# How To Calculate Pension And Commutation?

Exercise regiment that works Purchase value for age next birth day multiplied by 12 times the amount of pension to be converted equals the Commuted Value of pension.
Commutation is used in the model calculation.

Post Class – II
Amount of commutation 2337 X 12 X 8.194
229792.54 Say Rs. 229793/-
Commuted value of Pension Rs. 229793/- payable on or after 01.05.2011

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## What is the formula for pension calculation?

Average Salary * Pensionable Service / 70, where Average Salary is the average of the Basic Salary + DA combined, drawn in the previous 12 months, and Pensionable Service is the number of years of pensionable service. The number of years worked in the organized sector after the 15th of November, 1995, is referred to as pensionable service.

## What is a pension commutation example?

The term “commuted pension” refers to a pension that is received in advance. Imagine you are 60 years old and elect to get Rs 10,000 in advance each month for the next ten years in exchange for receiving 10 percent of your monthly pension. This will be paid to you in one single payment at the end of the year. Consequently, your commuted pension is equal to 10 percent of Rs 10,000 multiplied by 12 times 10 equals Rs 1,20,000.

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## What is the rule for commutation of pension?

A Central Government employee has the option of converting a portion of his or her pension, up to a maximum of 40% of his or her total pension, into a lump sum payment. It is not necessary to have a medical examination if the option is used within one year of retirement.

## How do you calculate commutation factor?

The commutation factor is equal to the maximum PCLS divided by (scheme pension minus reduced pension).

## What is commutation rate?

It is the amount of money that a beneficiary is entitled to receive as a lump sum payment upon retirement from a pension plan that is known as the commuted value. This amount is predicted based on a variety of criteria, including the beneficiary’s expected life expectancy in the future.

## What is interest rate on commutation?

With effect from January 1, 1996, the amount of permissible commutation was increased from one-third to forty percent of the base wage. The Commutation Factor (CF) was reduced from 10.46 to 9.81 as a result of this. The rate of interest was 4.75 percent per annum for those who retired between the ages of 1.1 and 1.2.

## How many times can a pension be commuted?

An EPFO member who retired before September 26, 2008, could receive up to one-third of his or her pension as a lump sum (commuted pension), with the remaining two-thirds being paid as monthly pension for the rest of his or her life, according to the rules of the Employees’ Pension Scheme, also known as the EPS.

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## How is a pension lump sum calculated?

If you want to determine your percentage, multiply your monthly pension amount by 12 and then divide that number by the lump sum amount. Let’s have a look at the following case. Your pension is \$1,000 every month for the rest of your life, or you can choose for a \$160,000 buyout. You can figure out the percentage by doing the arithmetic (\$1,000 x 12 = \$12,000/\$160,000).

## How is pension and commutation calculated in Pakistan?

The last salary drawn* multiplied by 7/300x the period of service of the dead government employee. Include any and all emoluments that are eligible for pension. Gross pension multiplied by a quarter multiplied by twelve (Index from commutation table, according to age next birthday of the deceased).

## Is pension commutation a good idea?

The last salary drawn* multiplied by 7/300x the period of service of the deceased government employee All compensation that is eligible for pension should be included. x1/4 x12x = gross pension (Index from commutation table, according to age next birthday of the deceased).