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A defined-benefit government pension is typically half of last drawn emoluments, pro-rated where qualifying service falls short of the full-pension threshold. Commuting part of the pension converts it into a lump sum using a commutation factor, permanently reducing the monthly amount until restoration.
Pension entitlement
Pension = Last drawn pay x 50% x min(1, Qualifying service / Full-pension service)
Commutation lump sum
Lump sum = Commuted monthly pension x 12 x Commutation factor
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
In many schemes the commuted portion is restored after a set period, commonly 15 years, after which the full pension resumes.
Dearness relief is usually calculated on the full original pension, not the reduced one, which materially improves the value of commuting.