Pension Components | Pension Calculation Formula for Central Govt Employees

Pension Components | Pension Calculation Formula for Central Govt Employees

I. A. Pension

Pension is admissible to permanent employees who retire with a qualifying service of not less than ten years. Temporary employees who retire on superannuation or invalidation after rendering not less than ten years of service or retire voluntarily after 20 years continuous service are also eligible for pension.

In case of the BSNL employees, the minimum amount of pension will be Rs. 1275 p.m. and maximum will be 50% of the highest pay plus Dearness Pay subject to maximum Rs.15,000.

Amount of pension is related to the length of qualifying service and average of emoluments (Basic Pay+ Dearness Pay+ Stagnation Increment + Non-practising Allowance) drawn during ten months immediately preceding the date of retirement. Full pension is admissible to an employee with qualifying service of not less than thirty-three years. The amount of pension will be 50 % of the average emoluments and should not be less than 50% of the minimum of the pay scale held at the time of retirement. Employees having lesser qualifying service (but not less than ten years) will get pension proportionate to the amount admissible for qualifying service of thirty-three years, subject to a minimum of Rs. 1275 p.m.

Example:
Average Emoluments = Rs. 12,975 .
Qualifying service = 32 years.
Pension for 33 years of qualifying service:
50% of (average emoluments) Rs. 12,975 = Rs 6,487.50
Pension for 32 years of qualifying service: Rs. 6,487.50 x 32/33 = Rs. 6290.90 = 6291 p.m. (rounded off to the next higher rupee)

B. Retirement/Death Gratuity:

(a) Retirement Gratuity is admissible to all employees who retire after completion of 5 years of qualifying service at the rate of one-fourth of emoluments for each completed six monthly period of qualifying service subject to maximum of 16 1/2 times the emoluments or Rs. 3.50 lakh, whichever is less. Emoluments for the purpose of gratuity means: basic pay, stagnation increment, dearness pay, non-practising allowance and dearness allowance on the date of cessation of service.

Example:

(b) Qualifying service = 32 1/2 years or 65 six monthly periods

(c) Emoluments = Rs. 18150

(d) Gratuity = 18150 x 1/4 x 65 = 294937.50 = Rs. 2,94,938 (rounded off)

(b) Death Gratuity is paid to the family of a Govt. servant who dies while in service, at the rates given below:

(e) Length of qualifying service

(f) Rate of death gratuity

(g) (i) Less than 1 year 2 times of emoluments.
(ii) one year or more but less than 5 years 6 times of emoluments.
(iii) 5 years or more but less than 20 years 12 times of emoluments
(iv) 20 years or more Half of emoluments for every completed six-monthly period of qualifying service subject to a maximum of 33 times of emoluments.

C. Commutation of Pension:

Eligibility:- Every pensioner is eligible to commute a portion of his monthly pension for a lumpsum payment which is the commuted value of that portion of pension. An employee or pensioner against whom departmental or judicial proceedings are pending is not eligible to commute a portion of his pension till completion of such proceedings.

Amount admissible:- Not exceeding 40% of monthly pension. Any fraction in the amount offered for commutation will be ignored; e.g. if the monthly pension is Rs. 1913 then the maximum amount admissible for commutation is:
Rs. 1275 x 40/100 = 510 = Rs. 510 only.
Commutation Amount is calculated w.r.t the Commutation factor taken from Commutation Table as relevant to the age next birthday.
The formula for working out the lumpsum payable is as follows.
Amount of pension offered for Commutation x 12 x Commutation factor.

Example:
Amount of pension offered for Commutation = Rs. 510
Age next birthday = 61 years
Commutation Factor = 9.81
Lumpsum Payable = 510 x 12 x 9.81 = 60037.20 = Rs. 60,037 (rounded off)
The reduction in the amount of pension on commutation will become operative from the date of receipt of the commuted value by the pensioner, or at the end of three months after the issue of authority for payment, whichever is earlier. The restoration of the commuted portion of pension will be admissible on completion of 15 years, for which the pensioner should apply to the pension disbursing authority i.e., Post office / Bank in the prescribed proforma.

