PENSION COMMUTATION CALCULATOR – COMMUTATION VALUE OF PENSION CALCULATION
Commutation Value of Pension Calculation Formula
Commutation of Pension = 40 % x Commutation factor* x 12
Apart from monthly Pension, another important retirement benefit for Government employees is Commutation Amount. Commutation is optional, not compulsory. Even they can sell 10% to 40% of basic pension with four slabs. Most of the employees are choose to commute 40% of basic pension for two reasons.
One reason is, they will get lum psum amount at the time of retirement. And another reason, If an employee met sudden death after retirement, his basic pension will not be affected.
For example, an employee’s birth day is 25.05.1964 and he joined in Government service on 25.02.1989 and his last month pay Rs.56,900
Regular retirement (Superannuation) Calculation will be as follows…
Date of Retirement: 31.05.2024
Total Qualifying Service: 34 Years and 7 Months
Basic Pension: 28,450
Commutation (40% of Basic Pension): 11,380
Reduced Monthly Pension: 17,070
Commutation of Pension Amount: 11,18,973
Formula for Commutation of Pension Amount: 8.194 x 11380 x 12
[8.194 is Commutation Factor]
* 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.