The Ministry of Finance has produced guidelines on the payment of commuted value pensions. Due to the fact that the process for paying the commuted value of a pension is not properly followed by Pay and Accounts Offices and Paying Branches of approved Banks for payment of pensions. All CPPCs of Authorised Banks and Pay & Accounts Offices are instructed to strictly adhere to the process for payment of the commuted value of pension outlined in the "scheme for payment of pensions to Central Government Civil Pensioners through Authorised Bank," Civil Accounts Manual, and CCS Pension Rules. According to an official memorandum issued by the Ministry of Finance on June 17, 2021, the method for the payment of the commuted value of pension is as follows:
1. The case in which Government servants retiring on superannuation may desire authorisation for payment of the commuted value of the pension at the time of the issue of the PPO-
- The accounts officer after necessary verification shall authorise 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.
- 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 authorised separately through DDO.
- 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 authorisation issued by the Accounts Officer-
- The payment in such case will be made by the bank.
- This will be done on the receipt of authorisation from PAO of the Ministry/Department or the Accounts Officer of the UT Government/Administration through a separate authority letter.
- 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 authorised banks.
- 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.