D. Encashment of Earned leave.

Lump sum cash equivalent of leave salary admissible for the number of days of earned leave at the credit of the employee on the last day of his service, subject to a maximum of 300 days including the number of days for which encashment was availed along with LTC, is granted by the authority competent to sanction leave. The amount of leave encashment payable is worked out in the following manner.

Pay+DP+DA admissible on the date of cessation of service x No. of days of EL at credit
Example:
Date of Retirement = 31.10.2005
EL at credit = 300 days
Basic Pay = Rs. 10000
DP = 50% DA = 21%
Lumpsum admissible = (10000+5000+3150)x300 = Rs. 181500. 30

E. Benefits payable under CGEGIS:

On retirement the employee will be paid as per the Table of benefits
(i) lumpsum due to his out of the Savings Fund for entire period of membership in the lowest group; and
(ii) amount due to him for the additional units by which subscription was raised due to promotion for the period from which the rate was raised, to the date of cessation of membership.

2. Family Pension

Family pension is payable to the family of an employee/pensioner on his death in service/after retirement.
1. Normal rate of family pension:– The monthly family pension is based on the pay (Basic pay + DP + SI + NPA) drawn on the date of death or on the date of retirement, as the case may be, and is admissible at a uniform rate of 30% of pay last drawn, subject to a minimum of Rs. 1275 p.m.

2. Higher rate of family pension:- A higher rate of family pension is admissible (except in case of dependent parents), if the deceased had rendered not less than seven years of service. It is payable from the date following the date of death, for a period of seven years or up to the date on which he would have attained the age of 65 years (67 years if his age of superannuation is 60 years) had he survived, whichever is less. The rates are

(a) In case of death in service:

(i) 2 times the normal rate of family pension.
(ii) 50% 0f the pay last drawn.

(b) In the case of death after retirement:

i) 50% 0f the pay last drawn at the time of retirement.

ii) Two times the normal rate of family pension
(iii) The amount of pension authorized on retirement whichever is less.
Period for which the family pension is payable to

(a) Widow or Widower Till date of remarriage or death, whichever is earlier.
(b)Unmarried son/daughter/ widowed/divorced daughter Till date of marriage/remarriage or date of attaining the age of 25 years or starts earning more than Rs. 2550 p.m. death, whichever is earlier.
(c) Son(s) suffering from disorder or disability of mind or physically crippled. For life or till he starts earning more than Rs 2550 p.m.

(d) Daughter(s) including widowed/divorced daughter(s) suffering from disorder or disability of mind or physically crippled. For life or till she gets married or till she starts earning more than Rs 2550 p.m. (e) Dependent parent(s) Till death or starts earning more than Rs 2550 p.m.

I. Pension

Pension is admissible to permanent employees who retire with a qualifying service of not less than ten years. Temporary employees who retire on superannuation or invalidation after rendering not less than ten years of service or retire voluntarily after 20 years continuous service are also eligible for pension.

(A) A Government servant retiring in accordance with the provisions of the CCS (Pension) Rules, 1972 before completing qualifying service of ten years shall not be entitled to pension but he shall continue to be entitled to service gratuity in terms of Rule 49(1) of the CCS (Pension) Rule, 1972.
(B) Linkage of full pension with 33 years of qualifying service shall be dispensed with. Once a Government servant has rendered the minimum qualifying service of twenty years, pension shall be paid 50 % of the emolument or average emoluments received during the last 10 months, whichever is more beneficial to him.
(C) In cases where Government servant becomes entitled to pension on completion of 10 years of qualifying service in accordance with Rule 49(2) of the CCS (Pension) Rules, 1972, pension in those cases shall also be paid at 50% of the emoluments or average emoluments, whichever is more beneficial to the Government servant.
(D) The revised provisions for calculation of pension in para (B) and para (C) above shall come into force with effect from the date of issue of this O.M. and shall be applicable to Government servants retiring on or after that date. The Government servants who have retired on or after 1.1.2006 but before the date of issue of O.M. No. F.No.38/37/08-P&PW(A) dated 2.9.2008 will continue to be governed by the Rules/ orders which were in force immediately before coming into effect of these orders.
(E) The amount of pension shall be subject to a minimum of Rs. 3500/- and maximum upto 50% of highest pay in the Government (The highest pay in the Govt. is Rs. 90000 since 1.1.2006).
(F) The provisions of clauses (a) to (c) of sub -rule (2) of Rule 49 of the pension Rules shall stand modified to the extent mentioned in para (A) to para (E) above. The other provisions contained in Rule 49 shall continue to apply.
(G) The quantum of pension available to the old pensioners shall be increased as follows:-

