The Department of Pension and Pensioner’s Welfare under the Ministry of Personnel, P.G. and Pensions has recently issued an office memorandum regarding the effects of revision of pension on a pension already commuted.
The question before the department was whether the pension authorised at the time of retirement or the pension revised subsequently at the time of application of commutation shall be allowed to be commuted.
Central Government servants have 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 expiry of one year, he/she will have to undergo medical examination by the specified competent authority.
It was observed and clarified by Charanjit Taneja, Under Secretary to the Department of Pension & Pensioners’ Welfare that, according to Rule 10 of the CCS (Commutation of Pension) Rules, 1981, an applicant who has commuted a percentage of his/her final pension and after commutation, the pension has been revised and enhanced retrospectively, the applicant shall be paid the difference between the commuted value determined with reference to the enhanced pension and the already authorised commuted value. It was also clarified that no fresh application had to be filed to avail the payment of difference.
An option was also given to the Pensioners who retired from 01.01.2016 till 04.08.2016, to not commute pension which has become additionally commutable on revision of pension on the recommendations of the 7th pay commission. It was also clarified that cases in which the additional pension has already been commuted after the 7th pay commission, will not be reopened.
It was also added that, the pension originally sanctioned at the time of retirement shall be allowed to be commuted, for those whose pension was authorised on retirement before 01.01.2016 and the and the application was given on or after 01.01.2016.
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