Pension Commutation as per ROPA 2019

September 03, 2022

I will discuss Pension Commute in this blog. Commutation of Pension is a part of Basic Pension. Pension commutation is started as per West Bengal service rules'1983, the effective date of which is 01.01.1981.

After that, the rules of this commutation have changed repeatedly. In DCRB 1981, it is said that according to the Pension Commuted Rate of the Government, the employees have to do Pension Commute and at that time the Pension Commute Rate was One-Third (1/3). And it is said that commutation can be done in case of any Pension (Retiring and Superannuation) and a chart is given according to the commutation value given in that chart the commutation value which will be from the next birthday of retirement of an employee should be multiplied by 12.

Later G.O. No. 297-SE(B) {dt. 23.12.1994} amended to say that commutation of pension can be applied for before retirement. Earlier it was said that Basic Pension Commute can be done by One-third(1/3), but ROPA 98 G.O no. 123-SE(B) {dt. 29.06.1999} is amended to say that 40% of the Basic Pension can be commuted and the percentage of the commuted Basic Pension will be added to the Basic Pension of the employee after 15 years of retirement i.e. at the age of 75 years, the rest of the rules will remain the same.

G.O No. of Ropa 2009 In 74-SE(B) {dt. 19.05.2009} It is said that Pension Commutation Rate will be 40% but DCRB 1981 and Ropa'98 commutation of pension chart has been replaced by new chart which is same in Ropa 2019. The new chart of Ropa 2019 is given below.

According to the commutation value chart of Ropa 2019, the commutation value on the next birthday of an employee in the year in which he retired should be multiplied by 12.

That is, if someone retires at the age of 60, his next birthday is 61.

The commutation value chart of Ropa 2019 gives 8.194 in 61 years. This is the commutation value of 1 rupee per annum, here the number 8.194 must be multiplied by 12 to say per annum. The commutation value of Rs 1 is obtained by multiplying the number obtained. That is, if an employee commutes Rs 1 Basic Pension, his value will be (8.194×12)=98.328

It should be remembered that vide 297-SE(B) dt. G.O dated 23.12.1994 states that an employee who dies within 5 years after retirement and has received Retiring Gratuity, can claim Death Gratuity unless he has commuted Pension.

If an employee dies after 3 years after commuting, his wife will get family pension, but there is no order to deduct the commuted money from the family pension, that is, the family pension will be determined on the basis of the basic pension of the deceased employee, not on the pension that will be after commuting.

Suppose someone retired at the age of 60 years and commuted the pension and he died at the age of 62 years, then the family pensioner will not get the commuting amount of the deceased teacher at the age of 75 years because in the case of Family Pension, the deceased employee gets Family Pension at Enhanced Rate till the age of 67 years. .

Family Pension cannot be commuted.

Example:

Suppose an employee's Last Basic Pay at the time of Retirement as per Ropa 2019 was 40000 rupees and he has worked for 22 years i.e. he will get Full Pension. His Basic Pension will be Half (50%) of Last Basic Pay i.e. 20000 . He commuted 40% of Rs 20000 (here it should be remembered that Commute is on Basic Pension, not on Last Basic Pay) i.e. Rs 8000. On this 8000 rupees, you will get one time commutation value i.e. you will get one time money = (8000×98.328)= 786624 rupees. Multiplied by 98.328 because we know the commutation value of 1 rupee is (8.194×12) = 98.328.

Now then his Gross Pension will be=(20000+DA+Medical allowance 500)- commutation value.

The 8000 rupees commuted will be added to the basic pension of the employee at the age of 75 years.

Pension Commute is completely optional, you can do it or not. It is not mandatory to commute 40% of Basic Pension, if you want you can do less than that.

Pension Commutation related Notification