Age of Pensioners	Additional quantum of pension
From 80 years to less than 85 years	20 % of basic pension
From 85 years to less than 90 years	30 % of basic pension
From 90 years to less than 95 years	40 % of basic pension
From 95 years to less than 100 years	50 % of basic pension
100 years or more	100 % of basic pension

Example:

Date of retirement . 31-1-2009 A/N
Qualifying service . (i) 33 Years
Pay Band and G.P. Drawn . From 01-04-2008 Rs. 23, 400
From 01-07-2008 Rs. 24, 110
Average Emoluments (01-04-2008 to 31-01-2009)
[Rs. 23,400 3 + Rs. 24,110 7] 10
(Rs. 70, 200 + Rs. 1,68,770) 10= Rs. 23,897.

Pension for qualifying service of 33 years:
50% of Average Emoluments, i.e., Rs. 23,897 50/100 = Rs. 11,948.50 or 11,949

or

50% of last pay drawn, i.e. Band Pay and Grade Pay = Rs. 12,055
Whichever is more beneficial Pension admissible = Rs. 12,055 p.m.

II. Gratuity

(A) The maximum limit of all kinds of gratuity shall be Rs. 10 lakh. Accordingly, first proviso under Rule 50 (1) (b) of Pension Rules shall stand modified to the effect that the amount of retirement gratuity or death gratuity payable under this Rule shall in no case exceed Rs. 10 Lakh

(B) Example
Band Pay plus Grade Pay (Rs. 20,000 + 5,400) . Rs. 25,400

(C) Dearness Allowance @ 16% of (Band Pay + G.P.) . Rs. 4,064

(D) Emoluments:
Band Pay + Grade Pay +Dearness Allowance, i.e. Rs. 20,000+5,400+4,064= Rs. 29,464.
Retirement Gratuity admissible in the case of an official who has put in-
(a) 33 years or more of qualifying service.
(b) 22 years of qualifying service
(a) Retirement Gratuity Rs. 29,464 66= Rs. 4,86,156
(b) Retirement Gratuity Rs. 29,464 45 = Rs. 3,31,470

ADDITION TO QUALIFYING SERVICE

(A) In view of revised provisions for computation of pension, the extant benefit of adding years of qualifying service for the purpose of computation of pension shall stand withdrawn with effect from the date of issue of this O.M Rules 29, 29-A, 30, 48-B and 48-C of the CCS (Pension) Rules, 1972 shall stand modified to this extent.

III. Family Pension 1964

(A) Family pension shall be calculated at a uniform rate of 30% of basic pay in all cases and shall be subject to a minimum of Rs. 3500/- p.m. and maximum of 30% of the highest pay in the Government. (The highest pay in the Govt. is Rs. 90,000 since 1.1.2006). Rule 54(2) relating to Family Pension, 1964 under Pension Rules shall stand modified to this extent.
(B) The enhanced family pension under Rule 54(3) (a) (i) shall be payable to the family of a Government servant who dies in service from the date of death of the Government servant for a period of ten years, without any upper age limit. Rule 54(3) (a) (i) shall stand modified to this extent. There will be no change in the period for payment of enhanced family pension to the family in the case of death of a pensioner.
(C) The quantum of family pension available to the old family pensioners shall be increased as follows:

