What is Commutation of Pension

It is a common terms that every pensioner knows about the commuted portion of the pension. A pensioner may opt to get commuted a portion of his pension from his total pension (basic pension) entitled by him. In case of defence pensioner it is 50% and in case of civil pensioners it is 40% and in case of some other organisations they have their own set of rules.

How much Commutation amount entitled by a pensioner ?

The commuted portion of the pension is paid to the pensioner which is equal to the at portion x 12 months x purchase value and the amount arrives at is known as commutation. To know more in this regard kindly click on the link at the end of this article on Commutation table. Peope have wrong myth about commutation in their miond which must be removed.

How to Restore the Commuted Portion of your Pension

You must receive a lump sum amount on account of commuted portion of your pension. The amount you have received may be broadly assumed as advance. So, you have to repay it. As a result a fixed amount is deducted from your total pension every month for 15 years from date of commutation deduction started. Now, it is question that how will this deduction stops ?

The deduction on account of commutation of your pension is occur for 15 years. As and when it completes 15^th year, the deduction should be stopped automatically without necessity of any request by the pensioner. In other words you will get the full amount of pension once you have completed 15 years of your retirement (commutation deduction).

Rules of Restoration of Commutation

Armed Forces pensioners who have commuted a portion of their pension on 01.04.1985 or thereafter have completed or will complete 15 years from the date of their retirement or from the date on which reduction in pension on account of commutation becomes effective will have their commuted portion restored by Pension Disbursing Authority without waiting application from the pensioner.

If your deduction has not been stopped inspite of completion of 15 years of deduction, what should be done?

Defence pensioner knows that their pension is disbursed by SPARSH directly. It is true that the migration to SPARSH yet to be completed for all legacy pensioners. But we may epect that within next few years, 100% pensioners will be covered under the system SPARSH. So, the SPARSH pensioner should approach directly to the PCDA Allahabad and Bank pensioners should approach to the concerned bank directly. Don’t forget to produce your PPO and bank account details. If possible keep soft copy of your Pension slip stored for any future reference.

Rakesh Jhunjhunwala expired on 14th August 2022.