commutation

vamsi (Querist) 22 January 2014 This query is : Resolved
What is the meaning for commutataion which comes under the heads of salaried employee who is going to be retired

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Devajyoti Barman (Expert) 22 January 2014
academic query.

S.QAISAR ALI ADV. (Expert) 22 January 2014
commutation is that part of pension for which encashment is given to the employee i.e. 40%of basic pension amount.its rate is decided according to slab as pension rule.it is mandatory.

Guest (Expert) 22 January 2014
By commutation means the retiring employee can commute a portion of his pension, but not more than 40% of his basic pension, to take one time lump sum, as commuted value, in lieu of that part of monthly pension. After commutation of pension, the employee gets reduced pension by the amount in lieu of which he took the commuted value of pension. But, he receives dearness relief on full basic pay, as declared from time to time.

However, the pension is restored to full after expiry of 15 years from the date of retirement.