Retirement Benefits

The minimum period of eligibility to receive pension benefits will be 10 years. An Central Government servant retiring in conformity with the Pension Rules is eligible to receive pension upon the the completion of at the minimum of 10 years of qualifying service.

If the pension is a Family Pension widows are entitled to receive family pension upon loss of the spouse following the completion the one-year period of continuous service , or before the end of a year, when the government employee has passed a medical examination by the proper Medical Authority and declared fit to be employed by the Government.

W.e.f 1.1.2006 1.1.1.2006, pensions are calculated based on Emoluments (i.e.last base salary) as well as average earnings (i.e. an average of the basic pay earned over the course of the last 10 months of service) or whichever is more profitable. Pension is equal to 50% of earnings or the average of the emoluments, whichever is the most beneficial.

The minimum pension currently is at present Rs. 9000 per month. The maximum pension amount is 50 percent of the highest salary within India. Government of India (presently Rs. 1,25,000) per month. Pensions are payable until and including the anniversary of your death.

Commutation of Pension

An Central Government servant has an option of converting some of their pension that is not more than 40% in an amount that is lump sum. Medical examinations are not required when you exercise the choice within a year after retirement. When the choice is exercised after the expiration for a year the individual must undergo a medical examination conducted by the authorized authority.

Lump amount due is calculated by an eye on the Commutation Table. The monthly pension will be reduced by the commuted portion and the portion that is commuted will be reinstated at the expiry date of 15 years from the date of the receipt of the value of the commuted pension. Dearness Relief will be calculated in accordance with the pension originally paid (i.e. with no reduction in the commuted portion).

The formula to arrive at the value of pension that is commuted (CVP) is

CVP = 40 % (X) Commutation factor* (X)12

* The commutation percentage will be determined by age on the date when commutation becomes absolute, as per the New Table annexed to the CCS (Commutation of Pension) Rules of 1981.

Death/Retirement Gratuity

Retirement Gratuity

The benefit is payable to the retired government employee. Minimum of five years of qualifying service and the ability to be eligible for service gratuity/pension is necessary to qualify for this one-time cash benefit. Retirement gratuity is calculated at 1/4th of the Month's Basic Pay and Dearness Allowance. It is calculated on the day of retirement for each six-month period of service that qualifies as qualifying. There is no minimum amount on how much gratuity you can receive. The amount of retirement gratuity to those who have served in the qualifying period that is 33 years old or more amounts to 16 1/2 times Basis Pay plus DA with a maximum limit of 20 lakhs. 20 lakhs.