Commutation of Pension Rules, Chapter-II : General Conditions

Commutation Rule No.4 : Delegation Of Powers

The powers conferred by these rules shall be exercised by the authorities competent to sanction pensionary benefits to a railway servant as specified in Rule 89 of the Railway pension Rules.

Commutation Rule No.5: Restriction On Commutation Of Pension

No railway servant against whom any departmental or any judicial proceedings as referred to in rule 9 of the Railway Pension Rules, have been instituted before the date of his retirement, or the pensioner against whom such proceedings are instituted after the date of his retirement, shall be eligible to commute a percentage of his provisional pension authorized under rule 10 of the Railway Pension Rules or the pension, as the case may be, during the pendency of such proceedings.

[Authority: RBE No.16/2005, No.F(E)III/2003/PN1/25, 24.01.2005 and,

RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]

Commutation Rule No.6: Limit On Commutation Of Pension

(1)   Subject to the provisions of these rules, a railway servant shall be entitled to commute for lump sum payment of an amount not exceeding forty percent of his pension. [Authority: RBE No.16/2005, No.F(E)III/2003/PN1/25, 24.01.2005].

(2)   In an application for commutation in Form 8 of the Railway Services (Pension) Rules, 1993 or in Form 1 or Form 2 or Form 3 of these rules as the case may be, an applicant shall indicate the percentage of pension which he desires to commute and shall indicate the maximum limit of forty percent of pension or such lower limit as he may desire to commute.

[Authority: RBE No.16/2005, No.F(E)III/2003/PN1/25, 24.01.2005 and, RBE No.113/2015, No.2015/F(E)III/1(2)/8, 22.09.2015]

(3)   If percentage of pension to be commuted results in fraction of rupee, such fraction of rupee, such fraction of a rupee shall be ignored for the purpose of commutation.

[Authority: RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]

Commutation Rule No.7: Commutation of pension to become absolute

(1)     The commutation of pension shall become absolute in the case of an applicant referred to:-
(i)   In sub-rule (1) of rule 14 on the date on which the application in Form 1 is received by the Head of Office;
(ii) In sub-rule (3) of rule 14 on the date following the date of retirement of the applicant;
(iii) In Chapter IV, on the date on which the medical authority signs the medical report in Part III of Form 5.
Provided that:-
(a)    In the case of an 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 an applicant who is drawing pension from a branch of a Nationalized bank or Post Office, 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 applicant’s account to which pension is being credited; and
(c)      In case of an applicant governed by sub-rule (3) of rule 14 in whose case the commuted value of pension 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 payment of commuted value of pension could not be made within the first month after the date of retirement, the difference of monthly pension for the period between the day following the date of retirement and the date preceding the date on which the commuted value of pension is deemed to have been paid in terms of rule 49 of the Central Government Accounts (Receipts and Payments) Rules, 1983, shall be authorized by the Accounts Officer.
(2)     In the case of an applicant referred to in rule 10 or rule 11 the commuted value is paid in two or more stages. The reduction in the amount of pension shall be made from the respective dates of the payments as laid down in clause (a) or clause (b) of the provision to sub-rule (i).
[Authority: RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]
(3)     The date on which the payment of the commuted value of pension was credited to the applicant’s account shall be entered in both halves of the pension payment order by the disbursing authority under intimation to the Accounts Officer who authorized the payment of commuted value of pension.

Commutation Rule No.8: Nominations

1. An applicant shall make a nomination in Form 6 along with the application referred to in rule 14 or rule 20, as the case may be, conferring on one or more persons the right to receive the commuted value of pension in case the applicant dies without receiving the commuted value on or after the date on which commutation became absolute.
2.  If there is no such nomination, or if the nomination does not subsist, the commuted value shall be paid to the family in the manner indicated in clause (a) of sub-rule (1) of Rule 71 of the Railway Pension Rules.
3. If in any case the commuted value cannot be paid in the manner indicated in sub-rules (1) and (2), the same shall be paid to his heirs.Commutation Rule No.9: Calculation of commuted value of pension

Commutation Rule No.9: Calculation of commuted value of pension

The lump sum payable to an applicant shall be calculated in accordance with the Table of the values in Appendix applicable to the applicant on the date on which the commutation becomes absolute.

Commutation Rule No.10: Commutation of provisional pension

(1)   A railway servant to whom, pending assessment of final pension, provisional pension has been sanctioned under rule 91 of the Railway Pension Rules, shall be eligible to commute a fraction of such provisional pension subject to the limit specified in rule 6.

(2)   For the purpose of commutation of provisional pension, the provisions of Chapter III or Chapter IV as the case may be, shall apply.

(3)   The provisions of this sub-rule shall apply to an applicant who for the purpose of commutation of provisional pension is governed by Chapter IV.

(i)    Where an applicant desires to commute a percentage of his provisional pension which works out to be not exceeding Six thousand rupees per mensem and in whose case it is expected that the amount which he would be entitled to commute when the final amount of pension has been authorized would exceed Six thousand rupees per mensem, his application shall be deemed, for the purpose of rule 23, to be for commutation of amount exceeding Six thousand rupees per mensem.

(ii)(a) Where the applicant does not indicate the possibility of his entitlement to commutation of pension exceeding Six thousand rupees per mensem on the determination of final pension due to him, he shall be treated as having applied for commutation of pension not exceeding one hundred rupees per mensem.

(b) If one the determination of final pension, the applicant becomes entitled to commute his pension up to Six thousand rupees per mensem, he shall not be required to undergo medical examination for payment to him of the difference between the commuted value of the pension originally commuted and the pension commuted subsequently.

(c) If on the determination of final pension, the applicant becomes entitled to commute a sum exceeding Six thousand rupees, he shall, for commutation of pension exceeding rupees Six thousand, be required to apply afresh in Form 2.

[Authority: RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]

Commutation Rule No.11: Retrospective revision of final pension

An applicant who has commuted a percentage of his final pension and after commutation his pension has been revised and enhanced retrospectively as a result of Railway Board’s decision, the commuted value determined with reference to enhanced pension and the commuted value already authorized. For the payment of difference the applicant shall not be required to apply afresh:

Provided that in the case of an applicant who has commuted a percentage of his original pension not exceeding Six thousand rupees after being declared fit by a Civil Surgeon or a District Medical Officer and as a result of retrospective enhancement of pension, he becomes eligible to commute an amount exceeding Six thousand rupees per mensem, he shall be allowed the difference between the commuted value of Six thousand rupees per mensem and the commuted value of the percentage of the original pension without further medical examination. The commutation of any further amount beyond Six thousand rupees per mensem shall be treated as fresh commutation and allowed subject to examination by a Medical Board.

[Authority: RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]

Commutation Rule No.11A: Restoration Of Commuted Pension

The commuted amount of pension shall be restored on completion of fifteen years from the date the reduction of pension on account of commutation becomes operative in accordance with the provisions of rule 7:

Provided that when the commutation amount was paid on more than one occasion on account of upward revision of pension, the respective commuted amount of the pension shall be restored on completion of fifteen years from the respective date(s).

[Authority: RBE No.151/2013, No.2011/F(E)III/1(2)/13, 14.01.2013]