Restoration of Commuted Portion of Pension

Considering the sweeping changes in the interest rates, and increase in life expectancy, a senior Citizen Welfare Society requested for Restoration of Commuted Portion of Pension to the Pensioners after 12 years of Commutation thereof

Restoration of commuted portion of pension after 12 years, instead of 15 years as at present

RAILWAY SENIOR CITIZENS WELFARE SOCIETY
(Estd. 1991, Regd. No. 1881 – Under Registration of Societies Act),
IDENTIFIED BY DOP&PW GOVT. OF INDIA – UNDER PENSIONERS’ PORTAL

MEMBER, SCOVA (STANDING COMMITTEE FOR VOLUNTARY AGENCIES)

No. RSCWS/HO/CHD/ Memo MOS P&PW/2022-25

Dated: 12-12-2022

Dr. Jitendra Singh,
Minister of State, Government of India,
Deptts. Of Personnel, Public Grievances & Pension,
North Block, New Delhi – 110001.

Respected Sir,

Sub: Restoration of Commuted Portion of Pension to Central Government Pensioners after 12 years of Commutation instead of 15 years as at present.

1) We draw kind attention of the Government and seek your benign intervention towards the injustice being done to the Central Government Pensioners in respect of Restoration of Commuted portion of Pension, being done after 15 years of the Commutation.

2. The 5th CPC, in para 136.10 recommended that the commutation value in respect of employees superannuating at the age of 60 years and commuting a portion of pension within a period of one year, would be equal to 9.81 years’ (purchase). After adding thereto a further period of two years for recovery of interest, it would be reasonable to restore the commuted portion of the pension after 12 years, instead of 15 years as at present.
3. These recommendations of the 5th Pay Commission were not implemented by the Government even though the rates of Interest have been drastically reduced over the years.
4. Life Expectancy: Average life expectancy between the period 2002-06 and 2013-17 increased by 5.7 years.

5. The interest on commuted value of pension is recoverable in 2.66 years. Take an 5. Example ,of a 60 years retiree; Age Next birthday is 61 years, then the commutation value is 8.194. Thus, total recovery period of the commuted amount is = 8.194 + 2.66 = 10.85 years. Even after full recovery, the pensioner keeps on paying for 15 – 10.85 = 4.15 years. Thus, excess recovery is taking place for 4.15 years. This is very unfair as the recovery of the commuted value of Pension is Completed in 10.85 years.

6. It is, therefore, requested that considering the sweeping changes in the interest rates, and increase in life expectancy, Commuted Portion of Pension may please be restored to the Pensioners after 12 years of Commutation thereof.

Yours’ truly,

(Harchandan Singh)

Secretary General, RSCWS

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