Increase In Pension Needed

A Strong Case for Updation of Pension – Sufficient Funds Are Available With Pension Funds to Go for Updation of Pensions--By  S. Ramachandran      (source: allbankingsolutins.com)

Background  by ABS :

The 10th BPS negotiations have crossed the 1st Phase.   The DA merger upto 4440 points and an increase of 15% on Pay Slip has been agreed upon by UFBU and IBA.   These negotiations have stretched for more than 28 months now but final signing of BPS still seems to be at least 90 days away.

We have been taking up the cause of  SERVING  bankers on a war footing.   We have written a large number of articles exposing the nexus between IBA and UFBU and how both of them have done irreparable damage to the cause of an honourable wage revision.    My RETIRED  friends have been regularly asking the reasons for my silence on the issues relating to bankers who have already retired and are facing number of anomalies.   Some of them have been forced to knock at the doors of Courts, others are getting pittance as pension.

I apology from my retired bankers that I have not been writing much about their issues in recent times specially relating to 10th BPS.   There was a purpose behind.    I have a strong desire that first of all the serving bankers must get their due share.   Moreover, taking up both the issues simultaneously is used by some leaders to create a wedge between serving and retired bankers.

I am happy that this time IBA has divided the wage revision into two broad categories  i.e. one for serving bankers and other for retired bankers.   I think now is the time to take up the issues of retired bankers as the fate of the SERVING bankers has been sealed after agreement dated 23rd February 2015.   Now only finer tunings have to be done in construction of the scales.   Therefore, now serving bankers should not have any grudge against retired bankers as whatever could have been extracted from IBA, has been extracted by UFBU (howsoever small it may be) for the serving bankers.

To start the awareness campaign for the issues relating to retired bankers, we give below extracts from a  letter received by us from a very senior retired banker S Ramachandran (E-mail id: ramans1938@gmail.com  ), which has been sent to various authorities in GoI and IBA.  This letter gives the background and raises some of the important issues :-. 

 

 

Dear Sir,  

 RE- ILLEGAL ARBITRARY DENIAL OF  

 

    1 100%  DA  NEUTRALIZATION TO SENIOR CITIZENS WHO RETIRED FROM THE   BANKS SERVICE   PRIOR TO NOVEMBER 2002.

                2. DENIAL O0F FAMILY PENSION AS PAID TO GOVT  AND RBI EMPLOYEES .

 

     3.  DENIAL OF PENSION UPDATION FROM TIME TO TIME AS GIVEN TO GOVT   AND RBI EMPLOYEES    WHICH IS VIOLATIVE OF ARTICLE 14 AND 16 OF    

      THE CONSTITUTION OF INDIA .

 You are requested to pay attention to the following facts and help the retirees and ensure that the 10th Bipartite Settlement is not approved without the favourable consideration of the undernoted  pending issues of the retirees:

 

     1.      Existing Pension Scheme in PSU Banks.

 

In pursuant to a Settlement between Bank Employees’ Representatives and Bank Managements’ represented by Indian Banks’ Association ( shortly called as ‘IBA’), on 29.10.1993, Bank Employees Pension Regulations 1995, was framed in exercise of powers conferred under clause (f) of sub-section (2) of Section 19 of Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970. The respective Boards of Directors of the PSU banks have adopted the framed Regulations in their Boards, after consultation with the Reserve Bank of India and with the previous sanction of the Central Government, and by notification in the official gazette of Government of India, on 29.09.1995, Bank Employees’ Regulations, 1995, came in to force of Law from the date of notification i.e., 29.09.1995.  Originally, these Regulations were contemplated to apply to the employees who retired after 01.11.1993, but later on, it was extended to the employees, who retired from 01.01.1986 onwards.   According to Clause 12 of the Pension Settlement dated 29.10.1993,

Provisions will be made by a Scheme, to be negotiated and settled between the parties of this Settlement, by 31.12.1993, for applicability, qualifying service, amounts of pension, payment of pension, commutation of pension, family pension, updating and other general conditions etc, on the lines as are in force in Reserve Bank of India.

