Calculating Pension, Leave Encashment, and Commutation Gratuity: The Advantages of OPS by Sankhyan

by | Apr 19, 2024 | Retirement Pension | 32 comments

Calculating Pension, Leave Encashment, and Commutation Gratuity: The Advantages of OPS by Sankhyan




This video is dedicated to my mentor/ guru Sh Panwar sir on his retirement.
#Sanjay Sankhyan
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Pension, leave encashment, and communication gratuity are important benefits that employees receive as part of their overall compensation package. These benefits play a significant role in providing financial security and stability to employees, especially after they retire or leave the organization. In this article, we will discuss how to calculate these benefits and the advantages of opting for the Old Pension Scheme (OPS).

Pension is a regular payment made to a retired employee by the employer. The amount of pension is typically calculated based on the employee’s years of service, average salary, and other relevant factors. To calculate pension, you can use the formula:

Pension = (Average Salary x Years of Service) x Pension Percentage

Leave encashment is the payment made to employees for the unused leave days they have at the time of retirement or resignation. The amount of leave encashment can be calculated by multiplying the number of unused leave days by the employee’s daily salary rate.

Communication gratuity is a one-time payment made to employees for their years of service. The amount of communication gratuity is typically calculated by multiplying the employee’s last drawn salary by the number of years of service and a predetermined factor.

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Now, let’s discuss the benefits of opting for the Old Pension Scheme (OPS) as opposed to the New Pension Scheme (NPS). OPS offers a guaranteed pension for life, which provides financial security to retirees. In contrast, NPS is market-linked and does not guarantee a fixed pension amount. Additionally, OPS allows for a higher pension percentage based on the employee’s years of service and average salary, while NPS offers lower pension amounts.

Furthermore, under OPS, employees are entitled to leave encashment and communication gratuity benefits, which are not available under NPS. These additional benefits provide retirees with extra financial assistance during their post-employment years.

In conclusion, pension, leave encashment, and communication gratuity are crucial benefits that contribute to the financial well-being of employees, especially after retirement. By calculating these benefits accurately and understanding the advantages of opting for OPS, employees can ensure a secure and stable financial future.

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32 Comments

  1. @shubham-uc6ih

    Pension band honi chahiye is pension k karan aane vaali generation ka gala gyonta jaa rha ha

  2. @kullumanalivibes7484

    1 pension= 46,900
    2 family pension= 28,140
    3 commutation 40%= 14,06,328
    4 pension after commutation= 21000
    5 leave encashment= 7,19,133

    Leave encashment m thoda sa doubt h sir kya HPL bhi isme judegi?
    Plz rply…..

  3. @kuldeepnegi3396

    Pension= 46900
    Family pension= 28140
    Commutation1406328
    Pension after commutation= 32900
    Leave encashment = 719140

  4. @kuldeepnegi3396

    In this example of commutation 40 % of 25000 is 10000 X12X 8.371=1004520 is this right or wrong please. and please reduced pension

  5. @srishtivision198

    sir one query.
    If a employee died before superanuation without completing qualifying service off 10 years. is his family/Spouse entitled for family pension or enhanced family? pension

  6. @prajapatistudy579

    Sir rajsthan me job karta tha ab mp me karne laga kya doosra gpf nomber ban jayega

  7. @panchugopalkaran9645

    Sir kya NPS main retirement ke samay gratuity our leave encashment milta hai kya aur kaise milta hai

  8. @Anu_1988

    ❤❤

  9. @naveenchand6515

    Sir plz give me the idea of pension after commutation in the given example.

  10. @hwc-phcdomeharh.p.199

    Sir we have Commutation calculation of ur example 40% of 25000 × 12 × 8.371= 1004520
    And Reduced pension calculation is 15000 +DA on full Pension
    Sir Pl check is it correct

  11. @animeOTAKU77

    1 )Pension 46900
    2 )Family pension 28140
    3)Commuted value of pension 1884479
    4) pension after commutation 28140
    5 )leave encashment
    Pension after commutation 28140
    Y
    6) leave encashment 719133

  12. @ambikasd8

    Sir aapne bahut acha samjhaya thank u so much.

    Plz see video from 21:51 to 22:10

    Comutation pension
    As per your eg.
    If BP =50,000
    DA- 31%

    Basic pay for pension= 25,000

    Comutation pension= BP for prnsion * 40%
    Comutation Pension = 10,000

    Aap video mei 19,560 bol rahe ho. I guess ye galat hai.

    Further
    Commutation value of pension = BP for pension * 40% * 12* 8.371

    = 25,000 * 40% *12 *8.371
    = Rs 10,04,520

    Aapka video ki slide mei Rs 7,85,936 aa raha h.

    Pension after commutation= last basic pay for pension – comutation pension
    = 25,000 – 10,000
    = Rs 15,000

    Aapke video ki slide mei Rs 11,736 aa raha h.

    Isse bahut confusion ho rahi hai.
    If possible please correct this

    DIY question
    1. Pension
    Basic pay for pension = Rs 35,000

    Pension =BP for pension +DA
    Pension = Rs 46,900

    2. F. Pension
    BP for F. Pension= 30% of last BP
    = Rs 21,000
    F. Pension = Bp for F. Pension + Da @34%
    = Rs 28,140

    3. Commutation pension 40%
    = 40% of BP for pension
    = Rs 14,000

    4. Pension after commutation
    = BP for pension – commutation pension
    = Rs 21,000

    5. Leave encashment
    = Rs 7,19,133

    I have also calculated the following.
    RG = Rs 11,95,950

    Commutation value of pension = Rs 14,06,328

    Plz tell if all the answers are correct or not.
    If not plz tell the correct answers
    Plz do reply as the Exam of FA is on 21st Nov 23
    Thanks & regards.

  13. @RajeshKumar-ej5rn

    My age is fifty seven years my service 32 years in gpvt service

  14. @VishalSharma-en3th

    Sir commutation of pension m reduced pension 11736 kaise aaya plz explain kare

  15. @neetukanain2770

    Very effective & informative sir.
    Thank you.

  16. @turboking732

    Promotion and gratuity k liye dailywages service count ki jaati hai kya

  17. @rajkashyap1216

    Very nice knowledgeable video

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