Opinion On Pension Fund

My opinion on participation in ‘General Strike’ on 12-11-2014--By Sri Pannvalan

After a careful thought, I decided to participate in General Strike today, not because of any fear of UFBU leaders, but because of the following reasons. 

1.    A group of people constituting less than 1% of the banking fraternity (as on date) who are opposed to the style of functioning and approach of the UFBU, in regard to wage revision and service conditions of the bank staff cannot change the world overnight.  This is a stark reality.  We must accept this fact. 

2.    By working on a strike day, we are only helping the management, who is a bigger enemy.  Let's not forget this ever.

3.    3. If you want to fight the current leadership of UFBU, openly challenge them in the official forums, whether you get opportunities or not.    You may even dethrone them, whenever an opportunity arises. 

4.    'One day's strike or no strike' will not help us achieve our goals.  At the same time, if we don't strike for our own cause, it will bring out our rift into the open and the general public will laugh at us. 

5.    It's not the question of losing one day's wages for a useless purpose.  Who knows, in future, we may also include a clause in the settlement (whenever it happens) that the period of strike will be adjusted with the leave available to the credit of the employees concerned.  This privilege is available to all major Trade Union members, except to those in banks and insurance sectors. 

6.    As I have been telling for the past 2 years, before resorting to strike action, follow 'Work to Rule'.  Then all other things will follow.  'Work to Rule' will produce salutary results. 

7.    You shall educate the customers and the common masses through popular media about the discrimination meted out to us, for no fault of ours. 

8.    Tell them about huge NPAs and their creators.  Certainly, we are not their creators. 

9.    Catch the big fish first.  If 60% of the top 50 NPAs in the banking industry are recovered, then there will be no need to fight for wage revision. 

10.  Force the present government under Modi's leadership to confiscate the personal wealth of the Directors/Partners of the major defaulters.  Then, you may see for yourself that every other thing will fall in line.

Date: 12-11-2014                                                                                             pannvalan

Following are opinion of Sri pannvalan in response to views expressed by Sri Naresh Bansal (link of same given below)
Link to Views Expressed By Sri Naresh Bansal

S No	Observations made by Naresh Bansal	My Reply
1	In terms of Pension Regulations, there is a Pension trust in each Bank which is a separate legal entity distinct from concerned Bank Management. The Bank may cease to exist legally in future but concerned Pension Trust will not cease to exist along with it. Pension Trust is under legal obligation to pay Pension to the retired eligible Bank Employees and officers and Bank Management are not under any legal obligation to pay the Pension.	Please read this provision in Pension Regulations: “The power to appoint the trustees shall be vested with the Bank and all such appointments shall be made in writing.” When the bank concerned appoints the trustees of Pension Fund, how one may call the Pension Fund as autonomous and it has a separate legal entity? Suppose the bank concerned has been merged with another bank, what will happen to this Board of Trustees?  Will they continue to manage the affairs of the Fund as before and pay pension to the erstwhile staff of the now defunct bank?  I do not think so.  In the event of merger, it is quite logical that the funds of both banks also get consolidated and there will be only one board to manage this consolidated pension fund.  So, in effect, the old Trust gets dissolved and may be some of its members are absorbed into the new fund trust.
2	Any settlement between IBA and Unions is binding on Banks but not on Pension Trusts, legally. Pension trusts do not comes within the definition of 'Employer' under ID Act and hence there cannot be any settlement between unions and Pension trust.	It is true that the Unions cannot negotiate directly with the Trusts.  But, due to the fact that individual banks control the Pension Fund Trusts, any settlement entered into with the respective banks or their confederation like IBA will be binding on these Trusts too.
3	Pension is not paid out of Capital Fund but out of interest and earnings from this Capital Fund owned by Pension Fund.	I do agree.  But, Rule No.11 says as follows:  Actuarial investigation of the Fund: The Bank shall cause an investigation to be made by an Actuary into the financial condition of the Fund every financial year, on the 31st day of March, and make such additional annual contributions to the Fund as may be required to secure payment of the benefits under these regulations: Provided that the Bank shall cause an investigation to be made by an Actuary into the Financial condition of the Fund, as on the 31st day of March immediately following the financial year in which the Fund is constituted.   It means, banks are under obligation to meet the shortfall in the fund from out of their profits or provisions made for this purpose or from General Reserves.
4	Pension Regulations provides that concerned Bank shall meet the short fall in Pension Fund on regular basis.	Already explained above.
5	Acquires calculated 6000 Crores and Banks refused to pay it. Leave the history and historical struggles' aside, UFBU succeeded to bargain that CPF optees will be given 2nd option to pension provided they not only transfer Bank's contribution to Pension Fund but also pay 180% of their revised basic pay under 9th BPS i.e. equal to CPF for 15 years as a cost of mistake committed by them in 1995.	(a)   Let us not forget the fact that the employees who did not opt for pension earlier had to bear 30% of the shortfall (Rs.1,800 Crores), by paying 2.8 times of their revised salary for November, 2007. (b)   It is unfair and unjust to call this as the penalty to those employees, for not exercising their option for pension at the time of the earlier opportunity.

