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New Commutation Table - How to calculate Gratuity and Pension - Terminal Benefits

New Commutation Table - How to calculate Gratuity and Pension - Terminal Benefits

"For payment of commutation amount the Commission has noted that various factors suggest that the procedure of restoration of commuted amount after 15years appears to be more than fair. However the Commission has recommended the a new table (Annex.5.1.2) for calculation of commutation values."

Age
Factor
Age
Factor
Age
Factor
20
9.188
41
9.075
62
8.093
21
9.187
42
9.059
63
7.982
22
9.186
43
9.040
64
7.862
23
9.185
44
9.019
65
7.731
24
9.184
45
8.996
66
7.591
25
9.183
46
8.971
66
7.431
26
9.182
47
8.943
68
7.262
27
9.180
48
8.913
69
7.083
28
9.178
49
8.881
70
6.897
29
9.176
50
8.846
71
6.703
30
9.173
51
8.808
72
6.502
31
9.169
52
8.768
73
6.296
32
9.164
53
8.724
74
6.085
33
9.159
54
8.678
75
5.872
34
9.152
55
8.627
76
5.657
35
9.145
56
8.572
77
5.443
36
9.136
57
8.512
78
5.229
37
9.126
58
8.446
79
5.018
38
9.116
59
8.371
80
4.812
39
9.103
60
8.287
81
4.611
40
9.090
61
8.194
-
-
Commutation of Pension - Orders
Commutation of Pension as per 7th CPC - DPPW Orders
OM F.No.42/14/2016-P&PW(G) dt.24.10.2016
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Commutation of Pension - Some Question and 
Answers on Retirement Benefits - Pensioners Portal 4.11.2013
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Amendment in CCS(Commutation of Pension) Rules, 1981
DoPPW Notification dt. 9.11.2010
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Rule 10 of CCS (Commutation of Pension) Rules, 1981
Commuted value be paid without fresh applications
DOPT Order OM F. No. 38/79/08-P&PW(G) dt.27.10.2010
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New Commutation Table
How to calculate Gratuity and Pension
Terminal Benefits - 14.11.2008
Click to read...

(New Commutation Table)
Retirement from Government service, the Government offers various retirement benefits to its employees as a measure of social security for their old age. The quantum of these benefits is dependant upon the factors.

The minimum qualifying service for superannuation pension is 20 years.
The average emoluments of last ten months or the pay last drawn
Ten years shall not be entitled to pension
The minimum pension of Rs.3500
Family pension shall be calculated at a uniform rate of 30%

It may be noted here that, the term ‘Emoluments’ has a different connotation for the calculation of pension and gratuity. For the calculation of pension, ‘Emoluments’ refers to Basic Pay+ Grade Pay. However, for the purpose of the calculation of gratuity the term ‘Emoluments’ includes Dearness allowance as on the date of the retirement of a government servant.

The phrase ‘Qualifying service’ refers to the total duration of service put in by a government servant after reducing any period of non qualifying service such as periods of dies non, suspension specified as non qualifying service or any other period of absence not regularized as leave.

The amounts payable to a government servant upon retirement from service can be classified into 2 categories.

1.Retirement benefits.
2. Other dues.

The first category includes the following:
1.Pension
2.Commutation value of pension.
3.Gratuity

Other dues which become payable upon retirement are:
1.Insurance
2.Leave Encashment
3.GPF balance.

For the timely payment of retirement and other benefits the timely lodging of a claim with the Head of office is a must. Government servants due to retire must submit completed claim forms to their Heads of offices atleast 6 months before their retirement to ensure that all benefits are paid to them timely. The Heads of office process the pension papers as per the rules and forward the same to CCA offices for effecting payment to the retiring official.

Also to avoid any unnecessary payment related complication in the event of the death of a government servant it is essential that all government servants submit a copy of completed nomination forms for GPF, Gratuity and Insurance to their Heads of offices for attaching in their service books. Further, government servants should also verify their service books once annually and see whether all entries pertaining to service verification, insurance and pension contribution, leave etc. have been properly recorded in them. Any discrepancy in these entries should be brought to the knowledge of the Head of office at the earliest.

Calculation of Superannuation pension

The formula for the calculation of superannuation pension is as given below:

50% of the emoluments drawn during the last month

For example:
emoluments drawn during the last month = Rs.12000.00
Dearness Allowance rate on the date of retirement = 16%
Qualifying service = 28 years
Age on retirement = 60 years
Commutation desires = 40%
In the above case pension will be equal to 1/2 x 12000 = Rs. 6000.00

The minimum amount of pension payable is Rs.3500 and the minimum amount of qualifying service entitled for pension is 20 years.

Calculation of Retirement gratuity

Retirement gratuity is admissible to all employees after completion of 5 years of qualifying service. The quantum of gratuity payable is also derived from the emoluments (but here DA on the date of retirement is also included) @ ½ of emoluments for each completed 6 monthly period of qualifying service subject to a maximum of 16 ½ times the emoluments from Rs. 3.5.lacs to raised 10 lakh. Therefore in the above example the amount of gratuity payable would be:
13920 (Pay + DA) x 66/4 = Rs.229680.00.

Gratuity is not payable to retirees against whom disciplinary / vigilance proceedings are pending at the time of retirement, till the conclusion of such proceedings.

