Commutation of Pension Not Requiring Medical Examination: DoPPW Clarifies Rule 12 and One-Year Time Limit
Commutation of Pension Not Requiring Medical Examination: DoPPW Clarifies Rule 12 and One-Year Time Limit
The Department of Pension & Pensioners’ Welfare has issued an OM dated 29 October 2026 explaining which pensioners can commute pension without a medical examination under the CCS (Commutation of Pension) Rules, 1981, and when the one-year application window starts.
Quick summary: A pensioner who falls under any of the five classes in Rule 12 can commute pension without a medical examination. The application in the prescribed form must be submitted within one year of retirement. For retrospective retirement orders (clause iii) and cases after departmental or judicial proceedings (clause v), the one year is counted from the date the relevant order is issued.
OM at a Glance
| OM Number | No. 4/37/2026-P&PW(D)(1) |
| Date | 29 October 2026 |
| Issued by | Department of Pension & Pensioners’ Welfare, Ministry of Personnel, Public Grievances & Pensions, Government of India |
| Address | 3rd Floor, Lok Nayak Bhawan, Khan Market, New Delhi–110003 |
| Subject | Commutation of pension not requiring medical examination under CCS (Commutation of Pension) Rules, 1981 |
| Signed by | Keshav Madhav Sharma, Under Secretary to the Government of India |
| Circulated to | All Ministries / Departments / Organisations |
Official copy of the DoPPW Office Memorandum No. 4/37/2026-P&PW(D)(1) dated 29.10.2026 (2 pages).
1. Why Was This OM Issued?
DoPPW received queries about the circumstances in which a medical examination is not required for commutation of pension under the CCS (Commutation of Pension) Rules, 1981. This OM answers those queries by pointing to Rule 12 and Rule 13 of the 1981 Rules and explaining how the time limit works in special cases.
The OM directs all Ministries and Departments to bring these provisions to the notice of Heads of Offices, Pay and Accounts Offices and other pension-processing authorities, so that applications for commutation are examined properly and disposed of on time.
2. Which Rules Apply?
By virtue of sub-rule (2) of Rule 84 of the CCS (Pension) Rules, 2021, the provisions of the CCS (Commutation of Pension) Rules, 1981 apply to commutation of pension authorised under the CCS (Pension) Rules, 2021. So employees retiring under the 2021 Rules continue to follow the 1981 Commutation Rules for commutation.
3. Rule 12: Who Does Not Need a Medical Examination?
Rule 12 of the 1981 Rules provides for commutation without medical examination for an applicant who is authorised any one of the following classes of pension:
| Clause | Class of Pension |
|---|---|
| (i) | Superannuation pension under Rule 33 of the CCS (Pension) Rules, 2021 |
| (ii) | Retiring pension under Rule 34 of the CCS (Pension) Rules, 2021 |
| (iii) | Pension on absorption in or under a corporation, company or body in terms of Rule 36 of the CCS (Pension) Rules, 2021, where the person elects to receive monthly pension and retirement gratuity |
| (iv) | Compensation pension on abolition of a permanent post under Rule 39 (the OM cites the CCS (Pension) Rules, 1972) |
| (v) | Pension, in whole or in part, on finalisation of the departmental or judicial proceedings referred to in Rule 8 of the CCS (Pension) Rules, 2021 and issue of final orders |
Provisional pension also covered
Para 3.1 of the OM says the pensions in clauses (i), (ii) and (iv) include the provisional pension sanctioned under Rule 62 of the Pension Rules. A pensioner drawing provisional pension in these categories is therefore covered for commutation without medical examination.
4. Rule 13: The One-Year Time Limit
As per Rule 13 of the 1981 Rules, an applicant who receives any pension referred to in Rule 12 and wants to commute a percentage of it at any time after the day following retirement, but before the expiry of one year from the date of retirement, must submit an application in the prescribed form within one year of retirement.
Practical point: The one-year window is the main compliance risk. Pensioners should file the application early and keep an acknowledgement showing the date of receipt.
Special cases where the one year is counted differently (Para 4.1)
| Situation | One-year period starts from |
|---|---|
| Superannuation / retiring pension (clauses i, ii) and compensation pension (clause iv) | Date of retirement |
| Absorption pension with retrospective retirement order (clause iii) | Date on which the retirement order is issued |
| Pension after proceedings under Rule 8 (clause v) | Date on which the order is issued after finalisation of the proceedings |
5. Commutation of Pension Calculator
Use this tool to estimate the lump sum (commuted value of pension) and the reduced monthly pension. It uses the Table of Commutation Values for a pension of Re. 1 per annum, as per Sixth CPC recommendations effective from 1.1.2006 (basis: LIC 94-96 Ultimate Table and 8% interest).
Commuted Value of Pension Calculator
Formula: Commuted Pension × 12 × Commutation Factor
Estimate only. The final amount is fixed by the pension-processing authority on the date commutation becomes absolute, using the age and table applicable under the rules. Under Rule 10A, the commuted portion is restored after 15 years from the date of receipt of the lump sum.
Worked example
Basic pension ₹40,000, commutation 40%, age next birthday 61 (factor 8.194): commuted pension is ₹16,000 per month, so the lump sum is ₹16,000 × 12 × 8.194 = ₹15,73,248. The balance pension is ₹24,000 per month.
Commutation factor table (age next birthday)
| Age | Factor | Age | Factor | Age | Factor |
|---|
Source: Table II of the CCS (Commutation of Pension) Rules, 1981 as reproduced by StaffNews. Verify against the latest rules before use.