Age of Pensioners	Additional quantum of pension
From 80 years to less than 85 years	20 % of basic pension
From 85 years to less than 90 years	30 % of basic pension
From 90 years to less than 95 years	40 % of basic pension
From 95 years to less than 100 years	50 % of basic pension
100 years or more	100 % of basic pension

Example
(A) A Central Government servant drawing Band Pay of Rs. 18,600 plus Grade Pay of Rs. 4,800 from 01-08-2008 died on 31-10-2008 while in service. His date of birth is 06-06-1949. His family is eligible for payment of family pension as detailed below:
(i) At enhanced rate from 01-11-2008 to 31-10-2018
(ii) At normal rate from 01-11-2018 onwards.

Family pension Normal Rate: –
30% of (Band Pay + Grade Pay) last drawn:
Rs. 23,400 30/100 = Rs. 7,020 p.m. subject to a minimum of Rs. 3,500 p.m.
Enhanced Rate: –
Twice the normal rate limited
To 50% of (Band Pay + Grade Pay)
Last drawn. Rs. 7,020 2= Rs. 14,040
Or
Rs. 23,400 50/100 = Rs. 11,700
Whichever is less, i.e. Rs. 11,700 p.m.
Dearness Relief will also be admissible on Family Pension
The family pension at enhanced rate is payable for a period of 10 years from the day following the date of death. This is applicable in the case of death in service taking place on or after 01-01-2006.

(B) A Central Government servant drawing Band Pay of Rs. 21,020 plus Grade Pay of Rs. 5,400 retired on superauuation on 30-09-2008, his date of birth being 10-09-1948. He was granted pension of Rs. 13, 210 p.m. He died on 12-10-2008. His family is eligible for the payment of family pension as detailed below:-
(i) At enhanced rate from 13-10-2008 to 09-09-2015 (Attains the age of 67 years on 09-09-2015)
(ii) At normal rate from 10-09-2015 onwards.

Family Pension:
Normal Rate:
30% of Band plus Grade pay Rs. 26,420 30/100 = Rs. 7,926 p.m.
last drawn subject to a minimum of Rs. 3,500 and maximum of Rs. 27,000 p.m.

Enhance Rate:
Twice the normal rate of Family Rs. 7,926 2 = Rs. 15,852 p.m.
Pension or 50% of Band Pay plus
Grade Pay last drawn or amount of or
Pension granted on retirement,
Whichever is the least. Rs. 26,420 50/100 =Rs 13,210 p.m.

Pension granted on retirement Rs. 13,210 p.m.

The family will be eligible for grant of family pension
From 13-10-2008 to 09-09-2015 @ Rs. 13,210 p.m.
From 10-09-2015 onwards Rs. 7,926 p.m.
Dearness Relief on family pension is admissible as per the rates prescribed from time to time.

IV. Commutation of Pension

(A) A Government servant shall continue to be entitled to commute for a lumpsum payment up to 40% of his pension.
(B) The existing Table of Commutation Value for Pension Annexed to the CCS (Commutation of Pension) Rules, 1981 shall be substituted by a new Table at Annexure I of this O.M.
(C) 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 O.M. In the case of those pensioners, in whose case commutation of pension became absolute on or after 01-01-2006 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 the date of issue of this OM, the revised Table of Commutation Value for Pension will be used for commutation of entire pension.
(D) Provisions of CCS (Commutation of Pension) Rules, 1981 shall stand modified in accordance with para (B) and (C) above.