 

2.      Updation of Pension

So, there was intention on the part of parties to the Settlement dated 29.10.1993 to update the pension, but when the actual Regulations were regulated in 1995, IBA has not included the vital aspect of UPDATION of Pension for the reasons known to themselves. That is to say that IBA has drafted partial Regulations based on the Settlement dated 29.10.1993 and not framed the full/total Regulations, based on the Settlement dated 29.10.1993. Though there is clear mention of Updating in the above clause referred, unfortunately it is not in force in Reserve Bank of India.

 But the word ‘ Pension ‘ includes,

 a. different types of pensions, including family pension,

 b. commutation of pension,

 c. restoration of commuted pension,

 d. suspension of pension,

 e. withholding of pension,

 f. withdrawal of pension,

 g. forfeiture of pension,

 h. updation of pension,

 i.  dearness relief on pension,

 j.  and so on and on.

 

When the Pension Scheme was introduced, suspension of pension, withholding of pension, withdrawal of pension, forfeiture of pension, are included in the Regulations 1995, as part of “other general conditions etc “, of clause 12 of the Settlement referred above, but the updation of pension was not included as part of “other general Conditions etc”, of clause 12 of the Settlement referred above. This is against the Principles of Natural Justice. Hence the Pension Regulations 1995 is only a part of Settlement dated 29.10.1993 and there is need and demand for amendment of Pension Regulations 1995, for inclusion of Updation of Pension in the Pension Regulations, as Pension and Updation of Pension, are not different,  Updation of Pension is part and parcel and integral part of Pension as a whole\

 

    3.      Pension Funds Position in Pension Funds Trusts of PSU Banks.

 The following table gives the factual and actual position of pension funds

                                                                 ( Amount in Crores of Rupees)

Name of the Bank	Opening Balance	Annual Contribution	Interest Income	Benefits paid	Actuarial Loss/Gain	Closing Balance
Allahabad Bank	3697.49	590.92	312.89	243.27	-214.38	4143.65
Andhra Bank	2834.32	177.85	230.15	157.54	95.96	3180.74
Bank of Baroda	7502.04	1080.10	616.31	502.76	-436.21	8259.48
Bank of India	7404.65	804.95	658.35	605.48	-224.22	8038.25
Bank of Maha	2772.84	457.90	226.87	207.40	-33.94	3216.27
Canara Bank	8584.93	149.83	672.06	596.28	225.32	9035.86
CBI	7190.56	166.74	600.80	578.07	758.99	8139.02
Corpn Bank	2148.55	71.34	184.63	77.00	145.68	2473.20
Dena Bank	1761.94	202.02	149.98	190.88	-5.12	1917.94
Indian Bank	4521.26	57.07	406.55	318.32	263.75	4930.31
IOB	4865.10	82.46	408.30	397.65	468.28	5426.49
OBC	3342.17	106.29	284.08	91.14	191.38	3832.78
PNB	13559.18	358.28	1118.17	652.83	779.99	15162.79
PSB	2419.87	211.77	209.92	174.73	-173.50	2493.33
Syndicate Bank	4550.04	572.10	366.94	466.09	25.84	5048.83
Uco Bank	3863.62	472.04	310.84	413.28	422.06	4655.28
Union Bank	5991.02	194.81	509.62	380.68	369.04	6683.81
United B of India	2317.55	386.66	191.53	301.79	554.75	3148.70
Vijaya Bank	2009.65	268.90	161.48	219.72	-87.47	2132.84
Total	91336.78	6412.02	7619.47	6574.91	3126.20	101919.56
Associate Bks
SBH	2588.59	126.46	208.64	167.48	136.30	2892.51
SBBJ	2335.53	53.48	216.50	154.01	242.75	2694.25
SBT	2216.64	37.70	207.23	125.44	-100.60	2235.53
SBM	1152.24	222.92	96.26	104.17	-43.96	1323.29
SBP	2252.73	64.32	208.83	109.17	63.77	2480.48
Total excl SBI	101882.51	6916.90	8556.93	7235.18	3424.46	113545.62
SBI	39564.21	872.37	3362.96	2762.88	4200.33	45236.99
Total of PSU Bks	141446.72	7789.27	11919.89	9998.06	7624.79	158782.61

