in the time period for Restoration of Basic Pension

The Commission has received a number of representations requesting reduction of restoration period of commuted portion of pension from the existing 15 years.

Analysis and Recommendations : The Commission notes that prior to V CPC the commutation allowed was one-third. However, there was no restoration. The Supreme Court, vide their judgement dated 09.12.1986, allowed restoration of pension after 15 years. The Supreme Court in its judgement specifically stated that though the amount is recovered in 12 years, yet since there is a risk factor and some of the states are restoring pension after 15 years, the period of restoration is fixed at 15 years. 

The V CPC in its recommendation increased the percentage of commutation to 40 percent and recommended restoration period at 12 years. But the reduction of restoration period was not accepted by the government. The VI CPC did not recommend any change in the maximum percentage of commutation allowed or in the period of restoration.

This Commission also does not recommend any change either in the maximum percentage of commutation or in the period of restoration.

Authority: 7th CPC Report