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Central Government Employees News

Commutation of Pension – Formula,

Calculator, Orders, Rules & Forms
Commutation of Pension
Complete Compilation
 Table of Contents
 Eligible
 Commutation of Pension Formula
 Commutation of Pension Illustration :
 Commutation Factor Table
 Commutation of Pension Calculator
 Restoration of Commuted Portion of Pension
 When Commutation of Pension to become absolute ?
 Restoration of Commuted Pension
 Nomination
 Commutation of Pension without Medical Examination
Commutation of Pension Formula
Total Commutation Amount = Commuted Amount x Commutation
Factor x 12

Note :

Commuted Amount : Government Employee pension amount is Rs.32000/-

at the time of retirement, he / she commuted 40% of his pension, then the
commuted amount is 40 percent of Rs.32000 i.e. 12800 is the commuted
amount here.

Commutation Factor : In the CCS (Commutation of Pension) Rules, the

Commutation factor value is given for different ages, this table value is
effective from 1.1.2006 – Click here to find the Commutation Value

Commutation of Pension Illustration :

Commuted Amount = Rs. 12800/-

Commuted Factor = Take Example, Age Next birthday is 42 years, then the
commutation value is 9.059 as per the Commutation Table

Total Commutation Amount = 12800 X 9.059 x 12

Total Commutation Amount = Rs.13,91,462/-

Commutation Factor Table
Two Tables available for Central Government Employees –

 Table 1 is effective from 1.3.1971 – Click here for Table 1

 Table 2 is effective from 1.1.2006 as per the 6th Pay Commission
recommendation – Click here to Table 2

Commutation of Pension Calculator

Check here for commutation of Pension calculator

Restoration of Commuted Portion of Pension

The commuted amount of pension shall be restored on completion of 15
years from the date the reduction of pension on account of commutation
becomes operative in accordance with rule 6:

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 of fifteen years from the
respective date(s)

Check here for Eligibility for Restoration of Commuted portion of pension

When Commutation of Pension to become

absolute ?
The commutation of pension shall become absolute in the case of an
applicant referred to –

(i) in sub-rule (1) of Rule 13, on the date on which the application in Form 1
is received by the Head of Office ;

(i-a) in sub-rule (3) of Rule 13, on the date following the date of his
retirement ;

(ii) in Chapter IV, on the date on which the medical authority signs the
medical report in Part III of Form 4 ;
Provided that –

(a) in the case of an applicant who is drawing his pension from a treasury or
Accounts Officer, the reduction in the amount of pension on account of
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
Accounts Officer for the payment of commuted value of pension, whichever is
earlier, and

Click here to continue – When Commutation of Pension to become absolute ?

Restoration of Commuted Pension

Rule 10A : The commuted amount of pension shall be restored on
completion of 15 years from the date the reduction of pension on account of
commutation becomes operative in accordance with rule 6:

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 of fifteen years from the
respective date(s)

Nomination
Rule 7 : An applicant shall make a nomination in Form 5 along with the
application referred to in Rule 13 or Rule 19, as the case may be, conferring
on one or more persons the right to receive the commuted value of pension
in case the applicant dies without receiving the commuted value on or after
the date on which commutation became absolute.

(2) If there is no such nomination, or if the nomination made does not

subsist, the commuted value shall be paid to the family in the manner
indicated in sub-rule (1) (b) of Rule 51 of the Pension Rules.

(3) If in any case the commuted value cannot be paid in the manner
indicated in sub-rules (1) and (2), the same shall be paid to his/her heirs.]

Commutation of Pension without Medical

Examination
Eligible to commute a percentage of his pension without medical examination
Rule 12:

(i) a superannuation pension under Rule 35 of the Pension Rules ; or

(ii) a retiring pension under Rule 36 of the Pension Rule ; or

(iii) a pension on absorption in or under a corporation or company or body in

terms of Rule 37 of the Pension Rules and who elects to receive monthly
pension and retirement gratuity ; or

(iv) a compensation pension on abolition of permanent post under Rule 39 of

the Pension Rules ; or

(v) a pension in whole or in part on the finalization of the departmental or

judicial proceedings referred to in Rule 9 of the Pension Rules and issue of
final orders thereon,

shall, subject to the limit in Rule 5, be eligible to commute a percentage of

his pension without medical examination :
Provided that he applies for commutation of pension in Form 1 or Form 1-
A in accordance with the provisions of Rule 13.

