Calculation of Pension (Method)

The calculation of Pension and Commute is very simple. An employee

can calculate his/her pension and commute himself/herself. The main things in
pension calculation are basic pay and total service at the time of retirement. The
formula for pension calculation is as under: (By ZMCRC: ZIA BWN)

Gross Pension = Basic Pay x Service (Maximum 30 years) x 70/3000

Basic Pay:
The basic pay is taken the pay at the time of retirement the individual is
drawing. If an employee retires from service on 1 st June or after it then 1x Usual
Increment is added in his/her basic pay for the pension purpose only. If an
employee is drawing PP (Personal Pay), it is also included in his/her basic pay.
Same is the case with Special Pay.

Service:
The maximum length of service for the pension purpose is 30 years. If an
employee has a service more than 30 years then only 30 years’ service is
considered for the pension purpose.

Ordinary (Net) Pension:

Here is to mention that 65 % of the Gross Pension is taken as Ordinary Pension
and the remaining 35 % is taken for the Commute purpose.
Ordinary Pension = Gross Pension x 65 %

Calculation of Commute (Gratuity):

Use the following formula for the calculation of commute.
Commute = 35 % of Gross Pension x 12 x Age Rate

PENSION FORMULA: (By ZMCRC: ZIA BWN)

Gross Pension Basic Pay+PP x 7 x Service / 300 =

Commuted Pension (65% of Gross Pension) Gross Pension x 65/100 = (Family 75%)
Commuted Pension (35% of Gross Pension) Gross Pension x 35/100 = (Family 25%)
Total Payment of Commute “Gratuity” Commuted Pension x Age Rate x 12 =