Process for calculation of pension and other benefits

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Pension

An eligible service of at least ten years as a regular employee on any post of the State Government is compulsory for being eligible for pension. Service prior to the age of 20 years is not considered eligible for pension. With effect from 01-01-2006, eligible service of 20 years instead of 33 years is compulsory for eligibility of full pension. The calculation of eligible service is done by converting into six-month segments. 03 months is considered 01 six-month segment and 09 months is considered 02 six-month segments. With effect from 01-01-2006, pension is calculated on the basis of the average salary in the last ten months of eligible service on the date of the retirement, or the last basic pay on the date of retirement, whichever is beneficial to the employee. If the duration of the eligible service is less, then pension will be reduced in that proportion. Regular and eligible service of 10 years is compulsory for pension eligibility.

In case of eligible service being less than 10 years and more than 05 years, gratuity is applicable.

Formula for pension calculation :

Average basic pay of 10 months or last basic pay X 50/100 (whichever is beneficial)

Gratuity

For being eligible for gratuity, 5 years’ eligible service is compulsory. The amount of gratuity will be equal to 1/4 of the last drawn emoluments of each completed six-month segments of eligible service, with the maximum of 16-1/2 times. With effect from 01-01-2006, the maximum limit of gratuity will be not less than Rs 10,00,000/- (rupees ten lakh) instead of Rs 3,50,000/- (rupees three lakh fifty thousand).

Formula for gratuity calculation :

Last drawn pay X six-month segments of eligible service / 4 (including dearness allowance)

Commutation

As a result of the Fifth Pay Commission recommendations, with effect from 01 January 1996, 40 per cent portion of pension is permitted for commutation. This arrangement is optional, meaning thereby that this option must be given though pension form part-1. The calculation of commuted value of the pension is made according to the table effective from 01-01-2006 which has been issued vide the GO No Sa-3-1508/10-2008-308-97 dated 08 December, 2008 by Finance General-

Commutation table :

Age on the next birthdayCommutation valueAge on the next birthdayCommutation valueAge on the next birthdayCommutation value
1 2 3 4 5 6
20 9.188 41 9.075 62 8.093
21 9.187 42 9.059 63 7.982
22 9.186 43 9.040 64 7.862
23 9.185 44 9.019 65 7.731
24 9.184 45 8.996 66 7.591
25 9.183 46 8.971 67 7.431
26 9.182 47 8.943 68 7.262
27 9.180 48 8.913 69 7.083
28 9.178 49 8.881 70 6.897
29 9.176 50 8.846 71 6.703
30 9.173 51 8.808 72 6.502
31 9.169 52 8.768 73 6.296
32 9.164 53 8.724 74 6.085
33 9.159 54 8.678 75 5.872
34 9.152 55 8.627 76 5.657
35 9.145 56 8.572 77 5.443
36 9.136 57 8.512 78 5.229
37 9.126 58 8.446 79 5.018
38 9.116 59 8.371 80 4.812
39 9.103 60 8.287 81 4.611
40 9.190 41 8.194