Example
Amount of Pension offered for commutation = Rs. 1914
Age next birth day = 61 years
Commutation factor = 8.194
Commutation Value payable 1914 8.194 12 = Rs. 1,88,200

A: Check List for Pension Cases

1. Form 3 showing details of Family.
2. Form 5 Application for pension.
3. Form 7 Form for assessing Pension/Family Pension and Gratuity.
4. Form IA application for commutation of Pension.
5. Pension Calculation Sheet.
6. Two-specimen signatures duly attested by a Gazetted Govt. Servant or Two slips each bearing the left hand thumb and finger impressions duly attested in case the person is not literate to sign his name.
7. Permanent Residential Address.
8. Three copies of passport size joint photograph with wife or husband duly attested by the Head of the Office.
9. Nomination for DCRG/CGEGIS.
10. Two slips showing the particulars of height and personal identification marks duly attested by a Gazetted Govt. Servant.
11. Last Pay Certificate.
12. Service Book duly completed as on date of submission.
13. Vigilance Clearance Certificate.
14. All relevant documents countersigned by the Head of the Office in token of acceptance of the statement/ documents etc. are to be forwarded to the Communication Accounts Officer (Pension) along with a letter in Form 8.

B: Check List for Complete Family Pension Cases

1. Form 12 — Application for grant of death gratuity.
2. Form 14 Application for grant of Family Pension.
3. Form 18 For assessing and authorizing payment of family pension and death gratuity when a govt. servant dies while in service.
4. Service Book indicating date of death.
5. Calculation Sheet.
6. Final LPC.
7. Death Certificate.
8. Two specimen signatures or left hand thumb and finger impressions of the claimant or guardian (in case of minor) duly attested.
9. Two copies of passport size photograph of the claimant or guardian duly attested.
10. Two copies of descriptive roll of the claimant or guardian duly attested indicating height and personal marks.
11. Postal Address of the claimant.

	Central Govt. Retirees		BSNL Retirees
	A	B	A	B
1	Age next birthday	Commutation value expressed as number of years purchase	Age next birthday	Commutation value expressed as number of years purchase
2	20	9.188	17	19.28
3	21	9.187	18	19.20
4	22	9.186	19	19.11
5	23	9.185	20	19.01
6	24	9.184	21	18.91
7	25	9.183	22	18.81
8	26	9.182	23	18.70
9	27	9.180	24	18.59
10	28	9.178	25	18.47
11	29	9.176	26	18.34
12	30	9.173	27	18.21
13	31	9.169	28	18.07
14	32	9.164	29	17.93
15	33	9.159	30	17.78
16	34	9.152	31	17.62
17	35	9.145	32	17.46
18	36	9.136	33	17.29
19	37	9.126	34	17.11
20	38	9.116	35	16.92
21	39	9.103	36	16.72
22	40	9.090	37	16.52
23	41	9.075	38	16.31
24	42	9.059	39	16.09
25	43	9.040	40	15.87
26	44	9.019	41	15.64
27	45	8.996	42	15.40
28	46	8.971	43	15.15
29	47	8.943	44	14.90
30	48	8.913	45	14.64
31	49	8.881	46	14.37
32	50	8.846	47	14.10
33	51	8.808	48	13.82
34	52	8.768	49	13.54
35	53	8.724	50	13.25
36	54	8.678	51	12.95
37	55	8.627	52	12.66
38	56	8.572	53	12.35
39	57	8.512	54	12.05
40	58	8.446	55	11.73
41	59	8.371	56	11.42
42	60	8.287	57	11.10
43	61	8.194	58	10.78
44	62	8.093	59	10.46
45	63	7.982	60	10.13
46	64	7.862	61	9.81
47	65	7.731	62	9.48
48	66	7.591	63	9.15
49	67	7.431	64	8.82
50	68	7.262	65	8.50
51	69	7.083	66	8.17
52	70	6.897	67	7.85
53	71	6.703	68	7.53
54	72	6.502	69	7.22
55	73	6.296	70	6.91
56	74	6.085	71	6.60
57	75	5.872	72	6.30
58	76	5.657	73	6.01
59	77	5.443	74	5.72
60	78	5.229	75	5.44
61	79	5.018	76	5.17
62	80	4.812	77	4.90
63	81	4.611	78	4.65
64			79	4.40
65			80	4.17
66			81	3.94
67			82	3.72
68			83	3.52
69			84	3.32
70			85	3.13