Frequently Asked Questions (FAQs)
(Central Civil Pensioners)
(Last updated/Reviewed: 04.11.2013)
COMMUTATION OF PENSION
G.1 How much of the pension can be commuted?
A pensioner can opt to commute up to 40% of the pension admissible at the time of retirement.
G.2 Is there any limit on commutation of pension?
A Government servant shall be entitled to commute for a lump sum payment up to 40 per cent of his pension.
G.3 Is there any restriction on commutation of pension?
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.
G.4 Whether the family can be given the benefit of 40 per cent commutation if a pensioner dies before exercising option?
In view of Governments clarificatory orders, no such benefit can be given to the family.
G.5 What will be the effective date of reduced pension if,
a) The applicant is drawing pension from PAO?
b) The applicant is drawing pension from a branch of Public Sector Bank?
c) A Government servant who retired on superannuation and commutation
applied in Form 1-A of CCS(Commutation of Pension) Rules before the date
of retirement and commutation paid through Head of Office within the
first month of retirement ?
a) 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.
(b) 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.
(c) 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.
G.6 How does the period of 15 years for restoration of commuted portion of pension reckon?
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.
G.7 Is any authorization for restoration of commuted portion of pension after 15 years required from PAO/CPAO?
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 on receipt of
application in prescribed proforma from the eligible pensioner. 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.
G.8 What has the pensioner to do for restoration of commuted portion of pension? From what date is it restored?
Commuted portion of pension is to be restored after 15 years from the
date of commutation. This restoration was introduced w.e.f. 1.4.85 i.e.
those who completed 15 years on or after 1.4.85, their pension was to be
restored. This period of 15 years is to be counted from date of
discharge provided commutation was sanctioned simultaneously with
service pension in the same PPO.
However, where commutation was sanctioned subsequent to the date of
discharge the restoration of commuted portion of pension will be done on
completion of 15 years from the date from which the amount of
capitalized value is paid or credited to the pensioner's account. Every
pensioner has to apply to his PDA (Pension Disbursing authority) through
an application after completion of 15 years for restoration of commuted
portion of pension.
G.9 Whether restoration of commuted portion of pension is admissible
to those who were absorbed permanently in autonomous bodies/PSUs and
have drawn 100% lump-sum payment in lieu of pension?
Yes. Only 1/3rd portion of pension may be restored after 15 years from
the date of commutation in terms of O.M. dated 6.9.2007, O.M. dated
15.9.2008 and 11.07.2013. Additional pension applicable to old
pensioners (80 years and above) and dearness relief on full pension is
also payable
G.10 What is restoration of pension and when is it due?
Restoration of the fraction of the pension commuted by the pensioners
becomes due for restoration after completion of 15 years period from the
date of payment of lumpsum value of commutation.
G.11 What is reduce/residual/residuary pension?
Reduce/residual/residuary pension is the part of pension which is payable after deducting commuted portion of the pension.
G.12 What would be the age to be used for commutation of additional
commutable pension and which factor would be used for such additional
commuted value of 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 2.9.2008, 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.
G.13 From which date the reduction in pension on account of additional commutation of pension will take effect?
Reduction in pension on account of additional commutation of pension
will be in two stages as per the provisions contained in Rule 6 of the
CCS(Commutation of Pension) Rules,1981.
G.14 What will be the date of restoration of additional commutation of pension?
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.
G.15 A person with D.O.B. on first of month retires in the previous
month. What will be the value to be taken for calculation from
commutation table?
The commutation of pension become absolute on the date following the ate
of his retirement. The commutation value taken will be Age on 61st
Birthday i.e. 8.194 in the present commutation table
G.16 If the commuted amount is paid in stages then what will be the date of restoration?
If the payment of commuted value is made in stages, the restoration will
also be made in stages from the respective dates of payment.
Source: www.pensionersportal.gov.in