An employee or officer retires from the bank with the benefit of superannuation pension, or voluntary retirement pension, or premature retirement pension, or compulsory retirement pension, or invalid pension or compassionate allowance shall be entitled to commute for a lump sum payment of a fraction not exceeding one-third of his pension. Also, the family of a deceased employee who is governed by subregulation (5) of regulation 3, of Pension Regulations, shall also be entitled to commute for a lump sum payment of fraction not exceeding one-third of the pension admissible to the employee. The commuted portion of the pension will be restored after the expiry of a period of fifteen years from the date of commutation. While commuting a fraction of basic pension, an employee shall indicate the fraction of pension which he desires to commute and may either indicate the maximum limit of one-third pension or such a lower limit as he may desire to commute. The fraction of commutated pension in Rupee is ignored for lump sum payment.
The commuted value of pension becomes payable on the day following the date of his retirement or from the date from which the commutation becomes absolute; the reduction in the amount of pension on account of commutation shall become operative from its inception. However, when payment of the commuted value of a pension could not be made within the first month after the date of retirement or within the first month after the date when the commutation becomes absolute, as the case may be, the difference between the normal monthly pension and commuted pension shall be paid for the period between the date on which commutation becomes absolute and the date preceding the date on which commuted value of the pension is deemed to have been paid.
In case a pensioner applies for commutation of pension after one year from the date of his retirement, the same will be permitted subject to a medical examination. However, in the case of an applicant who is in receipt of a provisional pension as in Regulation 46 and for whom pension in whole or part of the finalisation of the departmental or judicial proceedings has been authorized, a period of one year referred to in sub-Regulation shall reckon from the date of issue of the orders consequent upon the finalisation of the departmental or judicial proceedings.
The lump sum payable to an applicant shall be calculated in accordance with the Table given below:
*Commutation Values for a pension of Re. One per annum
# Commutation value expressed as the number of year’s purchase
|Age Next Birthday||17||18||19||20||21||22||23||24||25|
|Age Next Birthday||26||27||28||29||30||31||32||33||34|
|Age Next Birthday||35||36||37||38||39||40||41||42||43|
|Age Next Birthday||44||45||46||47||48||49||50||51||52|
|Age Next Birthday||53||54||55||56||57||58||59||60||61|
|Age Next Birthday||62||63||64||65||66||67||68||69||70|
|Age Next Birthday||71||72||73||74||75||76||77||78||79|
|Age Next Birthday||80||81||82||83||84||85|
The commuted value in the case ofan employee retiring at the age of 60 years is 9.81* years purchase and, therefore, if he commutes rupees one hundred from his pension within one year of retirement, the lump sum amount payable to him works out to Rs. 100×9.81×12 = Rs.11772. (* It means if an employee retires on superannuation (completion of 60 years), the commutation value applicable to him/her will be as applicable to the next birthday i.e. applicable to the age of 61 years).