Payment of commutation value of additional amount of pension in respect of employees who retired on/after 01.01.2006 but before 02.09.2008 and expired before exercising option for commutation of additional amount of pension

A copy of Department of Pension and Pensioners’  Welfare [DOP&PW]’s O.M.  No. 38/79/08-P&PW[G] dated 27th October, 2010 on the above subject is enclosed for information and compliance.  These instructions shall apply mutatis mutandis on the Railways also.  DOP&PW’s OM dated 02.09.2008, referred to in the enclosed O.M. was adopted on the Railways vide this office letter of even number dated 15.09.2008,  and Rule 10 of the CCS [Commutation of Pension] Rules, 1981 corresponds to Rule 11 of the Railway Services [Commutation of Pension] Rules, 1993.  For the purpose of calculating the commutation value of commutable portion of additional pension, new substituted Table as at Annexure to Board’s letter of even number dated 15.09.2008 should be applied. 

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Copy of Department of Pension and Pensioners’  Welfare [DOP&PW]’s O.M.  No. 38/79/08-P&PW[G] dated 27th October, 2010

OFFICE MEMORANDUM

Sub: Payment of Commutation Value of additional amount of pension in respect of employees who retired on/after 1.1.2006 but before 2.9.2008 and expired before exercising option for commutation of additional amount of pension – Regarding.

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As per the provisions contained in para 9.3 of this Department’s OM No. 38/37/08-P&PW(A) dated 2nd September, 2008, the revised table of commutation value for pension will be used for all commutations of pension which become absolute after the date of issue of this OM. In the case of those pensioners, in whose case commutation of pension became absolute on or after 1.1.2006 but before the issue of this OM, the pre-revised Table of Commutation value for pension will be used for payment of commutation of pension based on pre revised pay/pension. Such pensioners shall have an option to commute the amount of pension that has become additionally commutable on account of retrospective revision of pay/pension on implementation of the recommendations of the Sixth Central Pay Commission. On exercising such an option by the pensioner, the revised Table of Commutation Value for pension will be used for the commutation of the additional amount of pension that has become commutable on account of retrospective revision of pay/pension. In all cases where the date of retirement/commutation of pension is on or after 2.9.2008, the revised Table of Commutation Value for pension will be used for commutation of entire pension.

2.         References have been received from various Departments seeking clarification from this Department whether the commutation value of additional pension in respect of such employees who had retired during the period between 1.1.2006 and 2.9.2008 and died before exercising option is payable to the eligible member of family or not. The issue has been examined in consultation with Ministry of Finance, Department of Expenditure who has observed that the Pay Commissions’ intention was that the pensioner should exercise a conscious choice in view of the fact that the commutation table has changed w.e.f. 1.1.2006. As such, in these cases, the Rule 10 of CCS (Commutation of Pension) Rules, 1981 may be followed and difference in commuted value be paid without fresh applications. The intention was not to deny the higher capitalized value on account of revision of pension.

3.         This issues with the concurrence of Ministry of Finance, Department of Expenditure vide their UO No. 456/EV/2010 dated 18.10.2010.