Revised Commutation factor for Whole Time Directors of Nationalized Banks

As per the circular of the DFS addressed to all Nationalised Banks posted on this blog ,the Commutation Factors for pension have been revised applicable for Bank employees retiring on or after 1/6/2021.

There is a reduction in the commutation factor  by 1.616 for an employee retiring at age 60.This constitutes a reduction to the extent of  16.5%.This means that Bank retirees after 1/6/2021 will get almost 1/6 th less commuted pension than earlier retirees.This indicates a higher longevity assumed in the calculations without reducing the rate of interest.Actuaries will know better.

I believe that we can expect a similar circular from DFS to LIC & General Insurance companies in the public sector.

Let us wait and see.

C H Mahadevan