Calculation of Commuted Value of pension

As per the CCS (Pension) Rules, the government also gives an opportunity to its employees to commute a part of their pension in return for a lumpsum payment. The maximum percentage of pension which can be commuted under these rules is 40%. Upon the receipt of the lumpsum commuted value of pension, the pensioner draws reduced pension to the extent of the amount commuted, for 15 years. Thereafter, his pension is restored to full. Commuted value of pension is not payable to retirees against whom disciplinary / vigilance proceedings are pending at the time of retirement, till the conclusion of such proceedings.

In the above example the amount of pension admissible for commutation will be calculated in the following manner:
40/100 x 6000 = Rs. 2400

The amount of lumpsum payable in lieu of the commuted amount is determined by means of a Commutation Table (given above) containing the commutation factors. The formula for working out the lumpsum payable is as follows.

Amount offered for Commutation x 12 x Commutation factor.

Therefore in the above case the amount will be equal to 2400x12x8.194 = Rs.2,35,987

The reduction in the amount of pension on commutation will become operative from the date of receipt of the commuted value by the pensioner, or at the end of three months after the issue of authority for payment, whichever is earlier. For the restoration of the commuted value of pension upon completion of 15 years, the pensioner should apply to the pension disbursing authority i.e., Post office / Bank in the

Encashment of Earned leave

The encashment of earned leave at credit at the time of retirement. The amount of leave encashment payable is worked out in the following manner. Emoluments (Pay +GP)/30 x No. of days of EL credit subject to max. 300 days Therefore in the above case the leave encashment payable would be; 13920/30 x 300 = Rs. 139200.00 (For 300 days of earned leave.)

General Provident Fund

The GPF balance at the credit of the employee becomes due for payment at the time of his retirement. GPF subscription is to be compulsorily discontinued during the last 3 months of service on superannuation. The employee should fill up the form for final payment and submit in his office. After processing of the same the form shall be forwarded to the concerned CCA office, which shall make arrangement for the payment of the principal and interest in the GPF account of the subscriber.

Comments

Anonymous said…
This is realy great posting i have ever seen for the benefit for retiree's. Thanx to the Nandhi

Regards
Surjit Singh
Puneet said…
in case you get your pension commuted, the DR is paid on original pension or commuted pension? What all contributes towards enouluments for a defence pers?

Puneet
jai said…
If someone has worked in CPWD for five years and he/she dies in 1992 then what will be the new family pension in 2016?
Current pension is Rs- 6000.
Can u tell me the approx new pension.
mudigonda A said…
from the above it is seen that pension is calculated on the last emoluments drawn, ie basic pay plus grade pay.
But my last emoluments drawn 21090+5400=26490 (LPC) while on deputation to UPSC from Railways and retired there on superannuation on 31.08.2011 with the approval of the competent authority.
But the pension fixed by Railways was not taken into the last emoluments actually received by on the day of superannuation. and also my pay was not fixed in VI PC drawing the increment due on 1.3.2006 as per Railway Board orders.
Please clarify the issue.
V Rao Mudigonda
gayatri116@gmail.com
9441070079
Unknown said…
I AM PHYSICALY HÀNDICAPED PERSON DUE TO LEG PAIN I TOOK VRS ON 25/04/ 2015 .I HÀVE PUT IN 31 YEÀRS OF SERVICE. MY LAST DRAWN PAY WAS RS.22800 /- UNDER SCALE PÀY 9300 - 34800.ÀVERAGE EMOLUMENT WAS FIXED AT RS. 22492/-, & MY BASIC PENSION WAS FIXED AT RS. 11400/-CUMMUTATION WAS FIXED AT RS. 4560 WHAT WILL BE MY BASIC PENSION & D.A. I WÀNT TO KNOWN IF I CAN BE REEMPLOED, I HAVE 4 YEÀRS OF SERVICE. PLEASE REPLY,
Unknown said…
I retired on 30.6.2008 with a basic pension of Rs. 27200. I would like to know whether a part of my increase in Pension would be commuted after the implementation of 7 CPC.
Thanks and regards
Dr. P G Balakrishnan
Retired Scientist, CSIR-CECRI, Karaikudi, TN.
Anonymous said…
If someone is born on 1st of a month then he superannuates of the last day of the previous month. In such cases, while calculating commutation of pension,which coefficient should be used- treating next birthday as 60th or 61st?
C Mohan
Unknown said…
sir,I Voluntary retired on 31.05.2016.
All pensionary benefits calculated as per 6th CPC.
Now itwould be revised, and due and drawn arrear would be paid to me?
New PPO wwill be issued?
what would be new commutation factor for commutation value calculation?
Unknown said…
Sir.I was retired on 01 Aug 2016. By Basic pay was Rs 28750 including Basic Pay 20550+ Grade pay 4800+MS Pay 2000 and X Pay 1400. Now I will get 25157 Rs as pension in old scale including 14375 Basic Pension (50% of Basic Pension) and 17969 as DA. ie 14375+17969=32344 - 7187 (Computation amount) = 25157.

As per 7th pay commission : Basic 20550+GP 4800 x 2.57 = 65149 as per pay matrix 66000 + 5200 MSP and 3600 X Pay. Total 74800.

50% of Basic is 37400 .
Please clarify me the following.
What is my new commutation amount.
How much pension I will get in new scale.
how much gratuity will get. My DOB is 20 may 1967. and Service is 32 Years
Raju
Anonymous said…
Gratuity limit was proposed to be raised to 20 lakh what happened to that proposal ?
Magadevan said…
The entitled TTA for retiring persons under SR146-147 read with SR116 is found missing in the terminal benefits
Anonymous said…
Sir I am retired from cenrtre govt total service 33 years 10 month and 20 days, sir any extra benefit for me or not

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