PENSION PAYMENT IN PUBLIC SECTOR BANKS:IS IT A CHARITY BY BANKS?
Dear Colleagues
With the signing of 10th Bi Partite Settlement on 25.05.2015 between the Indian
Bank Association and the United forum Of Bank Unions, there had been total
disappointment among the approximately 5 lacs retired employees and their
families as none of the demands of retired employees included in the charter
submitted by UFBU was discussed and agreed upon by the IBA. The IBA and UFBU
after signing the 10th Bi Partite settlement, signed a Record Note on the demands
of retired employees and the views of IBA on these demands without explicitly
dealing the views of UFBU on these demands. This has caused the all round
frustration among the retired as well as the senior serving employees retiring
between 01.11.2012 to 31.10.2017 as this settlement gives them a very meager
increase (about 2% of load factor)after merger of DA up to 4440 points. The
pension of existing retired employees was in fact reduced for the first time due to
increased commutation amounts.
Before discussing the repercussions of Record Note on the demand of retired
employees, a need is felt to discuss and understand the whole issue of Pension in
Public Sector Bank:
HISTORICAL BACKGROUND OF PENSION SCHEME IN PUBLIC SECTOR BANKS
1. The State Bank of India was established by special Act of Parliament in 1955
and was a PSB. The SBI Employees were entitled for -3- retirement benefits
viz. 1. CPF (Contributory Provident Fund) 2. Pension 3. Gratuity as per
Payment of Gratuity Act.
2. -14- Banks were Nationalized on 19.07.1969, -6- more Banks were
Nationalized in 1980, Total 20 Nationalized bank were operating in India
and the employees were entitled for -2- retirement benefits viz 1. CPF (
Contributory Provident Fund) 2. Gratuity as per Payment of Gratuity Act
3. The employees of these -20- Banks have a long pending demand for
payment of pension as 3rd retirement benefit as applicable to SBI.
4 In 1993 GOI/ MOF declined the demand of pension as 3rd retirement
benefit but offered pension as 2nd retirement benefit in lieu of
Management contribution to CPF. The draft Scheme was adopted on the
line of pension scheme applicable to Central Govt. employees. The Bank
employees Pension regulation contains a Residuary Provision No 56 that -“
In case of doubt, in the matter of application of these regulations, regard
may be had to the corresponding provisions of central civil Service rules
1972 or Central Services ( commutation of Pension) and modifications as
the Bank, with the previous sanction of central Govt. may from time to
time, determine”.
5 These regulations were titled as say “(XYZ) Bank Employees Pension
Regulations 1995”. (To be published in the gazette of India Extraordinary,
Part III- Section 4).
6 Accordingly Banks in 1993-1995 offered to their existing employees either
to exercise option for above pension scheme or continue with the existing
CPF( Contributory Provident Fund). Large No of employees appx. 48% not
opted for the pension scheme and preferred to continue with the CPF due
to following reasons:
a. The interest rates of GPF/EPF/CPF prevailing at that time were as high
as 12-13% p.a. so employees opted to continue with CPF as it was found
to be more beneficial.
b. Pension regulation contain a deadly provision of forfeiture of past
service due to participation in a strike. (This provision was
subsequently deleted in 2000).With the deletion of forfeiture of past
service clause notified on 16.03.2000, the principle of natural justice
demand that the fresh option for pension should have been extended
to those who have not opted for pension in 1993-95 but the same
basic principal of administration/ good governance was not followed
by the Banks. More ever the information about deletion of this
‘forfeiture of service in case of strike’ clause was not circulated by the
banks and willfully and with malaise intentions till date of notification
on 16.03.2000.
c. The Bank Employees Pension Regulations was implemented from
01.11.1993. The employees joined on or after 01.11.1993 were
compulsorily covered under the above Pension Regulation.
Thus there were -2- class of Bank Employees created 1. One covered
under Pension Scheme and 2. The employees who continued under CPF
( Contributory Provident Fund).
1
2
3
PENSION SCHEME IN PUBLIC SECTOR BANKS
The Bank employees pension scheme is covered under “Bank
Employees Pension Regulations 1995” adopted by the Bank’s Board after
consultation with RBI and with the previous sanction of the Central
Government. These Regulations are published in the gazette of India
Extraordinary, Part III- Section 4.
