Unjust commuted pension recovery: Retired employees face extended 15-year commutation recovery period

Retired employees continue to face a 15-year recovery period for commuted pensions, despite recommendations for a 12-year recovery, as practiced in states like Kerala and Gujarat. A revised commutation factor since 2010 has reduced lump-sum payouts, yet the recovery duration remains unchanged, raising concerns of unfair treatment.

By Manohar Rao Chilappagari

Hyderabad: Generally all employees will commute 40% of their pension at the time of retirement and will get a lump sum amount in lieu thereof as per the existing rules in force. The commuted amount is recovered from the pension every month for a period of 15 years i.e.,180 months from the incumbent.

The 15 years recovery is based on certain factors inflation, mortality rate, life expectancy and also basing on Commutation factor. During the year 2008, the Government of India have revised the commutation tables which were in existence for a long period. The same tables were adopted in Telangana (the then AP) in 2010.

Earlier the commutation factor was 10.46 up to January 2010 from February 2010 onwards it is 8.371, even though the commutation factor is decreased but the recovery period remained the same. The persons who retired before 2010 will get higher amount than the persons who retired after 2010 due to this revised commutation factor.

And the recovery period from his pension remains the same. That is 15 years for the persons who retired before 2010 and also for the persons who retired after 2010. Actually the committed value of pension is recoverable in 128 months only but it is being recovered in 180 months which is unjust and irrational.

As noticed in several States the recovery period is between 12 to 13 years only. In Kerala it is 12 years, while in Madhya Pradesh and Gujarat it is 13 years. Particularly in Kerala. 12 years recovery is in existence from several decades.

The 5th Central Pay Commission (CPC) has recommended decades ago that the recovery period should be 12 years only.

Unfortunately this was not considered by the Government of India till to date. Recently, the Second Judicial Commission headed by Supreme court judge and members have also opined that the recovery period shall be 12 years, which is fair and rational.

Due to the inaction of the Governments, certain retired Government employees have knocked the doors of the court of law wherein the High court of Chandigarh passed interim orders staying the recovery of commuted value of pension.

Last week the Haryana Government have issued instructions to the Accountant General and Treasury officers not to recover commuted value of pension for those who have completed 10 years recovery.