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Pension Rules:: Formula

The document outlines rules regarding pension calculations for government employees in India. It states that an employee must work for a minimum of 10 years to receive a pension, and the maximum years of service counted is 33. Pension is calculated as a percentage of the average basic pay from the last 10 months, multiplied by the number of years served divided by 33. Commutation allows receiving a lump sum equal to 1/3 of the basic pension amount, which is then deducted from monthly payments for 15 years. Family pension is based on the last pay amount of the deceased employee.

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Munnangi Nagendrareddy
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351 views4 pages

Pension Rules:: Formula

The document outlines rules regarding pension calculations for government employees in India. It states that an employee must work for a minimum of 10 years to receive a pension, and the maximum years of service counted is 33. Pension is calculated as a percentage of the average basic pay from the last 10 months, multiplied by the number of years served divided by 33. Commutation allows receiving a lump sum equal to 1/3 of the basic pension amount, which is then deducted from monthly payments for 15 years. Family pension is based on the last pay amount of the deceased employee.

Uploaded by

Munnangi Nagendrareddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PENSION RULES :

· Superannuation Pension is granted to an employee who has put in minimum 10


years of service.

· Maximum service counted for full pension is 33 years.

· Pension on VRS (under CB (employees) Pension Regulation 29) is granted after 20


years of active service, additional 5 years notional service is added to the qualifying
service provided it does not take beyond the date of superannuation.

· Basic Pension is calculated on the average of last 10 months Basic Pay,FPA, PQA and
any special allowance ranking for PF.

· Formula :- Basic Pension = BP+FPA+PQA+Other Spl Allow X No. of years of active


service / 2 x 33 years

· DA is paid on the basic pension, which is revised in Feb & Aug every year.

· Commuted Pension (1/3 of Basic Pension) is restored after 15 years from date of
commutation.

· Family Pension is calculated on the last pay drawn by the deceased employee.

· Regular Ex-gratia payable Rs.300 plus Dearness Relief, Family Ex- gratia payable
Rs.175 plus Dearness Relief payable to the pre 01-01-1986 retirees. Family Ex-gratia
extended to their Spouse.
PENSION CALCULATION

a) Basic pension : 50% of the average Basic pay drawn by the employee during the
last 10 months of the service. The Basic pay includes, BASIC+ STAGNATION
INCREMENTS+ GDP+PQP+FPP (ranking for PF )
b) DA at the prevailing rate on half yearly basis on Feb & August every year.
c) Total Pension will be : (a) Basic Pension + (b) DA

EXAMPLE :

PENSION DA RATE : @60.70% (PRESENT RATE)

THEN YOUR PENSION WILL BE :


BASIC PENSION (FOR PENSION) / 2 X NO. OF YEARS OF ACTIVE SERVICE (MAX 33 YRS) / 33

NO. OF YRS OF SERVICE : 33 YRS NO. OF YRS OF SERVICE : 27 YRS

45960 /2 X 33 /33 = Rs. 22980 + DA Rs. 13949 (@60.70) 45960 /2 X 27 /33 = Rs. 18802 + DA Rs. 11413 (@60.70)
= Rs. 36,929/- = Rs. 30,215/-
If commutation is opted,
then the pension will be :

33 YRS SERVICE : Rs. 36929 - Rs 7660 (1/3 OF 22980) = Rs. 29,269.00


27 YRS SERVICE : Rs. 30215 - Rs 6267 (1/3 OF 18802) = Rs. 23,948.00
(A pensioner may surrender up to a maximum of 1/3 of the basic pension + Additional
allowance which ranks for PF for commutation purpose)

==================================================================

COMMUTATION CALCULATION
TO KNOW YOUR COMMUTAION AMOUNT, PLEASE TAKE YOUR BASIC AT THE TIME OF
RETIREMENT +STAGNATION+GDP+ PQA + FPP (Allowances eligible for PF) & MULTIPLY THE SAME
BY THE FACTOR GIVEN IN THE CHART GIVEN BELOW:
COMMUTATION AMOUNT WILL BE :

In the above example, the basic at the time of retirement will be

Rs 45,960 (BASIC FOR PENSION)

a) If the employee retired at the age of 60, his age as at next birthday

will be 61.

b) The factor as per above table will be 19.62.

c) Therefore, total commutation amount to be received

by him from the bank will be ………………………

= Rs 45960 multiplied by 19.62 = Rs 9,01,735/-

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