As per the provisions of pension regulations Banks are required to
constitute a fund called Bank (Employees) Pension Fund under irrevocable
trust with a sole purpose to make due payments to pension benefits to
employees of the bank or their families(family pension).
The Pension fund shall consist of:
a. Contribution by Bank @10% pm of the pay of the employees
b. The accumulated contribution of the Bank to the PF with interest with
respect of employees who have opted for pension
c. Contribution of the bank along with the interest refunded by the
employees/ families of the deceased employees who had retired before
the notified date but opted for pension.
d. As per the Pension regulations the bank shall cause an investigation to
be made by an actuary into financial condition of the fund every
financial year on the 31st of the march and made such additional
contribution to the fund as may be required to secure payment of
benefits under these regulations.
e. As per Regulation 13 of Pension Regulation the payment of benefits by
the pension trust shall be administered for grant of pensionery benefits
to the employees or the family pension to the families of the deceased
employees of the bank
Thus the Pension Scheme was introduced in the Public sector Banks for the
employees retired on or after 01.01.1986 and the existing employees who have
opted for pension and compulsorily covered the employees who joined after
01.11.1993.
The Central Govt. introduced a scheme of compassionate pension of Rs 300/- pm
plus DA for the pre-1986 retirees
Subsequently employees unions raised the demands for improvement in the
pension scheme in their charter of demands with IBA but instead of improving
the pension scheme in PSBs as applicable to Central Govt. employees following
distortions were created to the disadvantage of existing retirees as well as retiring
employees in PSBs in each BPS signed during 1997 to 2015.
VIIh Bipartite Settlement for the period 01.11.1997 to 31.10.2002 signed on
27.03.2000- Distortion/Deniel of Full Pension Benefits
1. The scales for the existing employees were constructed with the merger of
DA upto 1664 points of All India average consumer price index but for the
retirees the pension was calculated with the merger of 1616 points of DA.
Thus the pension of retirees who were eligible for full pension was reduced
from 50% of Pay to 41%. This was the violation of Pension regulations
because the Pension regulations prescribe the rate of pension as 50% of
average monthly emoluments for last ten months prior to retirement.
2. The agreement was signed on 27.03.2000 which was effective from
01.11.19997. The employees retired during the period from 01.11.1997 to
27.03.2000 were denied the arrears of pension and also the difference of
commutation amount due to difference in old and new basic pension. They
were forced to give an undertaking that the pension on the revised scale
will be paid only if the retirees will not claim the arrears of pension and
commutation.
3. With an intention to deny the benefit of full pension the concept of
incremental cost of pension was introduced by IBA in this settlement. The
additional cost of pension was calculated as 16.5% of the pensionable pay
and employees forced to bear 8.25% of the incremental cost of pension,
thus their revised wage p.m. were reduced by 8.25% resulting in payment
of reduced pension. This was violation of pension regulations as the
regulation do not have any provision of recovery of pension cost from the
employees.
4. This incremental cost of pension recovered from the employees as well as
equal contribution by the bank was not deposited in the pension fund.
5. The details of working of incremental cost of pension are never disclosed to
the employees.
6. Since the wage of both PF optees as well as Pension optees were reduced
(by 8.25%p.m.) to the extent of incremental cost of pension, where as the
PF optees were not entitled for pension benefit.
7. The pension fund details were never disclosed in public domain which
resulted in pension fund being run like a ponzi scheme where pf optees
were asked to contribute in pension fund.
VIIIh Bipartite Settlement for the period 01.11.2002 to 31.10.2007 signed on
02.06.2005 -Distortion/Deniel of Full Pension Benefits
1. The illegality of considering DA merger upto 1616 points for the purpose of
pension calculation in the VII th BPS, was rectified in VIII BPS signed on
02.06.2005. Again the IBA committed the illegality of denying the arrears
there off and commutation difference to adversely affected past retirees.
2. Agreement was signed on 02.06.2005 which was effective from
01.11.12002. The employees retired during the period from 01.11.2002 to
02.06.2005 were denied the arrears of pension and also the difference of
commutation amount due to difference in old and new basic pension. They
were forced to give an undertaking that the pension on the revised scale
will be paid only if the retirees will not claim the arrears of pension and
commutation.
