Pension: Clarification on Payment of Commuted Value of Pension

Payment of Commuted Value of Pension –Clarification on Payment of Commuted Value of Pension

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
Accounting Office

TRIKOOT-I, BHIKAJI CAMA PLACE,
NEW DELHI-110066

CPAO/IT & Tech/Clarification/Vol-IV (P.F)(13)/21-22/125

17.06.2021

Office Memorandum

Subject- Clarification on Payment of Commuted Value of Pension

It has been observed that the procedure for the payment of commuted value of pension is not being strictly adhered to by the Pay and Accounts Offices and the Paying Branches of the Authorized Banks for payment of pensions. All the CPPCs of the Authorized Banks and Pay & Accounts Offices are directed to sacrosanctly follow the procedure for the payment of commuted value of pension mentioned in the “Scheme for payment of pensions to Central Government Civil Pensioners through Authorized Bank, Civil Accounts Manual, and CCS Pension Rules. The procedure for payment of commuted value of pension is re-iterated as under-

1. The case in which Government servants retiring on superannuation may desire authorization for payment of the commuted value of the pension at the time of the issue of the PPO-

a. The Accounts Officer after necessary verification shall authorize the Head of Office to draw the amount of commuted value of pension on submission of a bill to him and hand over the cheque/draft superscribed ‘Not payable before the……… (date following the date of retirement) to the pensioner.

b. The Account Officer shall indicate in both the halves of the PPO- gross pension, amount of pension commuted and the fact that the commuted value of pension has been authorized separately through DDO.

c. The Account Officer shall make a note of payment of the commuted value of pension having been made to the retiring Government servant in his Service Book.

2. The case in which the pensioner who has been drawing pension through the bank and has not been paid commuted value of the pension by the Head of the Office on the authorization issued by the Accounts Officer-

a. The payment in such case will be made by the bank.

b. This will be done on the receipt of authorization from PAO of the / Ministry/Department or the Accounts Officer of the UT Government/Administration through a separate authority letter as shown in Annexure I (enclosed) of the CAM.

c. The payment authority will be communicated to the concerned paying branch through CPAO in accordance with the procedure indicated in the Scheme of Payment of Pensions to the Central Government Civil Pensioners by authorized banks.

d. As per Para 20 of the Scheme Booklet, the paying branch on the receipt of the paying authority will arrange immediate payment of the amount payable by crediting the same to the account opened by the pensioner for payment of pension under intimation to the pensioner.

(Para 7.8.3 of Civil Accounts Manual read with
Appendix 1 of CCS Pensions Rules)

This issues with the approval of the Chief Controller of Pensions.

(Satish Kamar Garg)
(Sr. Accounts Officer (IT & Tech)

Source: CPAO

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