What percentage of the pension can be commuted?

According to the rules, up to 40% of the basic pension can be commuted.

How does the restoration period of commuted pension affect retirees?

The restoration period is the time it takes for the full pension to be restored after the commuted portion is paid. Currently, it's 15 years, but there’s a proposal to reduce it to 12 years.

How do I calculate the commuted pension deduction?

Multiply the commuted amount by itself and then by 12 to get the total commutation amount. Divide the pension amount by the commuted percentage to find the commuted amount.

What should I do if I have queries about my commuted pension?

For queries and assistance, call the toll-free number 1800-11-1960 or email care.dppw@nic.in.

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What Is The Commuted Pension And Will It Be Restored?

Q: What is a commuted pension?

A commuted pension allows retirees to receive a lump sum payment of a portion of their pension in advance, rather than waiting for regular monthly payments.

Pragya Pathak

Author

Updated: 21-10-2025 at 5:30 PM

The National Council of Joint Consultative Machinery (JCM) sent the Centre a proposal to reduce the restoration of commuted pension after 15 years calculator to 12 years. This proposal has been put forward to the Centre multiple times before by several central staff unions and other bodies engaged in employee welfare issues.

Shiva Gopal Mishra, the Secretary of the National Council of Joint Consultative Machinery (JCM), wrote a letter to PM Narendra Modi, submitting 14 demands covering different issues faced by government employees. The main demand was to cut the restoration time period of the commuted pension to 12 years instead of 15 years.

In this article, you will get the detailed information about the Employees commuted pension in India, rules of commuted pension, its benefits, how commuted pension is recovered and much more.

Overview

Before understanding the proposal, it’s important to know what an Employees commuted pension is and how the restoration period affects retirees. The table below gives a quick summary of the ongoing demand and the related rules.

Particulars	Details
Proposal Raised By	National Council of Joint Consultative Machinery (JCM)
Submitted To	Government of India / Prime Minister Narendra Modi
Main Demand	Reduce the restoration period of the commuted pension from 15 years to 12 years
Current Rule	Restoration of commuted pension after 15 years calculator
Suggested Change	Restoration after 12 years
Governing Rules	CCS (Commutation of Pension) Rules, 1981
Key Authority Involved	Department of Pension and Pensioners’ Welfare
Purpose	To provide financial relief and fair treatment to retired government employees

Latest News

Reports suggest that the Department of Pension and Pensioners’ Welfare (DoPPW) is reviewing representations and may use data from the Restoration of commuted pension after 15 years Calculator and the Commutation calculation Table to evaluate the feasibility of the proposed change.

If approved, this revision would directly affect lakhs of central government pensioners and could also set a precedent for state-level pension reforms in India. Employee unions believe this will make the Commutation of pension Rules more equitable and responsive to current life expectancy trends and inflationary pressures.

Also Read: Old Age Pension Scheme | Check Vridha Pension Scheme List and Apply Online

What Is A Commuted Pension?

Employees and taxpayers contribute a portion of their salaries every month to an annuity fund. This fund is distributed back to the employees at the time of retirement. It is very important to understand the Commutation calculation Table before making any decision regarding retirement plans.

Employees commuted pension in India means is when an employee retires, they can choose to get a portion of their pension in advance. This is known as a commuted pension. Let’s understand it better with an example.

An employee of age 60 decides to retire and chooses to receive 10% of their monthly pension for the next 10 years in advance. This sum of money that is chosen to be retrieved in advance is known as a commuted pension.

What Are The Commutation Of Pension Rules?

Two set rules have to be followed to receive the commuted pension. Let’s take a look at the two rules of the Employees Commuted Pension Calculator.

According to Rule 5 of CCS (Commutation of pension) Rules, 1981, a government servant/employee can commute a lump sum payment of up to 40% of their basic pension.
Rule 10 says that if the government revises or enhances a pensioner's pension after commutation, the applicant will receive the difference between the authorised and enhanced commuted pension.

Benefits Of Commuted Pension

A commutation of pension calculator offers several advantages that provide both financial security and flexibility to retirees. Let’s understand them in detail:

Immediate Financial Support: It provides a lump-sum amount at the time of retirement, helping employees meet urgent needs like medical treatment, loan repayment, home repair, or family functions.
Financial Flexibility: Pensioners can plan their post-retirement expenses better since they receive a significant portion of their pension in advance.
Reduced Dependence on Loans: Since retirees get an advance lump sum, they can avoid taking high-interest loans after retirement.
Investment Opportunities: The commuted amount can be used for safe investments like fixed deposits or senior citizen savings schemes, which generate steady income.
Tax Relief and Long-Term Planning: Depending on eligibility, certain tax exemptions may apply to the commuted portion of the pension under the Income Tax Act, helping pensioners plan their finances efficiently.
Sense of Security: It gives mental peace knowing that funds are available immediately for unforeseen needs.

Overall, the Commutation of pension Rules ensures that government employees enter their retired life with greater financial confidence and independence.

Also Read: Comparing India’s Pension Schemes: Delving Into The Differences Between OPS, NPS, & The New UPS

How To Calculate The Commuted Pension Deduction?

Commutation of Pension Calculator, communication and gratuity of central government employees can be done as follows.

Multiply the commuted amount by itself and then by 12. This is the total commutation amount.
The commuted amount is received by dividing the pension amount by the commuted percentage of the pension.

Conclusion

The demand to reduce the restoration period of commuted pension from 15 years calculator to 12 years has once again brought attention to the long-standing issues retired government employees face. Implementing this proposal would allow pensioners to enjoy their full pension benefits earlier, offering much-needed financial stability during their later years.

By revising the restoration rule and making a Commutation calculation Table, the government can make retirement life more comfortable and respectful for those who have served the nation for decades.

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