3. With an intention to deny the benefit of full pension the concept of
incremental cost of pension introduced in 7th BPS by IBA was continued in
this settlement also and the additional cost of pension was calculated as
20.5% of the pensionable pay and employees forced to bear 9.25% of the
incremental cost of pension, thus their revised wage p.m. were reduced by
9.25% resulting in payment of reduced pension. This was violation of
pension regulations as the regulation do not have any provision of
recovery of pension cost from the employees.
4. This incremental cost of pension recovered from the employees (9.25%) as
well as the 11.25% cost shared by the bank was not deposited in the
pension fund by banks.
5. The details of working of incremental cost of pension are never disclosed to
the employees in general. Such details are not in public domain.
6. Since the wage of both PF optees as well as Pension optees were reduced
(by 9.25%p.m.) to the extent of incremental cost of pension, where as the
PF optees were not entitled for pension benefit.
7. The pension fund details were never disclosed in public domain which
resulted in pension fund being run like a ponzi scheme where pf optees
were asked to contribute in pension fund.
8. The DA neutralization@100% was introduced w.e.f 01.02.2005 which
should have been implemented from the date of settlement and also the
same not extended to illegally to retirees retired before 31.10.2002.
IX th Bipartite Settlement for the period 01.11.2007 to 31.10.2012 signed on
27.04.2010- Distortion/Deniel of Full Pension Benefits
1. With an intention to deny the benefit of full pension the concept of
incremental cost of pension introduced in 7th BPS by IBA was continued in
this settlement also and he additional cost of pension was calculated as
26% of the pensionable pay and employees forced to bear 13.00% of the
incremental cost of pension, thus their revised wage p.m. were reduced by
13% resulting in payment of reduced pension. This was violation of pension
regulations as the regulation do not have any provision of recovery of
pension cost from the employees.
2. This incremental cost of pension recovered from the employees (13%) as
well as the 13% cost shared by the bank was not deposited in the pension
fund by banks.
3. The details of working of incremental cost of pension are never disclosed to
the employees.
4. Since the wage of both PF optees as well as Pension optees were reduced
(by13%p.m.) to the extent of incremental cost of pension, where as the PF
optees were not entitled to pensionery benefit.
5. The pension fund details were never disclosed in public domain which
resulted in pension fund being run like a ponzi scheme where pf optees
were asked to contribute in pension fund.
2nd Option of Pension to serving as well as past retirees.
1. The demand of the employees for introduction of 2nd option of pension to
serving as well as retirees was accepted by the IBA . 2.60 lac working
employees and around .60 lacs retirees were allowed to join the pension
scheme.
2. An actuarial valuation of liability by actuaries appointed by mutual consent
was carried out and the funding gap was estimated at Rs 6000 cr for serving
employees. As per pension settlement 30% of Rs 6000 cr i.e. Rs 1800 cr
was to be paid by the employees and Rs 4200 cr was to be borne by Banks.
3. An actuarial valuation of liability by actuaries appointed by mutual consent
was carried out and the funding gap was estimated at Rs 3115 cr for
retirees and families of retirees . As per pension settlement 30% of Rs
934.50 cr was to be paid by the retirees and Rs 2180.50 cr was to be borne
by Banks.
4. The serving employees were asked to contribute 2.8 times of their basic
pay as on 1st Nov 2007
5. The retirees were forced to bear 156% of their PF Balance received at the
time of retirement. This amount varied from retiree to retiree depending
upon their date of retirement but they were given pension from a future
date i.e. 27.11.2009 irrespective of the date of their retirement.
6. This created a distortion that an employees retired on 30.11.2007 has
contributed 2.8 times of the basic as on 01.11.2007 but the employee
retired on 31.10.2007 was forced to refund 1.56 times of his PF
accumulation.
7. The actuarial valuation report on funding gap is not in public domain and
its accuracy and authenticity is very much doubtful.
Amortization of pension cost in 9th BPS
1. The RBI allowed the Banks to amortize their contribution of Rs 4200 cr for
servicing employees and Rs 2180.50 cr for retired employees over a period
of -5- years though the recovery from the employees and retirees was
made in one go. Thus the Pension fund was deprived of interest on this
amortized amount of Rs 6380.50 cr for a period of -5- years.
X th Bipartite Settlement for the period 01.11.2012 to 31.10.2017 signed on
25.05.2015
1. During 10th BPS IBA agreed on wage hike of 15% of the pay slip load factor
amounting Rs 4725 cr. Out of this 15% only 2% amounting to Rs 597 cr was
used for construction of pay scales after merger of 4440 point of DA.
