Wage Revision And Pension Load

Naresh Bansal says on Facebook

  WAGE REVISION LOAD – FUNDING OF OLD PENSION OUT OF IT – ROLE OF UFBU LEADERS: MYTH AND TRUTH


  FOR THOSE WHO ARE INTERESTED IN TRUTH, WHOLE TRUTH AND ONLY THE TRUTH

 Facebook , FB friends are alleging that Retired Leaders are more interested in pensioners and in their pension, stealing the money of wage increase to transfer most of it to Pension Funds and hence credibility of UFBU leaders, their loyalty and reliability to protect interest of all is doubtful and suspicious.

  In fact some of the FB friends are calling them thieves, criminals and sworn enemies of young Bank Employees. In democracy, they are eligible to have pleasure by such expression in public. Abuses, threats and lunatic comment apart, if there is even 00.01% truth in the assumed allegation, they should naturally feel cheated and concerned.
But is there any truth or possibility of being it true?

 Should well educated and intelligent young bank employees and officers merely believe it or should find out the reality themselves?

 Should young bank employees and officer not know how the old Pension Scheme is funded or whether this pension on month to month basis is paid by any Bank Management or UFBU or unions has anything to do to take of care of payment of pension or UFBU is as a true fact even capable to increase this pension?

  Pension Regulations 1995 were notified by Government of India with consultation with RBI on resolutions passed by Board of each concerned Bank – public or private. Aforesaid procedure is to be followed for any amendment in the aforesaid Pension Regulations by Government. Even the resolutions passed by Banks' Boards are not legally binding on GOI and GOI has sweeping powers in these Regulations to modify Pension Regulations even at its own. Everything is in Pension Regulations notified by Government through gazette notification. Old Pensioner gets pension only as per provisions of these Pension Regulations, as modified from time to time, which is transparently available on Government portal on web.

  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.
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.

Pension is paid in accordance with the regulations duly notified by GOI and as far as retired leaders or common Bank employee or officer is concerned, not even extra Rs. One can be paid as pension to any one unless Pension Regulations are amended by the Government.

  Those who do not know, must know that Old pension scheme is in lieu of contributory PF and contribution by employer Bank in PF a/c of the concerned pension optees was transferred from PF accounts to Pension Fund. In respect of all employees who joined up to 31.03.2010 and opted for old pension scheme, each bank is legally bound to pay 10% of Basic Pay to the pension fund regularly during period of employment. The corps of funds owned by Pension Trusts is known as Capital Fund which is invested in Government and other securities as per Government directions applicable from time to time. Pension is not paid out of Capital Fund but out of interest and earnings from this Capital Fund owned by Pension Fund.

  It may be so that pension payable is more and earnings from Capital Fund are less that may lead erosion in Capital Fund and consequential bankruptcy of Pension Fund any time in future. Hence Pension Fund should be healthy and well managed. For doing that, size of estimated Capital Fund sufficient to earn enough in future to meet pension liability for all the years to come needs to be assessed regularly so that such a situation does not arise in future.

  It is a very big problem, indeed. How to calculate this amount in respect of so many employees retiring in next 5, 10, 20 or 40 years? How to calculate how much pension shall be payable in distant future to an existing employee with so many variables?

How many die at what age pre or post superannuation? How many will actually marry but not divorce is also a relevant factor as it has a bearing on Family pension liabilities in future?

Attrition rate, expected age, mortality rate, premature death rates, trend of resigning to join elsewhere, rate on interests, wage pattern in future, inflation rate, increase in DA, earning from investments in securities and shares are all relevant factors to calculate it.
If there is a problem, there is a solution is what saying says. Like every Pension Fund, Insurance Companies have also to calculate it to fix their insurance premium. Contribution in Pension Fund is like Insurance Premium to cover the defined future benefits to the pensioner. There are experts for doing it. Insurance companies use the services of these experts. They are better known acquires.

 Under Pension regulations, each pension trust has to find out the requirement of Capital Fund at the end of each year vis-a-vis size of Pension Fund to determine the requirement of contribution to be made by Bank to Pension Fund so that the earning of Pension Fund is enough to serve not only existing pensioners but all existing employees in respect of pension to be paid in future. Pension Regulations provides that concerned Bank shall meet the short fall in Pension Fund on regular basis. This contribution is determined in terms of % of Basic Pay of existing employees. Old Pension was in lieu of 10% contribution by Bank in PF.