6	IBA and UFBU neither are simply incompetent to hike any pension liability of Pension Trust nor can divert any rupee from the agreed wage load reserved for the employees on roll as on cut off date i.e. 1.12.2012 to pass on any benefit to the pensioners who have retired on or before 31.10.2012.	As I had already explained, but for shelling out from their arrears receivable, these employees would have got more arrears which are nothing but wages for the past period.  Another point here is banks were relieved from the burden of contributing additional amount as mandated under Rule No.11 of Pension Regulations 1995 for the Pension Fund.  So, to that extent, banks’ profits were allowed to increase, without passing on extra wages to the employees, arising out of such savings. There is no answer to the charge that why pension of bank staff was not allowed to be revised with each wage revision on the lines of RBI and Central Government Staff Pension?
7	Amount agreed for any Wage Revision cannot and has not been ever appropriated to meet this shortfall, which is otherwise legally born by Banks.	But for the extra financial burden caused by extending pension to the new batch of employees (who are in large numbers), the banks could have paid more wages to the serving employees.  Can this fact be challenged?
8	It is so because the legal authority i.e. acquires is telling each Bank year after year that mere 10% of Basic pay to Pension Fund is not enough to pay pension to existing employees in future and Banks are paying year after year something more than 10% of Basic Pay to Pension Fund to meet these liabilities.	My question is ‘what is that extra something’ provided for by each bank, on the advice of their Actuary?  Is there any statistics to support this?
9	Truth is that wage revision does not change pension of employees already retired. Moreover, if there is no wage revision, cost of pension in respect of existing employees also does not change.	That’s what I too am asking.  Why pension of employees already retired should not change?  In the absence of wage revision also, there will be increased burden on account of periodical increase in Dearness Allowance.  So, the second statement that the financial burden remains unchanged is wrong.  However, it is agreed that had there been wage revision, this financial burden will be more.
10	But what about those who are on roll as on 1.11.2012? With merger of Basic and DA, their Basic Pay will go up by at least 60.15%. With increase in Basic pay of all, Basic Pension of all, who retired after 01.11.2012 or who will retire in future shall go up. Commutation to be paid to them will also go up. Their Gratuity will also go up. Their leave encashment on LFC/Superannuation will also go up. Contribution to NPS for post 01.04.2010 will also go up. Can we have a settlement to increase Basic Pay without these consequential benefits flowing there from? To say No, no extra ordinary wisdom is needed.	I do not understand the rationale why he puts forth this argument.  Nobody said anything to the contrary.   In fact, we want merger of D.A. at a higher level (4876 points or 76.50%) with the present Basic Pay.
11	cost to pension is not 10% of Basic Pay, acquires forced them to contribute more than 10% of Basic pay towards Pension Fund, Bank last year and will ask them to pay that % towards pension fund on revised Basic Pay too and hence out of 100, not 30 but all this additional cost has to be taken in to a/c.	This point has already been answered.
12	Has this appropriation of a small amount of wage increase cost towards pension cost, towards gratuity and towards NPS in respect of employees on roll is cheating, fraud, siphoning of funds of employees as alleged?	See, here Mr Naresh Goyal has contradicted himself, vide his own statement under Point No.7.