2. IBA introduced a special allowance @7.75% to 11% of load factor and with
malafide intention to deny pensioner/retirement benefits to retirees and
serving employees retiring during 01.11.2012 to 30.10.2017 with rider that
superannuation benefits will not be available on this special allowance.
3. This special allowance was not applicable for PF deduction and also for
deduction under NPS.
4. The distribution of agreed %age increase in 7th BPS was 12.25% out of
which 7.85% was used for construction of pay scales &DA .similarly in 8th
was 13.25% out of which 6.85% was used for construction of pay scales &
DA & 9th BPS was 17.25% out of which 16% was used for construction of
pay scales & DA .
5. The pension stand reduced from statutory 50% of average emoluments of
past 10 months to 46.13% to 44.50% due to no counting special allowance
for superannuation benefits. Accordingly the commutation amount also
stand reduced. The extent of maximum loss of pension is Rs 6250/- pm as
on date and loss of lesser commutation amount is Rs 183000/- .
6. The employees retired during 01.11.2012 to 25.05.2015, their pension
stand reduced due to exclusion of special allowance for the purpose of
pension. Such employees have been given option to go for lower
commutation amount to avoid reduction in pension in violation of pension
regulations which is against the pension regulations because there is no
provision to change the option once exercised by the retirees.
OTHER DISTORTIONS/DENIEAL OF PENSIONERY BENEFITS/UPDATION OF
PENSION
 As per Regulation 26 the employees recruited with specialist qualification
PG Research professional was essential and were given relaxation in age
prescribed for direct recruitment, they were entitled to add one fourth of
the length of his service or actual period by which his age at the time of
recruitment exceeded the upper age limit or max. -5- years. The benefit of
this clause has been illegally denied to the bank pensioners.
 Regulation 35 contain provision of Updating the pension As done for the
retirees who retired during 01.01.1987 to 31.10.1986 & 01.11.1987 to
31.10.1993
ISSUES OF RETIRED EMPLOYEES IN 10TH BI PARTITE SETTLEMENT
1. Record Note of discussion between IBA & UFBU on the issues and demand
relating to retirees of the Banks held on 25.05.2015 at Mumbai. “ The
demand of the retirees can be examined as welfare measure as contractual
relationship does not exist between bank and retirees”.
Out of 15% salary hike the 10 th BPS IBA introduced aspecial allowance @ 7.75 %
to 11% of basic pay plus applicable DA which will not be reckoned for
superannuation benefits, viz pension including NPS, PF & Gratuity. This allowance
has been introduced with the sole intention to deny the pension benefits to the
bulk of the employees retiring during 2012-2017. The pension stand reduced due
this reason due to wage revision.
Compare How Much 10th BPS is Worse Than 9th BPS
Assess whether your wage revision is at 15% of salary slip cost?.
IX - BPS
Salary-as on 01.11.2007
Old Salary
Scale
I
II
III
IV
V
VI
VII
DA
Rate
33.3
33.3
33.3
33.3
33.3
33.3
33.3
New Salary
Basic
DA
CCA
Total
10000
13820
18240
20480
24140
26620
29340
3330
4602
6074
6820
8039
8864
9770
540
540
540
540
540
540
540
13870
18962
24854
27840
32719
36024
39650
DA
Rate
7.2
7.2
7.2
7.2
7.2
7.2
7.2
Basic
DA
CCA
Total
% Rise
Nov'7
14500
19400
25700
30600
36200
42000
46800
1044
1397
1850
2203
2606
3024
3370
540
540
540
540
540
540
540
16084
21337
28090
33343
39346
45564
50710
16
13
13
20
20
26
28
Salary-as on 01.05.2010
Old Salary
New Salary
Scale
DA
Rate
Basic
DA
CCA
Total
DA
Rate
Basic
DA
CCA
Total
% Rise
May'10
I
72.18
10000
7218
540
17758
39.6
14500
5742
540
20782
17
II
III
IV
V
VI
72.18
72.18
72.18
72.18
72.18
13820
18240
20480
24140
26620
9975
13166
14782
17424
19214
540
540
540
540
540
24335
31946
35802
42104
46374
39.6
39.6
39.6
39.6
39.6
19400
25700
30600
36200
42000
7682
10177
12118
14335
16632
540
540
540
540
540
27622
36417
43258
51075
59172
14
14
21
21
28
VII
72.18
29340 21178
540
51058
39.6
46800
18533
540
65873
29
X- BPS
Salary-as on 01.11.2012
Scale
I
II
III
IV
V
VI
VII
DA Rate
76.5
76.5
76.5
76.5
76.5
76.5
76.5
Old Salary
Basic
DA
CCA Total
14500 11093 540 26133
19400 14841 540 34781
25700 19661 540 45901
30600 23409 540 54549
36200 27693 540 64433
42000 32130 540 74670
46800 35802 540 83142
DA Rate
10.9
10.9
10.9
10.9
10.9
10.9
10.9
Basic
23700
31705
42020
50030
59170
68680
76520
New Salary
Spl ALL.