 When Pension Scheme was introduced in 1993, existing employees and officers were given option to choose Pension or to continue in Contributory Provident Fund Scheme. Though the cost to Bank was 10% whether CPF or Pension, two scheme are a little different. CPF is a defined contribution scheme i.e. where what employer will contribute is defined but actually what employee will get on retirement is not defined. It may go up or down with increase in Basic Pay or due to change in interest on PF. Pension is defined benefit scheme i.e. Pension as a percentage of Basic Pay preceding retirement or death is defined but for paying that Pension, what employer will contribute annually is not defined. NPS is also a defined contributory scheme with no guarantee of what Pension one will get. NPS is equal to old CPF but better to that as contribution by bank is on 10% of Basic plus DA unlike CPF, where it was 10% of only Basic Pay.

 Since Pension Settlement was fought and achieved exclusively by AIBEA, some of the other Unions opposed it. They argued and campaigned that CPF is better than index linked pension. They were confused as interest rate at that time were 14%, inflation was no so high, they did not factored in future wage revision and thus were able to confuse many, mostly officers to not opt for Pension Scheme. Their members found the truth but a little late when two employees who joined at same time and retired at same time and both of them compared interest on CPF received by CPF optee on retirement with CPF scarified minus commutation and interest on this amount with pension received by Pension optees. Gradually these CPF optees started blaming their unions for wrong advises of such unions and this section forced these unions to somehow cover them in old Pension Scheme. When these employees and officers realised that Pension is better than CPF, management also found that Pension is costly as compared to CPF.

IBA Chairman ridiculed Great Leader Com. Tarka Da when he submitted a charter of demand for 2nd option to these employees and officer. Government refused to amend Pension Regulation unless Capital Fund of Pension Fund is suitably and adequately funded to take this additional liability of 2nd option. 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. UFBU could reduce this cost born by 2nd pension optees as 30% of the cost was contributed by Banks to fund Capital Fund.

It appears a big cost for a small mistake but almost every one jumped and opted for 2nd Option. Not only employees but those who retired in between and if they died, their family members too deposited this contribution out of their resources to take 2nd pension option.
But this long story has nothing to do with the young Bank Employees and officers except to know the truth, whole truth and only truth in present context. 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 such all the abuses, filth direct from those minds which contains nothing but gutter material and the campaign is simple fiction, untrue, baseless, unfounded, mischievous and concocted, not by mistake but by design aimed at to disturb our unity at crucial juncture. They are saying destroying Unions is their priority no. 1. They are wrong. It is not their priority but the priority of Bank Management and Government not today but since 1946. Our unity had defeated such attacks in past and such attempts will be checkmated by our unity and faith in unions this time too.

  Not all FB friends are in it knowingly, most of them are innocent but few easily identifiable are being used by a particular party and by a leader who has been removed from the General Secretary post of one constituents of UFBU, with his known and verifiable loyalty towards the Government in power. We cannot forget another leader on the verge of retirement giving distorted version of history of Bank Employees movement without telling the whole truth viz. employees of PNB, where he works, employees of NBI, where he worked earlier knows him better and hence he could not become representative of even 1% of employees and officers of that bank during four decades of Bank service.

 Truth is that even if there is no wage revision at all, liability of pension fund increase due to increase in index linked DA and restoration of commutation or less earning rate on same Capital Fund depending on market forces. Every Bank is under obligation to meet it without any CHV or UFBU arm-twisting IBA or member Banks as propagated. Amount agreed for any Wage Revision cannot and has not been ever appropriated to meet this shortfall, which is otherwise legally born by Banks. It is another matter that Pension Funds are kept financially healthy annually that such a situation has never arisen in any Bank to need any money from wage increase load for existing employees.

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. Thus as on date, without wage revision each Pension Fund has sufficient Capital Funds, earning of which enough to serve the pension liability towards all employees covered by old pension scheme as also towards family pension to be paid to eligible family members alive in future till they also die.

  Young Bank employees and officers need not worry as in future too; this legal obligation of Bank is adequately and duly guaranteed by Government of India through Gazette notification. They need not be afraid of the unions or its leaders – working or retired as neither they need or can divert a single rupee to Pension Fund out of agreed load on establishment cost due to wage revision.

 Is it really true?

If it is so, why all this confusion at the time of each wage revision and why a part of wage increase load is shown towards pension cost?

Nothing is diverted as claimed above and still something shown as Pension cost out of agreed overall wage increase in every BPS after 1991?

 What is this contradiction?
How both can be true?
What is the real and actual truth?

  Unless one has answers to these questions also, forces doing overtime to break our unity – unity of Safari Karmcharies, clerks and officers – Scale I to VII, unity of young, not so young, old and superannuated and unity of all Bank employees irrespective of their religion and political faith will continue to spread confusion, hatred and whatnot through this dirty game.

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.