 (These figures of Pension Funds are available in annual reports of respective bank’s website)

  Now it is pertinent note and drive a factual and actual point here, that the total interest earned on pension funds in financial year 2013-14 amounting to Rs. 8557 crores, has serviced pension pay out in the said financial year amounting to Rs, 7235 crores in cases of PSU banks and but still there is incremental growth from Rs. 101883 crores to 113546 crores in the said financial year, i.e.,a net of Rs.  11,663.00 crores, in which contributions amounting to Rs. 6917 crores has been added to the corpus fund growth. In all the PSU banks, the interest earned on pension funds has serviced the annual pension payouts. 

 

    4.      Justification of Pension Updation and 100% neutralisation of D A

When such is the factual and actual pension funds position stood as thus above, Bank of Baroda has admitted that it requires Rs 8 crores per month to allow updation of pension in case of officers, i.e Rs. 96 crores annually and on the same lines it is expected to cost another Rs. 100 crores to award staff annually, aggregating Rs. 196 crores, ( say Rs. 200 Crores annually in one PSU bank ) at current rates. However, it is disheartening some individual banks and Indian Banks’ Association have misrepresented the facts to the various Honourable High Courts and Supreme Court in the country, by submitting 

 

a. that the Pension Scheme is a Self Financing Scheme,

b. that the Financial Implication of Pension Fund would be adverse

c. that there is no provision to provide updation of pension and 100% neutralisation of Dearness Allowance

d.  and so on,

 

That is, not submitting to the honourable courts about the factual and actual position of pension funds, by the banks and IBA and on the other hand, individual retirees and retirees’ associations’ petitioners have not brought to the notice to the honourable courts about the sound pension funds position of the banks, therefore, there are unfavourable orders from the honourable courts

Now it is clear to the individual banks, IBA and UFBU to take stock of factual and actual sound position of pension funds of PSU banks and work out the cost of pension updation and 100% neutralisation of D A. So In this regard, it is requested to Secretary DFS, to give suitable instructions to the negotiating committee of IBA, as the demand for updation of pension and 100% neutralisation of DA is viable and affordable. So also the Apex Court has upheld the theory of One Rank One Pension recently in respect of Retired Judges’ Pension case.

From the above you will observe that IBA HAS MISERABLY FAILED TO ADOPT” ALL THE OTHER GENERAL CONDITIONS” ETC OF CLAUSE NO 12 OF THE PENSION SETTLEMENT DATED 29-10-1993 AND ALWAYS FRADULENTLY MISLEAD YOU AND THE COURTS BY GIVING THE FALSE INFORMATION  ABOUT THE PENSION FUND POSITION OF ALL THE BANKS AND THEREBY MENTIONING THAT BANKS FINANCIAL POSITION  CANNOT AFFORD THE ABOVE STATED DEMANDS AS STATED IN SUBJECT .

You are, therefore, requested to settle the matter without any further delay

Further In view Of The Above Hardship And Problems Created By The IBA I Feel There Is A need To Have  The Presence Of Retirees Representatives In Pension Fund Trust As Per Regulation No 8 And Sub Regulation Nos 1 And 2 Of Pension Regulations 1995 to Safe Guard The Interest In The Management Of Pension Fund  And  Also Staff Welfare Funds Of The PSU Banks.  This Would Be On The Lines Of Article 43 A Of The Constitution In Which Workers Participation In The Management Of The Board Of PSUs

 