DA
1837
2784
2457
3724
3257
4935
5003
5999
5917
7094
7555
8310
8417
9258
CCA
870
870
870
870
870
870
870
Total
29190
38756
51082
61902
73051
85414
95065
% Rise
Nov'12
12
11
11
13
13
14
14
Salary-as on 01.05.2015
DA Rate
Old Salary
Basic
DA
CCA
Total
DA Rate
Basic
I
110.7
14500 16052
540
31092
33.7
23700
1837
II
III
IV
V
VI
110.7
110.7
110.7
110.7
110.7
19400
25700
30600
36200
42000
21476
28450
33874
40073
46494
540
540
540
540
540
41416
54690
65014
76813
89034
33.7
33.7
33.7
33.7
33.7
31705
42020
50030
59170
68680
VII
110.7
46800 51808
540
99148
33.7
76520
Scale
New Salary
Spl ALL.
DA
CCA
Total
% Rise
May'15
8606
870
35013
13
2457
3257
5003
5917
7555
11513
15258
18546
21934
25691
870
870
870
870
870
46545
61405
74449
87891
102796
12
12
15
14
15
8417
28624
870
114431
15
Contributed BY : Baban Prasad Sinha Centralised Salary TDS Cell Corporte Taxation Dept BCC, BKC,
Mumbai – 400051
RECORD NOTE SIGNED BY IBA AND UFBU ON CHARTER OF DEMANDS OF
RETIREES IN 10TH BI PARTITE SETTLEMENT SIGNED ON 25.05.2015
Following are the highlights of IBA stand on demands of retirees raised during the
10th Bi Partite Settlement:
IBA STANDON STATUS OF RETIRED EMPLOYEES VIS A VIS BANK
No contractual relationship exists between Banks & Retirees and
that their demands can be examined only as a “Welfare Measure”
OURVIEW:
a) At the outset we do not accept that no contractual relationship exists
between Banks & Retirees and that their demands can be examined
only as a “Welfare Measure”. We maintain that payment of Pension
cannot be construed as a mere Welfare Measure. As a matter of fact,
there are several court judgments upholding that pension is a
deferred portion of the compensation for the service rendered. In
landmark “Narkara Case”, the Hon. Supreme Court has held that
“Pension is a statutory, inalienable, equally enforceable right that has
been earned by the sweat of brow. As such it should be fixed, revised
and modified/ changed in the ways not entirely dissimilar to the
salaries granted to serving employees.”
b) Besides, the Pension Regulations have been framed under section
19(1) of Banking Companies (Acquisition & transfer of undertakings)
Act 1970/1980 and as such the relationship between Banks &
Retirees is a statutory one.
c) Officers’ Service Regulations/ Bi-partite Settlement provisions for
workmen, inter- alia, provide for post- retirement benefits including
Pension/ PF/ Gratuity etc. These are in the nature of statutory
obligations on the part of Banks. In these circumstances, how can it
be inferred that there is no contractual relationship between Banks &
Retirees/ Pensioners? Moreover in case of officers, Officers’ Service
Regulations/ Disciplinary Rules providing for disciplinary proceedings
after retirement will lose the test of validity before law in the absence
of contractual relationship.
d) Like wise in the absence of any contractual relations with Pensioners,
clause 48 of the Pension Regulations 1995 i.e. right to proceed
against retired employees will also not have any sanctity.
COMPARISION OF PENSION SCHEME OF BANKS WITH
CENTRAL GOVERNMENT SCHEME:
IBA STAND: Government pays pension out of Budgetary allocation
Bank’s Pension is a funded scheme.
