VISIT OUR WEBSITE http://exweltrust.in for OROP ARREARS CALCULATION

http://exweltrust.in/index.php/home/start">"visit http://exweltrust.in for OROP arrear calculation sheet"> Contact: Exwel Trust, 15G Military Lines, Samathanapuram, Palayamkottai, Tirunelvel27002.
Cost of Ten Books Rs.1500/- (including courier charges)
Phone:9894152959.& 04622575380.Email:esmwelfare@yahoo.in

A GUIDE BOOK ON DEFENCE PENSION (IN HINDI) WILL BE RELEASED SOON

A guide book on Defence Pension (in Tamil) Released on 03.01.2016. Contact: Exwel Trust, 15G Military Lines, Samathanapuram, Palayamkottai, Tirunelveli 627002. Cost of Ten Books Rs.1500/- (including courier charges) Phone:9894152959.& 04622575380.Email:esmwelfare@yahoo.in

Friday, May 10, 2013

ATTENTION VETERAN BROTHERS SERIES-8






KNOW ABOUT COMMUTATION OF PENSION.

A  Central Government servant is entitled to commute for a Lump sum payment,   a fraction of  his pension  .For defence it is maximum of 50%.

Eligible  Pension:
 1)  Superannuation pension under   Rule-35
 2)  Retiring pension ………………….      Rule-36
 3)  Pension on Absorption………..      Rule- 37
 4)  Compensation pension  on
       Abolition of permanent post…..  Rule-39
The following categories also eligible to commute :

a)  Those who retiree on invalid pension/ Disability pension    Rule- 38
b)  Those who are compulsorily retired from service……….       Rule- 40
c)  Those who are in receipt of compassionate allowance under Rule-41  

How the commuted value is calculated:
For example :  A Sub- Group ‘Y’  was sanctioned monthly pension of   Rs.10690 /  -after 28 yrs of service.   He has commuted 50% of pension.

i.e  = 10690 X 50% = 5345/- is the commuted portion of his pension.

The capitalized vale is calculated   on the basic of his Date of birth  and the commutation factor. (Age on next DOB)
His date of birth is   22-3-1959    Date of retirement – 1-12-2009
Next DOB will be     22-3-2010
Age on next DOB  -  2010-1959=51
The commutation factor for   age 51 is----8.808
Now the commutation Value will be=   Commuted portion X 12 X commutation factor
=     5345 X 12 X 8.808= 564945.12 rounded to= 564946/-

This Sub will get this much of commutation amount. And an amount of Rs.5345 will be deducted every month  for 15 yrs.

REDUCTION IN THE PENSION  ON ACCOUNT OF COMMUTATION:

 The reduction of commuted value of pension ( CVP)  will start form the date of credit of the capitalized value to the pensioners account.

RESTORATION OF COMMUTED VALUE OF PENSION:
Rule No 6  and 10, 10a  -Commutation of pension rule-1981.

Commuted value of pension shall be restored after completion of 15 years from the date of credit of the Lump Sum to the pensioners account.

For example ,
 in this case:  Date of Credit of Lump Sum…4-2-2010
Amount of commuted portion…….5345/-
Date of restoration of this amount will be…………………….. 4-2-2025. … … ( 1)
Is it clear………………………………………………………………Situation No-I

Now, there may be cases where the Commuted value is Enhanced retrospectively as the result of Government decision,  say pay commission report announced later..

The  amount of pension may be revised/ enhanced, thus commuted value and the commutation is also enhanced and the differential amount of Capitalised value paid to the pensioners at later date.    Say 29-9-2010

Here again, the date of restoration will be 15 years for the date of credit of the differential amount  of the capitalized value, i.e 29-9-2010.

In this particular case:    The original  commuted portion was…..5345/-  ( 50% of 10690/)
Now  as the pension is increased, the CVP also increased to       5985.( 50% of 11970)
Here the difference in commuted portion is= 5985 – 5345= 640.
NOTE:  
The first CVP of rs.5345 will be restored on 4-2-2015
The second portion  of Rs.640  will be restored on  29-9-2025………        (2 )

Most of our veteran brothers are on the opinion that the whole portion of CVP will restored after 15 years from the date of retirement, which is not correct.

Where ever, commuted value was credited Twice in the account,  the Restoration also will be two time/ dates.
( Ref:  F.No.42/5/2012-P & PW (G) , GOI, Dept. of Pen & PW, New Delhi dated 31-8-2012. )

Note; Effect of commutation on Family pension:

Commutation of pension has no effect on quantum of Family pension  as the Rate of Family pension is based on the emolument of central govt.servant just before retirement.

Suppose a pensioner dies, the deduction of commuted amount ceases. No deduction on family pension.

Again, if the pensioner , after retirement dies before receiving the  commuted amount,  his wife is eligible for that amount and there will be no deduction .

All veteran brothers please make a note of this and do not unnecessarily get in to arguments with bankers in this regard.



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