13	Can 11% of this time as rejected by UFBU is comparable with 17.5% of last BPS. It should be clear to any one that 17.5% of last time gave us only 10.9% in pay slip components. What was achieved last time in wage revision is on table but UFBU is not taking it.	It is highly insulting to recommend for a paltry hike of 11%, when bank staff are already grossly underpaid, as compared to most of others in the organised sector.  Moreover, this lie of “11% in pay slip components is equal to 17.5% of total wage cost” is repeatedly spread, only with a view to mislead the ordinary bank staff.  Let Mr Naresh Goyal explain with complete statistics to substantiate his statement.
14	UFBU can have any increase in wages if it agrees to outsourcing to close the Banks' door for Gen-next, compromise on working hours, accept free mobility, scrap the promotion policies, fitment formula on promotion, Pay Band instead of Pay scales, Span of 40-50 years instead of existing 18-20 years, compromise on Disciplinary rules, agree to fixed and variable cost, agree to CTC concept, agree to more duties, do away with maker checker concept, list is rather very long.	No fool would accept higher wages by agreeing to all these adverse service conditions.    So, Mr Goyal, do not let your imagination run riot.
15	Should FB friends be so casual to talk it in public domain among the unaware Bank employees and officers instead of having time or guts to attend union meetings to know the truth or meet leaders in every bank. Is AIBEAGS appointing Regional Secretaries in SBI or in any other bank?	Here, he has openly admitted that he is an advocate of AIBEA.   But, I accept his challenge on the condition that the dissenting voices must be heard fully by your leaders till the end and no physical harm is caused to any of the persons, who put forth differing views.
16	Every Sunday, every holiday and even in election, there is no-banking transaction. Even on strike, ATM, e-banking is undertaking transaction.	First and second statements are mutually contradictory. But, I do agree that customers today have several other delivery channels like ATM, Internet Banking, Credit Cards, Debit Cards, POS Terminals, Mobile Banking, RTGS/NEFT through internet banking etc.  But, these facilities are actively used by less than 3% of the bank customers.
17	Agitation is built up step by step.	Agreed.  But, will there be 3 months gap between one step and another?
18	IBA and Government will come to terms to concede very simple demand of UFBU 'IMMEDIATE SETTLEMENT OF WAGE REVISION'.	I loudly laugh on reading this.  Talking about ‘immediate wage revision’ after 24 months has elapsed is ridiculous.  Instead, admit your failure openly.  Give way to a new team.

 

 

Clause No.12 of Pension Regulations state:

 

Investment of the Fund –

All moneys contributed to the Fund or received or accruing after that date by way of interest or otherwise to the Fund, may be deposited in a Post Office Savings Bank Account in India or in a Current Account with any Scheduled Bank or utilised in making payment of pensionary benefits in accordance with Pension Regulations and to the extent such moneys as are not so deposited or utilised in accordance with the provisions of the Indian Trust Act, 1882 (2 of 1882).

 

I do not know how the pension fund is being parked or invested by the Trusts in various banks.  But, there are no uniform guidelines in this regard, to my knowledge.  Nor there is any transparency.  Therefore, it is imperative that something has to be urgently done in this regard, to make the pension funds more transparent and the Trusts managing them more accountable.

 

 

Date: 12-11-2014                                                                                                                     pannvalan