OUR VIEW:
As regards comparison with Central Government Pension Scheme, we
specifically bring to your notice that Pension Regulations under the head
Residuary Provisions, specifically stipulates that “in the matter of
application of these Regulations regard may be had to the
corresponding provisions of Central Civil Services Rules 1972 or Central
Civil Services (Commutation of Pension) Rules 1981 applicable for
Government Employees with such modifications as the Bank with
previous sanction of Central Government, may from time to time
determine”. It is clearly understood that Bank Employees Pension
Scheme has been drawn primarily on the basis of Pension Scheme
applicable to Central Government Employees/ RBI Employees. Hence
comparison with the Central Government Employees pension Scheme is
not out of Place.
1.UPGRADING OF BASIC PENSION TO ALL PENSIONERS UP TO
UNIFORM INDEX OF 4440 POINTS:
IBA STAND: Would examine the cost implications.
2.UPDATION OF PENSIONFOR ALL EXISTING PENSIONERS AND
FAMILY PENSIONERS:
IBA STAND: Impossible to consider the demand due to huge additional
cost involved in funding the pension fund. Data to be collected to
ascertain the actual cost.
3.DA NEUTRALISATION AT 100% TO ALL PRE NOVEMBER 2002
PENSIONERS:
IBA STAND: Matter sub judice at Supreme Court. IBA can not take a
decision on the issue.
4.REVISION IN THE RATE OF FAMILY PENSION AS PER RBI
AND CENTRAL GOVERNMENT SCHEME:
IBA STAND: IBA sympathetic to the issue but cost involved is
significant and unaffordable. Will be examined at future date.
5.PERIODICAL UPDATION IN PENSION ALONGWITH WAGE
REVISION OF SERVING EMPLOYEES ON THE LINES OF
CENTRAL GOVERNMENT:
IBA STAND: It is a funding scheme, hence periodical updation is not
possible due to its serious impact on the working of Banks.
OUR VIEW:
a) While on several aspects of pension improvement, IBA has been
repeatedly forwarding the plea of cost burden but at no point of time
during negotiations, authentic data has been presented in support of
its contention. On the contrary, authentic pension fund data
categorically reveals that as on 31.03.2014, the corpus of Pension
Fund stood at about Rs. 1,14,000/- crores. More importantly Pension
Funds of Banks are in surplus consecutively over the years and such
surplus is growing year by year despite the fact that Banks have
failed to provide for the required sum in pension funds as agreed in
Bipartite Settlements. Under these circumstances, demands of
retirees for improvement in Family Pension in line with RBI, 100% DA
neutralization to pre Nov 2002 retirees as also updation of Pension,
cannot be delayed/ denied.
b) Bank of Baroda in its affidavit dated 11.08.14 submitted in High Court
Ahmedabad in civil application 1208 of 2013 admitted that the
additional burden on account of updation of pension will be Rs. 200
crore annually where as the net surplus inflow in the Pension fund is
more than Rs. 700 crore during 2013-2014.
c) We may point out that Bank Employees Pension Regulations
specifically provide for updation of Pension. We invite reference to
Regulation 35 (1) thereof which reads as under;
“Basic Pension and additional pension wherever applicable shall be
updated as per formula given in Appendix I” As a matter of fact,
such updating has already been given effect earlier for the
pensioners retired prior to 01.11.1987, who were positioned on par
with retirees under 01.11.1987 Wage Settlement. In view of the
above, updating of Pension has a statutory basis and it becomes a
statutory obligation.
d) In the matter of 100% DA neutralization for retirees prior to
01.11.2002 for which IBA was positive during discussion, there have
been several speaking judgments and favorable court orders. Though
the matter is still sub- judice, IBA should settle the matter positively
so that the expensive litigation can be put to rest once and for all.
But waiting for conclusion of court proceedings will only add to the
delay denying justice to pensioners who are above the age of 72-75
years and are anxiously waiting for the justice.
DEMAND FOR PENSION OPTION TO LEFT OVER EMPLOYEES VIZ
RESIGNEES, COMPULSORILY RETIRED:
OUR VIEW:
The issue of Pension to left over’s also a vital one. The category of those
retired compulsorily and the resignees have been denied benefits due to
strict interpretation of instructions from the Government in June, 2012.
Existing Pension Regulations categorically provide for pension to those
compulsorily retired from service. Denial of pension option to them is
violative of the very existing Pension Regulations itself. Denial of
Pension option to Resignees has also been tested through litigation and
several judgments including the one in Vijaya Bank Case, is a clear
pointer that they cannot be denied pension after the stipulated period.
