An important pension-related information has emerged for central government employees and pensioners. After retirement, employees have the option of receiving a portion of their monthly pension in one lump sum. This is called pension commutation. Under this facility, employees can receive 40% of their basic pension in one lump sum. The government has clarified the rules, medical examinations, and application deadlines for this purpose.

How to get lump sum 40 percent pension?

According to Rule 5 of the Central Civil Services (Pension Commutation) Rules, 1981, government employees can receive a maximum of 40% of their monthly pension in a lump sum. Employees also have the option of taking less than 40%.

For example, if an employee's basic pension is ₹50,000 and they commute 40% of their pension, they will receive a lump sum of ₹20,000. The monthly basic pension will then be ₹30,000. The lump sum amount depends on the employee's age, the commuted portion, and the specified commutation factor.

Full pension resumes after 15 years.
The most important rule regarding pension commutation is that pension deductions stop after 15 years. According to Rule 10-A, the commuted portion is added back to the pension after 15 years from the date when the deductions began. That is, an employee with a basic pension of Rs 50,000 is receiving Rs 30,000 after commutation, but after 15 years, he or she will start receiving a basic pension of Rs 50,000.

PC: ABP News