March 30, 2012

Home » , » How to calculate Pension,DCRG,Commutation etc...

How to calculate Pension,DCRG,Commutation etc...

Written By Admin on Mar 30, 2012 | March 30, 2012

Types of Pension Cases 
            (1)       Superannuation
            (2)       Family Pension
            (3)       Voluntary Retirement (VR )
(i)           The qualifying service for evaluation of pension is reduced to 10 years w.e.f. 02 09.2008. Earlier it was 33 years.

(ii)       Pension is evaluated on the basis of the last 10 months average pay or last pay drawn whichever is beneficial to retiring employee
Terms related to the PENSION Calculation
            (i)        PENSION
            (ii)       DCRG (Death Cum Retirement Gratuity)
            (iii)      COMMUTATION
            (iv)      RESTORATION of Pension
            (v)       FAMILY PENSION
How to calculate Pension
The pension amount is calculated based on the Basic Pay at the time of retirement, Age, Service years, etc.     It is calculated as 50% of average emoluments of last 10 months salary drawn. It is calculated on Basic and Dearness Pay only.

                               SMP  means Six monthly period of qualifying service
    Formula for Calculation of Pension Amount =    
  50% of Avg. emoluments (last 10 months)    or     50 % emoluments drawn on the retirement                                                                     

  • This is basically known as Gratuity. Gratuity is the amount given to the employee at the time of retirement.
  • It is calculated on Basic, DP and DA.
  • This amount is limited to maximum Rs.1000000 / - only.
Formula for Calculation of DCRG

                                            Last Salary Drawn   X    SMP
                      =   -----------------------------------------

                                           Last Salary Drawn   X    SMP
                            = --------------------------------------- (in case of Death)                                        2

·         At the time of retirement of the employee, a portion of pension can be withdrawn by the employee.
·         A maximum of 40% of pension amount can be withdrawn at the time of retirement. However, depending on the amount withdrawn proportionate amount will be deducted from the Pension amount till 15 years and employee will get reduced Pension till 15 years.

       Formula for calculation of Commutation
       =   Commutation Percent of Full Pension   x  Age Factor  x  12

       Formula for calculation of Reduced Pension
=   (Full Pension – Commutation Percent of Full Pension)
                        +  DA on Full Pension

If employee is dead before attaining his qualifying Service of Retirement, Thecalculation of DCRG in such case is as follows

DCRG        =      Total Pay X Multiplying Factor

(Total pay = Basic pay + Grade  Pay )

                                                Where Multiplying Factor varies as follows

                                        Service Life                 MF

                                                1  to  5  years                                              6

                                                5 to   20 years                                           12

                                                above 20                    SMP / 2  (in case of death)
                                                                                    SMP / 4  (on retirement)
Method for calculate family pension

Step  1    Calculate  Total Pay   ie  Basic Pay  +  DP ( A= Basic Pay + DP )

Step 2     Calculate  30 % of  Total pay               ( B=  A*30/100)

source :
Share this article :

+ comments + 5 comments

July 19, 2012

Wow thank you very helpful

October 18, 2012

Good Break up !!!! I love the way of you any idea reagarding KPTCL and KPCL department benefits in case of Karnataka.

June 06, 2014

Nic info...
Bt stil query in my mind is tht, wht is "SMP", hw cn we find it.
Hope u wil xplain it.

November 09, 2015

Does anyone know how to do this? I am so confused.
BT= 0.75
After 12 hours= 0.4

33.75 Celcius @ 7:00 am

Thank you,if you can do this. :)

March 14, 2017

date of birth is of retirement is 31-5-2017.what is the age factor(commutation factor)

Post a Comment