8th Pay Commission Pension– Big relief for pensioners. It is an old demand of the central government employees and pensioners that the period of pension commutation should be reduced from 15 years to 12 years. Commutation means that a part of the pension is taken as a lump sum and later the pension is received a little less. Employees say that the government recovers this money along with interest in about 11 years, yet the period for deduction of pension has been kept at 15 years. Therefore, it would be appropriate to make it 12 years.
Discussion in 8th pay commission
Now this issue has again become a part of the discussion of the 8th Pay Commission. Employee organizations are raising this demand loudly before the Commission’s Terms of Reference (ToR) is finalized. If this suggestion is accepted, retired employees can start getting their full pension early and they will get financial relief.
What is pension commutation?
Let us tell you that at the time of retirement, central employees can choose to take a maximum of 40% of their pension in lump sum. This is called ‘pension commutation’. In return, their monthly pension is reduced by that percentage. But, under the current rules, this reduced pension is restored after 15 years. Let us tell you that the Fifth Pay Commission allowed employees to commute from one-third to 40% of their pension.
Also, the commission had also recommended that the commutation pension should be restored in 12 years. But the government did not accept this suggestion and continued the period of 15 years. The subsequent Sixth and Seventh Pay Commissions did not consider it necessary to suggest any change in this rule.