Retirement Benefits Calculator for Central Government Employees – Commutation Factor Value of Pension
Retirement Benefits Calculator
Commutation Factor Value of Pension Calculator as per 7th CPC Commutation Table
“Pension commutation is a lifetime asset for Government employees. After completion of his Government service, more than 30 years, half of the lifetime, selling his 40% of the pension amount, an employee gets a bulk amount while retiring”.
Commutation is not easy money for Government employees, not a gift also..!
The Calculation of Pension Commutation as per the Pension Rules for existing and retired CG employees. This is a simple tool to find the value of pension, reduced pension after commutation, and the commutation amount as per your inputs. The pension and commutation calculation is not applicable for premature retirement or Voluntary retirement employees.
What is the commutation Value of the Pension calculation formula?
Retiring Government employees has a choice to sell a part of their pension and get the bulk amount as ‘Commutation’. After the implementation of the 7th pay commission, there is no change in the calculation of the commutation of pension.
|The formula for arriving at the commuted value of Pension (CVP) is
CVP = 40 % x Commutation factor* x 12
* The commutation factor will be with reference to age next birthday on the date on which commutation becomes absolute as per the New Table annexed to the CCS (Commutation of Pension) Rules, 1981.[Note: All the figures are indicative]
Commutation Calculation Formula with Example as per Pension Rule: A Central Government servant has an option to commute a portion of pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after the expiry of one year, he/she will have to undergo a medical examination by the specified competent authority.
Pension Commutation Factor Calculation and Benefits: Lump-sum payable is calculated with reference to the Commutation Table. The monthly pension will stand reduced by the portion commuted and the commuted portion will be restored on the expiry of 15 years from the date of receipt of the commuted value of the pension. Dearness Relief, however, will continue to be calculated on the basis of the original pension (i.e. without reduction of commuted portion).
Retirement Benefits for Central Government Employees
Pension – Minimum and Maximum Pension: After the implementation of the 7th pay commission, the minimum pension is Rs. 9000 per month and the maximum amount of pension is 125000 per month.
Commutation of Pension: There are no specific 7th pay commission recommendations on this subject. No change in the formula for calculating the commutation of the pension amount.
Retirement Gratuity & Death Gratuity: Retirement gratuity is eligible for the retiring employees from Government service with a minimum of five years of regular service. The formula for the retirement gratuity calculation is 1/4th of a month’s Basic Pay plus Dearness Allowance drawn on the date of retirement for each completed six monthly periods of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable for qualifying service of 33 years or more is 16 times the Basic Pay plus DA, subject to a maximum of Rs. 20 lakhs.
The superannuation age in Central Govt Services is now 60. If an employee gets voluntary retirement, the completed year of age will be taken into the account of Commutation calculation.
What is the Commutation Factor for normal retirement?
- At present, the normal retirement age in Central Govt Services is 60. The age factor used in commutation calculation is 8.194
Commutation of Pension Formula for PBOR
- 50% of pension x 12 x Purchase Value (on the age next birthday)
Benefits of Commutation of Pension
- Calculation of restoration of commuted pension. After exactly 15 years, after 180 months received the payment of commutation, the pension will be revised by the pension paying bank.
- Commutation factor table for bank employees
- Rate of interest on commutation of pension
Restoration of Commutation Form
Restoration of commuted portion of pensions after 15 years – Form of application for restoration of commuted portion of pension – Click here
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What is the rate of interest on the commutation of pension?
As per the commutation table with effect from 1.3.1971, the table is based on a rate of interest of 4.75 per cent per annum. And another commutation table effective from 1.1.2006 indicated ‘Basic LIC (94-96) Ultimate Tables and 8.00% interest”.
What is the commutation factor?
The commutation factor for the employees retiring on a regular basis (age next birthday of 60) is 8.194.
How is Pension Commutation Calculated for PBOR?
An officer in the rank of Personnel Below Officer Rank (PBOR) may commute 50% of his basic pension. A commuted value of the pension is calculated on the basis of age on the next birthday, which falls after the date on which the commutation becomes absolute.
What is the calculation formula for pension commutation?
The calculation formula for commutation of pension value is CVP = 40 per cent multiply with commutation factor and again multiply with 12