  However, present wage revision due from 01.11.2012, agreed to be effective from 01.11.2012 will see Basic Pay going up by at least by 60.15%. It will have no effect on Basic Pension of those who retired or died up to 31.10.2012 Commutation paid to them is not going to be reopened for them. So poor CHV cannot get any arrear of pension or commutation as he retired long back. Is it not? Still if someone wants to live in Fools' paradise, it is his choice.

  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.

  Truth is that if Unions agreed for a load of Rs.100.00 in wage bill in last BPS of 17.5% and supposed settle that Rs.30 out of it will be on revision of Basic Pay, can unions ask the IBA to shut their mouth and not to talk of increase in Basic Pension of already retired in between or to be retired in future, in their commutation, in NPS contribution, in gratuity etc and force IBA to not even tell UFBU that 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.

Can anyone negotiate a deal in collective bargaining with right to Unions to speak and Management keeping mum except moving their Head in token of agreeing? But calculation is in respect of employees on roll as on 01.11.2007 and not employees who cease to be on roll as on 31.10.2007. UFBU is able to bargain this cost on pension of existing employees by accounting for only a part of this additional cost of pension beyond 10% of basic pay, though no such bargaining is possible for Gratuity and contribution to NPS.

  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?

Unions know the potentiality of such campaign in past. It is generally perceived that if union is telling BPS is for 17.5% and my pay slip does not show increase of 17.5%, I may feel confused and in the absence of full knowledge even cheated. To overcome it, UFBU demanded that wage increase this time should be defined in terms of Pay Slip component visible to all employees and officers. 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. Is UFBU committing some sin if UFBU want every ounce of possible increase in wage revision through collective bargaining by resorting to agitation and not being happy with the offer of IBA?

FB friends are saying UFBU has nothing to show for two years negotiations over hard drinks as some friends are posting on FB. How many strikes have so far been conducted by UFBU for present wage revision? Can every one forget it?

There are three method of bargaining. Give less and take less. Give more and take more. Give less and take more. What a common man do in market in purchasing vegetable through bargaining. Take less potatoes weight by paying less?

Taking quintals of Potatoes by paying more?
Or purchase adequate quantity required for minimum cash? Should UFBU do something else?

 What we can pay in collective bargaining?

Sale your basic rights providing job, job security and dignity to meet requirement without resorting to illegitimate means. 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. Should be give more to take more?

Can UFBU agree to give nothing and accept wage increase that does not meet the expectations of rank and file? Is there any barometer to help the UFBU to measure what % increase will satisfy all the one million employees?

Accept 3rd party adjudication with automatic scraping of Bank level settlements in various banks on innumerable issues, full knowledge of which is not codified anywhere and only few in each bank knows it in full?

Some are eager for CPC, which is not feasible and even if available, as a package will be against common good. 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 AIBEA GS appointing Regional Secretaries in SBI or in any bank?

  We cannot sale anything but we have to get wage revision. To get it, we can use every weapon in our command. It requires a lot of investment to attain that objective. Protest demonstration, black badges, mass meetings and campaigning among members as also among public including our customers is also integral and important part of agitation in a democratic system. Our strike does not affect Bank or Government. It only brings some adverse public opinion for Government and inconvenience to the common customers. It cost us wage cut. It is very easy for 10 union leaders to stand on the gate of some factory and not allow the workers to go inside and make strike successful.

We are spread in 80000 branches in 600 districts with handful in each branch. UFBU merely issue circular, it is those one million spread everywhere that makes the strike complete and total. Some are confused to assume that strike is simple no-banking transaction. Every Sunday, every holiday and even in election, there is no-banking transaction. Even on strike, ATM, e-banking is undertaking transaction.

Is it strike?

Read the dictionary meaning of STRIKE. It is collective expression of our united opposition of the attitude of Bank Management and Government. At time we do it by various agitational methods and at appropriate time by Strike. Some says why one-two days strikes and not straightway indefinite strike?

 Strike is last weapon. Than what to term 'indefinite strike'?

Is it triggering to Atom Bomb?

We do not know. But we know that strike and indefinite strike is altogether different things. Powerful countries having weapon of mass destruction are using it only to ensure that opponent do not use it before. It is not that we do not have history of indefinite strike. We have created history of not indefinite strike but successful indefinite strikes, though there is hundreds of indefinite strike in our country in different sectors which ended without attaining objective. Unions are capable to organise it as in past but you cannot jump to beyond last step before covering all steps. Agitation is built up step by step. Why these people have ignored that the moment IBA took the stand that 11% is last offer, UFBU gave strike call, an all India token strike, followed by four days that will ensure virtual strike effect for four days all over India, whether on strike or not

  We have nothing to advise Bank employees and officers who have designated themselves as WE BANKERS' or those who are roaring on FB. Good luck to them. Common Bank employees and officers who are losing hopes of a early and respectful wage increase that is just and right are becoming restless. IBA and Government are not reasonable. It is showing rigidness. There approach is unhelpful and dictatorial. We have a FM who very innocently enquired UFBU as to how the wages of Bank employees and officers is fixed, as if he has just landed in the country. Government appears to be powerful with no visible opposition inside and outside parliament. We are not in competition in making or breaking Governments.

