RSCWS demands restoration of commuted part of the pension after 12 years

In a letter to Dr Jitendra Singh, Minister of State for Personnel, Public Grievances & Pension, the RSCWS demanded that Central Government Pensioners receive their restored commutated portion of their pension after 12 years of commutation rather than the current 15 years. The 5th Pay Commission (CPC) recommended that the commutation value in respect of central government employees superannuating at the age of 60 years and commuting a portion of pension within a period of one year, would be equal to 9.81 years' (purchase) Average life expectancy between the period 2002-06 and 2013-17 increased by 5.7 years.

RAILWAY SENIOR CITIZENS WELFARE SOCIETY
(Estd. 1991, Regd. No. 1881 – Under Registration of Societies Act),
IDENTIFIED BY DOP&PW GOVT. OF INDIA – UNDER PENSIONERS’ PORTAL
MEMBER, SCOVA (STANDING COMMITTEE FOR VOLUNTARY AGENCIES)

No. RSCWS/HO/CHD/ Memo MOS P&PW/2022-25

Dated: 12-12-2022

Dr Jitendra Singh,
Minister of State, Government of India,
Deptts. Of Personnel, Public Grievances & Pension,
North Block, New Delhi – 110001.

Respected Sir,

Sub: Restoration of Commuted Portion of Pension to Central Government Pensioners after 12 years of Commutation instead of 15 years as at present.
1) We draw the kind attention of the Government and seek your benign intervention towards the injustice being done to the Central Government Pensioners in respect of the Restoration of Commuted Portion of Pension, being done after 15 years of the Commutation.

2. The 5th CPC, in para 136.10 recommended that the commutation value in respect of employees superannuating at the age of 60 years and commuting a portion of pension within a period of one year, would be equal to 9.81 years’ (purchase). After adding thereto a further period of two years for recovery of interest, it would be reasonable to restore the commuted portion of the pension after 12 years, instead of 15 years as at present.

3. These recommendations of the 5th Pay Commission were not implemented by the Government even though the rates of Interest have been drastically reduced over the years.

4. Life Expectancy: Average life expectancy between the period 2002-06 and 2013-17 increased by 5.7 years.

Year    Life Expectancy
2002-06    64.7 years
2003-07    65.0 years
2004-08    65.4 years
2005-09    65.7 years
2006-10    67.7 years
2007-11    66.5 years
2008-12    67.0 years
2009-13    67.5 years
2010-14    67.9 years
2011-15    68.3 years
2012-16    68.7 years
2013-17    70.4 years
2014-18    69.4 years
5. The interest on commuted value of the pension is recoverable in 2.66 years. Take an Example, of a 60 years retiree; the Age Next birthday is 61 years, then the commutation value is 8.194. Thus, the 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 – 10.85 = 4.15 years. Thus, excess recovery is taking place for 4.15 years. This is very unfair as the recovery of the commuted value of the Pension is Completed in 10.85 years.

6. It is, therefore, requested that considering the sweeping changes in the interest rates, and increase in life expectancy, Commuted Portion of Pension may please be restored to the Pensioners after 12 years of Commutation thereof.

Yours truly,

(Harchandan Singh)
Secretary General, RSCWS