In fact consequent upon such court verdict, several resignees have
already been conceded the benefit of pension option. It is also pertinent
to note that the number of those retired compulsorily as also those
resigned from Banks (after putting in requisite pensionable service) is
very small and the cost cannot stand in the way of extending benefits to
them.
ILLEGAL PAYMENT OF PENSION TO CMD, MD & ED OF BANK
WHO ARE NOT THE EMPLOYEES OF BANK FROM THE PENSION
FUND OF EMPLOYEES OF BANK:
On the genuine demands of pensioners and family pensioners IBA takes
the stand of cost involved one the other hand Banks are illegally paying
the pension to Chairman and Managing Director and Executive Directors
out of Pension Fund which is meant exclusively for the employees as per
pension Regulations provisions.
Dear colleagues, the above mentioned facts are some of the important
issues involved in payment of Pension and family Pension in Public
sector Banks.
IBA has all along adopted the unsympathetic, illogical and sometimes
inhumen attititude to words the genuine demands of hapless Bank
pensioners and their families. These pensioners have given their best
part of their life for the service of the Bank and now need to live the
rest of the life with self respect and dignity which is possible only when
they have financial strength.
The injustice meted out to the retirees and denial of justice to
pensioners and their families resulted in large number of litigations
against the Bank by the pensioners. Inspite of several court judgments
the Banks have not implemented the judgments and preferred appeals
against the judgment in higher courts looking into their vast resources
and the retirees were made to suffer financially as well as mentally.
UFBU on their part, though taken up the demands of retired employees
in their charter of demands, discussed the same with IBA, but always
compromised on their demands in negotiations and came out with
inferior settlement as the retirees were treated as soft target unable to
defend and protect themselves.
The retired officers associations were never made a party in any of the
settlement. No consultations were made by IBA with them and they
preferred to piggy ride on UFBU. Some of the retired officer’s
organizations were infact launched by Main employee’s organization.
In the 10th Bipartite settlement signed on 25.05.2015, the UFBU for
some strange reasons did not taken up the demands of retired
employees to its logical conclusion, signed the settlement in respect of
serving employees only. For retired employees UFBU signed a RECORD
NOTE with IBA where all the demands of retired were rejected by IBA.
Some of silent features of record note have already dealt with.
Friends, from the above facts we observe that the retired
employees/family pensioners were subjected to huge financial loss in
every successive settlement entered by IBA with UFBU in the form
sharing the cost (7th BP 8.25%, 8thBP 9.25%, 9th BP 13.00%) there by
reducing their wages and pension, non deposit of cost along with
management share in Pension Fund, forcibly denial of arrears of pension
and commutation. Pension Fund suffered huge loss in the form of
interest due to illegal amortization of Management share (Rs. 6380.50
crs) while offering 2nd pension option. Due to non updating of pension at
the time of every BP settlement there are -5- types of pension for
retired employees depending up on the date of retirement and a retired
General Manager may be drawing less pension than a scale I officer
retired recently.
A great injustice to the retired and retiring senior employees done by
IBA in 10th Bi Partite settlement when out of 15% load factor for
revision of wages, a special allowance was created @7.75% to 11% of
load factor on which no superannuation benefit was given. Due to high
commutation amount the existing pension was in fact REDUCED. This
has never happened in past.
Looking into the above scenario, and considering the matter in totality,
we feel the following demands of the retired employees should
immediately resolved by IBA with necessary directions from Central
Government, MOF,and RBI and from court if necessary:
1. Transparency in Management of Pension Fund Trust : Annual report
of Trust be shared with retirees. Office bearer of Retired officer
organizations inducted as Management trustees.
2. Acturial investigation report of Actuary for funding gap in Pension
fund be placed in Public domain.
3. Costing exercise for updating of pension of past retirees and Family
Pensioners is immediately carried out by a reputed firm of Chartered
accountant/Actuaries in each Bank and report be put on public
domain with in -3- months.
4. Issue of updating of family pension on the lines of RBI and Central
Government is implemented immediately. The costing exercise as
suggested at point no 3 be carried out.
5. DA neutralization @100%to all pre November 2002 pensioners are
granted.