We have our rights protected in the Constitution and in law. Bank Managements will be better advised to glance at the history. If they want confrontations, unions are ready. Many time Governments over estimated its power and under estimated the power of labour in venturing to deprive or withhold their share in the value addition by labour. On each occasion they failed and working class trumped.

  Negative comments on FB by some friends are good for enjoying by hard working bank employees and officers toiling in remote areas serving the common men and nation but they are not for serious thinking or being relied upon.

Rely on unity, collective strength and determination to wage war, when compelled. This is the time to make strike of 12th November and Relay strike thereafter thunderous successful. IBA and Government will come to terms to concede very simple demand of UFBU 'IMMEDIATE SETTLEMENT OF WAGE REVISION'.
 https://www.facebook.com/aiexbef.india/posts/585312868263527

My Views on above article is as follows

I personally feel pleasure in presenting above article on my blog for the benefit of  all bankers specially thousands of young bankers and We Bankers who are active on Facebook . I salute Mr. Naresh Bansal who has at least tried to clear many confusions and misinformation injected into the minds of  bank employees who joined the bank during last five to ten years and who are not having adequate knowledge  of intricacies of Bipartite Settlement and that of CPC.

Confusion arises only when leaders keeps all developments secret and confined to them only. It is their duty to appraise their members about various hidden points of the settlement  . In olden days there used to be unit secretaries or state secretaries who used to conduct periodical meetings of members and explain filed level staff  from time to time and also used to issue circulars periodically to make the members abreast of all progress they achieved in bipartite talks with management. I agree all information cannot be shared during ongoing wage talk, but clarity can be ensured by periodical meetings.

Unfortunately, during last two years , this aspect has been ignored. Bank staff  who work in villages, town and cities are not aware of what is happening on the issue of wage settlement and what is the real meaning of Pay Slip Rise or Overall rise in Settlement. It s only due to lack of clarity , confusion grows , misinformation spreads and anger takes ugly turn. Now in the age of various social networking sites like Facebook, angry young bankers add fuel to fire. Two years have already passed after the date BS is due and hence frustration and anger against leaders is nothing but natural.

As such it is praiseworthy that at least after two years of  wage talk , one person has come forward  and submitted some clarification on facebook to clear rampant Myth and Confusion among  bank staff  .

Not to talk of young bankers or new generation bank staff , there are several office bearers , senior officers and mature leaders of various trade unions spread in town and cities who do not understand the meaning of CPC or Pay slip rise, or wage load or pension fund etc. It is bitter truth.

Leaders of Unions sitting in big cities and metros to a great extent have become second side of same coin which is represented by Management. There are many leaders who simply speak the language of management. Some leaders exploit their post to torture bank staff and to please some of their flatterers. Culture of flattery has become the way of life not for only bosses but for union leaders too. Some of them are indulged in bribery too. Some are busy in saving some of their colleagues who are accused of committing fraud or doing bad lending. These so called leaders think that their duty is only to make new entrants in banks as their members and hence they do not forget in making member. The problem faced by members is left to whims and fancies of top officials of bank . Top bosses also think it wise to keep a few leaders happy so that they may rule and exploit bank staff as per their choice .This culture has annoyed many bank staff, not only freshers but also old guards who have spent decades in bank.

In modern era of trade union activities, bank staff can talk comfortably with his branch head or Regional Head or Zonal Head or even  ED or CMD . But is very difficult for a bank staff to talk to any General Secretary or office bearer of any union for redressal of any grievance.

I therefore appeal to trade union leaders to try to take their followers into their confidence and do not allow them to be confused with rumours or spread confusion in social sites. They should introspect to find out the reason why young bankers or we bankers are annoyed with leaders of UFBU. They should try to understand why members do not actively participate in demonstration or in N0-cooperation agitation or avoiding late sitting etc. They should try to understand why do they prefer becoming Yesman of their immediate boss of higher authorities instead of depending on trade union leaders. They should find out why common bankers think it wise to bear with all steps of injustice of the management .They should discover why bank staff do not think  it safe to share their problems with their leaders. 

They should try to allay all doubts and confusion of aggrieved bankers by frequent meetings, local debates and discussion, state level meetings  and written circular .

I once again salute the writer of above mentioned article and I hope many others who have better idea and better knowledge about wage settlement will submit their views in the interest of bank staff  and to maintain rock strong unity of bank staff.