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Thread: Pension Commutation

  1. #1
    Junior Member PKG1960 is on a distinguished road
    Join Date
    Sep 2009

    Default Pension Commutation

    The Commuatation table recommended by the VICPC has markedly lowered the multiplication factor for arriving at the commuted value of pension. I am seeking premature retirement at age 47 years. The multiplication factor at age 47 used to be 14.1 prior to the pay commission. It has now been reduced to 8.93. As a result the commuted value in my case reduces by almost 30%.

    Full Pension: 25000
    40% commutation: 10000
    Commutted value earlier: 10000 X 14.1 X 12 = 16,92,000
    Commutted vaue now:10000 X 8.93 X 12 = 10,71,600

    I am seeking expert advise on the following two aspects:

    (a) Has the govt accepted the new commutation table?
    (b) If I do not have any pressing need for the lumpsum commuted amount, does it make financial sense to commute the pension or not?

  2. #2
    Junior Member jayakumarbalaji is on a distinguished road
    Join Date
    Oct 2008

    Default commutation of pension

    Question No: 1.The Government has already accepted the recommendation and the table is being used for the employees who have retired on or after 01-01-06. You are correct that the employees will get lesser amount of commuttion amount because of new table.

    Question No. 2: It is always better to get the commutation amount even though you may not need it. You can invest in Land, or Gold or deposit in banks. For all your pension related quries mail to: [email protected]

  3. #3
    Junior Member PKG1960 is on a distinguished road
    Join Date
    Sep 2009

    Default Thanks

    Thankyou for the information
    However, my email to the address suggested by you returned undelivered. Kindly recheck the email address

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