6. Periodical updating of pension along with wage revision of serving
employees on the lines of central Government employees is
considered after carrying out the costing exercise at the cutoff date
of each settlement.
Friends, we are of the firm opinion that resolution of all above demands
of retired employees is possible provided we remain united and active
for our demands. We have to organize our self, Agitate against the
vindictive attitude of IBA and be prepared to fight in the court for our
demands if necessary.
Bank’s are having a corpus of Rs.1.14 lac crore (excluding SBI but
inclusive of Associate Bank) in their Pension Fund despite the fact that
Bank’s had not deposited their share in the fund as per the agreement.
All demands of pensioners of updating can be easily met from pension
fund and lacs of our sr. retired colleagues will be benefited provided the
Banks at the instance of IBA carry out the costing exercise which has
never been done.
Friend’s one thing is certainOnly you have to fight for justice.
Only you have to fight for you self respect and dignity.
Don’t expect others to fight for you.
Pension is your Right Nobody can snatch it from you.
Fighting for your retired senior colleague will be best social service.
With regards
BOBRO MUMBAI
An online group of Retired Officers on Whatsapp
COST OF PENSION UPDATION IN BANK OF BARODA DATA SUBMITTED BY
BANK IN GUJARAT HIGH COURT ON 11.08.2014 IN SPECIAL CIVIL
APPLICATION NO 1208 OF 2013 BY RETIREES OF BANK
Facts and figures of Pension Fund:
Opening Balance as on 1-4-2013
Add Annual Contribution
Add Interest Income
TOTAL
Less Benefits Paid
Less Gain/Loss
TOTAL
Closing Balance as on 31-3-2014
Amount in crores of RUPEES.‘
7502.04
1080.10
616.31
9198.45
502.76
436.21
938.97
8259.48
INCREASE OF RS 8259.48-7502.04=757.44 CRORES OF RUPEES in Pension fund of BANK
in F.Y. YEAR 2013-14 AFTER MEETING ITS ANNUAL OBLIGATIONS OF PENSION
PAYMENT.
According to Bank of Baroda the total number of pensioners and family pensioners ,pension
paid to the pensioners of the BANK OF BARODA :(Amount in crores of rupees)
No. of
No. of Family
Approximate
Additional
Total of
pensioners/retired
pensioners/Families pension paid per
burden
column 4,
as officers
of retired officers
month for both
payable, if
i.e.
pensioners and
the claim of
additional
family pensioners petitioners is burden if
granted
pension is
(3)
updated.
(4)
(1)
(2)
(5)
8585
1260
21.00 +1.50
6.57 +1.35
7.92
If the claim of the PENSIONERS are granted ,Bank of Baroda has to incur additional burden
of Rs.8.00 crores per month and Rs.96.00 cores annually. The additional burden on account of
non officer staff and their family pension for 12500 persons would be Rs.100.00 crores
approximately. In all, for workmen and officers additional burden on account of updation of
pension, would be Rs.196.00 crores per annum. AND
As admitted by the bank in its Affidavit in Reply, the additional cost of pension on account of
Pension Updation would be Rs. 200 crores in current rates and the increase in pension fund in
the previous financial year is Rs. 757. 44 crores. There are sufficient funds in the pension fund to
meet this additional burden of granting claim of PENSIONER in respect of upgrading of
pension. That is to say, that the increase in pension fund in the current year amounting to Rs.
757.44 crores is enough to meet additional burden due to upgrading of pension and still the
increase in pension fund will be Rs. 557.44 crores. .
If the pensioners claim is granted retrospectively, for the entire period of 20 years, at an average
additional burden of Rs. 150.00 Crores per annum come to Rs. 3000.00 crores. But still there
will be 5259.48 crores pension fund available after meeting the additional burden on account
pension updation. That is Rs. 8259.48 – 3000.00 = 5259.48 crores. However it may be noted that
Bank has suppressed the current position of the Pension Fund and has mislead the Hon’ble court
by giving the figures of additional burden only. There is no transparency on the part of the Bank,
when it comes to the actual and factual funds position. It MAY BE NOTED THAT the
additional cost/burden on account of pension updation can be incurred by the self financing
scheme of pension and it would not break the backbone of the pension fund.
Further with respect to the financial implications on granting the claim of the pensioners,
it has been respectfully submitted above, that the Pension Fund has got enough funds in its
Pension Fund, to incur additional burden on account of updation of pension to the
pensioners.
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