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| Circular number | RBE 142/1997 |
|---|---|
| File number | No. PC-IV/87/Imp/PN/1 |
| Date | 1997-11-05 |
| Type | Rates Master Circular |
| Topic | ticket-checking |
| Currency | Historical — likely superseded |
pension, retiring pension, pension on absorption in or under a corporation or
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MASTER CIRCULAR
Master Circular No. 61
Commutation of Pension
In continuation of Master Circular No. 4, Master Circular No. 5 which brings out
provisions on the above subject is enclosed with this letter.
2. The circular is in two parts namely Part I and Part II. Part I deals with the extant
provisions on commutation of pension and Part II gives brief details of the orders
issued from time to time on the above subject.
3. The instructions referred to in the circular are both old and those current on the
subject. For dealing with the old cases, instructions in force at the relevant time be
referred to.
4. If any order current on the subject has been omitted the same should
nevertheless be treated as valid and operative.
PART - I
COMMUTATION OF PENSION
A railway servant shall be entitled to commute for a lumpsum payment a fraction
not exceeding one third of his pension and shall indicate fraction of pension which
he desires to commute and may either indicate maximum limit of one third or such
lower limit as he may desire to commute.
(Letter No. E 48 CPC/208 dated 08.07.1950)
##{The upper limit for commutation of one-third of pension has been raised to
40% of the pension w.e.f. 1.1.1996 in the case of Railway servants who
retired/retiring from service on or after 1.1.1996.}
[Letter No. F(E)III/97/PN 1/22 dated 05.11.1997 (RBE 142/1997)]
2. If a fraction of pension to be commuted results in fraction of rupee, such fraction
of a rupee shall be ignored for the purpose of commutation.
(Letter No. F(E)III 82 PN 1/3 dated 04.02.1986)
3. Personal pension sanctioned in the case of those retired on or after 05.05.1985
but before 01.01.1986 will not be taken into account for the purpose of determining
commuted value of pension and relief on pension.
[Letter No. PC-IV/87/Imp/PN/1 dated 15.04.1987 (RBE 90/1987)]
4. Commutation of pension to become absolute
4.1 The commutation of pension will be admissible in respect of the following types
of pensions:-
i. Superannuation pension
ii. Retiring pension
iii. Pension on absorption in or under a corporation or company and who elects
to receive monthly pension and retirement gratuity.
iv. Compensation pension on abolition of permanent post.
v. Pension in whole or in part on the finalisation of departmental or judicial
proceedings and issue of final orders thereon.
Provided that
a. In the case of applicant who is drawing his pension from a treasury or
Accounts Officer, the reduction in the amount of pension on account of
commutation shall be operative from the date of receipt of the commuted
value of pension or at the end of three months after issue of authority by the
Accounts Officer for the payment of commuted value of pension whichever is
earlier.
b. In the case of applicant who is drawing pension from a branch of a
nationalised bank, the reduction in the amount of pension on account of
commutation shall be operative from the date on which the commuted value
of pension is credited by the Bank to the applicants account to which pension
is credited.
c. In the case of an applicant in whose case the commuted value becomes
payable on the day following the date of his retirement, the reduction in the
amount of pension on account of commutation shall be operative from its
inception. Where however, the payment of commuted value of pension could
not be made within the first month from the date of retirement, the difference
of monthly pension for the period between the day following the day of
retirement and the date preceding the date on which the commuted value of
pension is deemed to have been paid shall be authorised by the Accounts
Officer.
4.2 In the case of applicant referred under item (v) of para 4.1 above, reduction in
the amount of pension shall be made from respective dates of payment as laid
down under provisos (a) & (b) of that para.
4.3 The date on which
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