234 Guide to Calculating Pension & Commutation for Government Employees 🏛️

234 - How to calculate pension and commutation of pension

Calculating pension and the commutation of pension is crucial for government employees planning retirement. The pension is generally 50% of the last drawn basic pay, including Dearness Allowance (DA), while the commutation allows a lump sum withdrawal of up to 40% of the basic pension.

Pension Formula:
Monthly Pension = (Basic Pay + DA) × 50%

Commutation Formula:
Commuted Pension = Basic Pension × 40% × Commutation Factor × 12
(Commutation Factor is based on the retiree's age at retirement as per government tables.)

After commutation, the reduced pension is payable for 15 years, after which the full pension is restored. Learn how to calculate your exact pension and commutation with examples.

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