Pension commutation: Over 6 lakh pensioners to gain from Labour Ministry's latest notification

As many as 6.3 lakh pensioners covered under the Employee Provident Fund Organisation (EPFO) will now see a rise in their monthly pension amount. Full pension after 15 years of retirement will be restored for pensioners as per a Labour ministry notification, according to a report in The Economic Times.

Those people who retired prior to September 26, 2008, and opted for a partial commutation of their pension will now get the full pension benefit, the report noted. This higher pension will be applicable 15 years from the time when the pensioners received their commuted pension post-retirement.

Currently, under the EPF rules, pensioners do not have the option of the commutation benefit. However, the earlier EPF rules allowed EPFO members who retired before September 26, 2008, to receiver a third of their pernsion as lumpsum. While the remaining amount was disbursed to the person as monthly pension for their lifetime.

So basically for those employees who had sought the commuted pension earlier, the new notification would mean a higher pension amount than they would have otherwise received.

For the restoration of the full monthly pension, the proposal was approved by the EPFO in August last year.