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Currently, the commuted amount is recovered over a period of 15 years, after which the full monthly pension is restored. With the proposed 12-year recovery period, pensioners could begin receiving their full pension three years sooner, improving their financial stability during retirement. This interest rate on commuted value of pension is recoverable in 2.66 years. The Commuted Factor on the Next birthday after superannuation is 61 years, and the commutation value is 8.194 . Thus, total recovery period of the commuted amount is = 8.194 + 2.66 = 10.85 years. Even after full recovery, the pensioner keeps on paying for 15 years and thus he goes on to pay additionally for more than 4 years. (15 years minus 10.85 = 4.15 years). Thus, excess recovery is taking place for 4.15 years ... As per Rule 10A of the CCS (Commutation of Pension) Rules, 1981, commuted portion of pension is restored after 15 years from the date of the receipt of the commuted value of the pension. The Supreme Court considered all the relevant factors like interest rate, mortality rate etc. and the commutation table in existence in 1986 and gave a decision that the commutation period should be fixed at 15 years.
