Now, full pension after 15 yrs of commutation post retirement

New Delhi: The labour ministry has notified the restoration of full pension after 15 years of retirement for pensioners who have commuted part of their pension at the time of retirement.

The move is expected to benefit 630,000 pensioners and substantially increase pensions for those members of the Employees Provident Fund Organisation (EPFO) who retired before September 26, 2008 & had opted for partial commutation of pension.

The higher or full pension benefit will be restored after 15 years from the date of receiving commuted pension at the time of retirement.

According to Employees' Pension Scheme, i.e., EPS rules, an EPFO member who retired before September 26, 2008, could get maximum one-third of his/her pension as lump-sum (commuted pension), while the remaining two-thirds was paid as monthly pension for his/her lifetime.

As per current EPF rules, EPFO members do not have an option to receive commutation benefit. EPFO administers EPF and EPS schemes and comes under labour ministry.

This will benefit such employees as it will lead to restoration of full (higher) pension after 15 years. For instance, an individual who retired on April 1, 2005, would be eligible to receive the benefit of higher pension after 15 years — from April 1, 2020.

The Central Board of Trustees of EPFO in a meeting on August 21, 2019 approved the proposal to restore the full monthly pension (for the above mentioned employees). “In a major decision, the Central Board of Trustees (EPFO's apex decision-making body) in a meeting held at Hyderabad on August 21, 2019, approved a proposal to recommend for amendment in EPS-95 for restoration of commuted value of pension to pensioners after 15 years of drawing commutation, which will benefit about 6.3 lakh pensioners,” the EPFO had said.