NOTE. – Pension referred to in Clause (i), Clause (ii) and Clause (iv) shall
include the provisional pension sanctioned under Rule 64 of the Pension
Rules

Commutation of Pension after Medical

Examination
Eligible to commute a percentage of his pension after medical examination.

Rule 18 :

(i) retires on invalid pension under Rule 38 of the Pension Rules ;or

(ii) Omitted by G.I., Dept. of P. & P.W., Notification No. 4/42/91-P. & P.W.
(D), dated the 25th June, 1997..

(iii) is compulsorily retired from service as penalty and is granted pension

under Rule 40 of the pension Rules; or
(iv) is in receipt of compassionate allowance under Rule 41 of the Pension
Rules ; or

(v) has retired from service on one of the pensions referred to in Rule 12 but
his application for commutation has not been received by the Head of Office
within one year of his retirement, shall be eligible to commute a percentage
of his pension subject to the limit specified in Rule 5 after he has been
declared fit by the appropriate medical authority.

Second Medical Examination

In case the pensioner has been refused commutation on medical grounds or
if he, having once declined to accept commutation on the basis of addition of
years to his actual age, recommended by the medical authority, applies for a
second medical examination, such medical examination will be held after one
year of the first medical examination.

Rule 26 :

(1) Subject to the provisions of Rule 27, the medical examination in the case
of an applicant referred to in Clause (c) of sub-rule (1) of Rule 22 shall take
place after the expiry of a period of not less than one year from the date of
the first medical examination.

(2) If the applicant desires to be re-examined on the expiry of the period

specified in sub-rule (1), the examination shall be by a Medical Board at his
own expense. For this purpose, he shall address a letter to the Head of Office
with the request that arrangements for his re-examination by a Medical
Board may be made. He shall indicate in the letter

(i) the medical authority which examined him earlier and the date on which
such examination took place,
(ii) the place where he was examined,
(iii) the opinion of the medical authority,
(iv) the date of birth and the date of retirement,
(v) designation of the post held at the time of retirement,
(vi) the amount of pension authorized,
(vii) the percentage of pension which was originally applied for commutation.

Commutation of Pension Forms

Forms Form used for
Download
 Link

Form of Application for Commutation of a percentage of Pension

Form 1 Click here
without Medical Examination

Form of application for Commutation of a percentage of superannuation

Form pension without medical examination when applicant desires that the
Click here
1A payment of the commuted value of pension should be authorized through
the pension payment order

Form of application for commutation of pension after medical

Form 2 examination by an applicant referred to in rule 18 of the central civil Click here
services (commutation of pension) rules, 1981

Form of Letter of the Chief Administrative Medical Authority – Medical

Form 3 Click here
Examination – Commutation of Pension

Click here to download more Commutation of pension forms – Form 4 ,

Form 5 & Performa

4 COMMENTS

1. Fayaz Dahlani April 8, 2021 At 10:41 PM

Commutation not received yet due to unsettlement of the pension

case. Superannuated on 31st march 2019, Pension. Rs.103553
/month Age at superannuation 62 years. Date of appointment
14th July 1982. Desires to commute 40% of pension. Please
mention exact commuted amount to be recieving & monthly
deduction from pension for recovery.

Reply

2. Adv.s.prabhakar rso November 9, 2020 At 8:47 PM

It is the deptt.which has to pay just like they do payment of gpf,

leave encashment, etc.at the time of retirement itself. If they
have not yet done n have also written commutation amount as nil
in ppo, obviously, deptt has to pay not bank. So pl write to yr
deptt.
 Reply

3. Sarla sharma October 20, 2020 At 5:36 PM

I had taken vrs on 7 aprill 2020. Ihad done 40 % comutation . I

was told by my pension section that bank will pay me th
comutation amount as i have taken vrs bank says that they will
not pay as comutation amount is written nil in ppo. Pension
section says i have done 40%comutation . Kindly advise what
should i do now.

Reply

o Mani Venkiteswaran April 16, 2021 At 10:02 AM

Raise a complaint against the appropriate department at
CPENGRAMS. It may take a couple of months but it will
be resolved for sure.

Reply

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