Availing incremental commutation by the retired Bank employees‏

Dear Mr Raithatha,

The major flaw in the proposed payment of incremental commutation of pension is an amount due actuarially on the date of retirement after 1/11/2012 is being paid now. So, when the increased deduction towards commuted pension is to be made from the date of retirement,unless interest is paid on the difference in commuted pension, it will be a financial injustice for the retired employee.

On top of it , such retired employees can only exercise negative option, i.e. not to receive the difference in commuted pension and if they do not do so they will be automatically deemed to have opted for receiving the difference in commuted pension.

The Bank employees' Associations and Bank retirees' Associations should also fight for interest being paid on the difference in commuted pension at compound rate as is built into the commutation factors used for calculating commuted value of pension. Otherwise, it is a lossmaking proposition for post October 2012 retirees. This is my personal view.

Kind regards.
C H Mahadevan