6. What Employees and Offices Should Do
- Check whether your pension falls under any class in Rule 12. If yes, no medical examination is needed.
- Submit the commutation application in the prescribed form within one year of retirement.
- If you retire with a retrospective order (clause iii) or after proceedings (clause v), note the date of the order. That date starts your one-year period.
- Offices should record the date of receipt properly and dispose of applications on time.
- Provisional pensioners under clauses (i), (ii) and (iv) are also covered.
7. How This OM Relates to the Date of Commutation Becoming Absolute
This OM is about when no medical examination is needed and the one-year application window. A separate DoPPW OM of the same date (No. 4/37/2026-P&PW(D)(3)) deals with the date on which commutation becomes absolute. Read both together: the first tells you whether you must be examined and by when to apply, and the second determines the date used to select the commutation value.
8. Frequently Asked Questions
Who can commute pension without a medical examination?
Applicants authorised superannuation pension (Rule 33), retiring pension (Rule 34), absorption pension electing monthly pension and gratuity (Rule 36), compensation pension on abolition of a permanent post, or pension after finalisation of proceedings under Rule 8.
What is the time limit to apply?
The application must be submitted in the prescribed form within one year of retirement, counted from the day following retirement up to the expiry of one year from the date of retirement.
When is the one year counted from the order date instead of retirement date?
For clause (iii) cases where the retirement order is issued with retrospective effect, and for clause (v) cases after departmental or judicial proceedings are finalised.
Is provisional pension covered?
Yes for clauses (i), (ii) and (iv). The OM says these include provisional pension sanctioned under Rule 62 of the Pension Rules.
Does this OM change the 40% limit?
The OM does not mention any change to the commutation percentage or the restoration period. It only clarifies when no medical examination is required and how the time limit applies.
Bonus: Pension and Insurance Guide for Senior Citizens
Tap each section to expand.
Pension matters to handle after retirement
- Life certificate: Submit the annual life certificate through Jeevan Pramaan (Digital Life Certificate) to avoid pension disruption.
- Restoration: The commuted portion is restored after 15 years from the date of receipt of the lump sum (Rule 10A). Note the date in your records.
- Dearness Relief: DR is paid on the balance pension, so check your PPO and bank credit after each DR revision.
- Grievances: Pension grievances can be filed through the DoPPW portal at doppw.gov.in.
- Tax: The commuted value for government employees has been exempt from income tax. Confirm the position under the current Income-tax law with incometax.gov.in or a tax professional.
Where to invest the lump sum safely (Oct–Dec 2026 rates)
Small savings rates were kept unchanged for October–December 2026. They are reviewed every quarter, so recheck before investing.
| Option | Rate p.a. | Key points |
|---|---|---|
| Senior Citizens Savings Scheme (SCSS) | 8.2% | Age 60+, 5 years, up to ₹30 lakh, quarterly interest |
| Post Office Monthly Income Scheme | 7.4% | Monthly payout, 5 years, ₹9 lakh single / ₹15 lakh joint |
| National Savings Certificate | 7.7% | 5-year lock-in, paid at maturity |
| Kisan Vikas Patra | 7.5% | Doubles in 115 months |
| Post Office 5-Year Time Deposit | 7.5% | Sovereign-backed |
| Bank FD (senior rate) | Varies | Compare banks, choose payout option |
Splitting the lump sum between SCSS (up to the limit), a ladder of fixed deposits and an emergency fund is a common approach. Keep any market-linked investment small. Interest on these schemes is taxable.
Health cover for senior citizens
1. Start with CGHS and government schemes
- CGHS beneficiaries get cashless treatment at empanelled hospitals in CGHS cities. Check your entitlements at cghs.mohfw.gov.in.
- Citizens aged 70+ may be eligible for Ayushman Vay Vandana under PM-JAY. Check at pmjay.gov.in.
- A private policy can work as a top-up for gaps in coverage.
2. Example private plans (not rankings)
| Insurer | Plan |
|---|---|
| Star Health | Senior Citizens Red Carpet |
| Care Health | Care Senior |
| Niva Bupa | Senior First |
| Bajaj Allianz | Silver Health |
Plans and premiums change. Compare current brochures and quotes before buying.
3. Checklist before buying
- Waiting period for pre-existing diseases: Choose the shortest. IRDAI rules cap it at 3 years.
- Co-payment and sub-limits: Lower is better, and check room rent caps.
- Network hospitals: Confirm your preferred hospitals offer cashless treatment.
- Lifetime renewability and a sum insured suited to your city.
- Honest disclosure of existing conditions to avoid claim rejection.
- Tax: Under the old tax regime, premium for senior citizens gets a higher deduction limit. Verify the current limit with a tax professional.
Regulator information: irdai.gov.in
Sources and Further Reading
- DoPPW Office Memorandum No. 4/37/2026-P&PW(D)(1) dated 29.10.2026 (PDF button above)
- Department of Pension & Pensioners’ Welfare (official website)
- Pension Commutation Values Tables I & II (StaffNews)
- Small savings interest rates: Indian Bank
- National Savings Institute
- Jeevan Pramaan (Digital Life Certificate)
- CGHS official website
Disclaimer: This article is based on DoPPW OM No. 4/37/2026-P&PW(D)(1) dated 29 October 2026. Refer to the original OM and the CCS (Commutation of Pension) Rules, 1981 for individual cases. The calculator gives an estimate only. Investment and insurance information is general, not financial, tax or insurance advice, and rates and plan features change.
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