Lastly I may inform you that the decision OF ILLEGAL, ARBITRARY DENIAL  in the above three matters has been taken by IBA without your and RBI consent WHICH IS A MUST.  RBI HAS CONFIRMED TO ME VIDE THEIR LETTER NO CO/RIA/1618/04.03.001/2014-15 DATED 24^TH JULY,2014 stating that they have not issued instructions in respect of all the 3 matters referred to above to BANK OF BARODA AND ANY OTHER PUBLIC SECTOR BANKS

FURTHER ALL THE PENSION   ISSUES SHOULD BE DISCUSSED WITH THE PENSIONERS AND THEIR ASSOCIATIONS INSTEAD OF UFBU AS THEY ARE NOT ABLE TO UNDERSTAND AND APPRECIATE THE  HARDSHIPS FACED BY THE RETIREES.

Yours faithfully,

Sd/-

( S Ramachandran )

PENSIONER, SENIOR CITIZEN AGE 76 YEARS

AND FORMER GENERAL MANAGER, BANK OF BARODA”

 

Comments by ABS :    We feel Mr Ramachandran had put a lot of efforts in collecting the above data and all the retirees must appreciate the hard work put up by him at this age (76 years).   He seems to be an example of rare people who fight to the last.  It is challenge for IBA and UFBU leaders to deny the above facts.    The above facts are glaring and make a strong case for updation of pension.   IBA and UFBU are on weak legal as well as financial wicket to deny the retirees their due share.   The readers and union leaders and IBA / GoI must go through these facts and if any anomaly is detected the same may be placed in the comments column so that these can be further discussed and corrected.   In case UFBU leaders agree with above facts, then there is no reason as to deny the updation of pension.   This forum is now open for discussion and view points of even  those who say that bank balance sheets do not allow updation of pension.

Will New Salary Structure Result in Lower Pension for Retirees between 2012 and 2017?   UFBU Urgently Needs to Clarify Whether New Allowance Will Attract DA?-By Rajesh Goyal

Our last two articles namely 

(a)  UFBU Seems To Have Made A Complete Sell Out to IBA Specially For Officers?   The fate of Bankers Retired / Retiring Between 1st November 2012 and 31st October 2017 Seems To Have Been Completely Sealed ?  

 (b)   Controversies of Interpretation of Clauses of Agreement Dated 23rd February 2015  -  Some Questions That Needs To be Answered Immediately by UFBU Leaders 

have been widely read and have come under close scrutiny of unions as well as Aam Banker. 

 

Based on the feedback, we can say there are broadly two views:-

(1)  Sympathizers  of unions have claimed that we have stretched our imagination and bankers must wait for 90 days to know the truth.  Union leaders are much matured then us and are more trusted for years;

 

(2) Independent bankers have observed that our interpretation are absolutely correct as per the information released till date.   There is  urgent need for clarification by union leaders so that all speculations can be put to rest and in the end bankers do not feel cheated and get only peanuts.

 

However, no union leader is forthcoming with the desired clarification as to why only 2% increase in Basic Pay was agreed upon so as to make a sellout for the recently retired bankers and those who are going to retire by 2017.

Let me once again summaries the options which I can think can be possible at this moment :-

        (a)   There is only 2% increase in Basic Pay, and rest or majority of the increase is given in the form of HRA;

 (b) There is only 2% increase in Basic Pay, and they introduce a new allowance on which NO   Dearness Allowance will be paid and this will NOT account towards pensionary benefits;

 (c) There is only 2% increase in Basic Pay, and a new allowance in the shape of Grade Pay is introduced on which DA will be paid on the lines of Basic Pay (as is the case in GoI scales), and the same will be added for the purpose of pensionary benefits. 

 

 

Let us now examine the implications of the above three options :-

(i)               In case of option (a), it will be disaster for the recently retired and bankers who will retire till 2017.    It will also be disaster for the Officers who are availing leased accommodations.   Moreover, it will compromise with the future gross salary of the serving bankers as they will be denied the DA on such an allowance; 

(ii)            In case of option (b), it will be disaster for the recently retired and bankers who will retire till 2017.  It will be more rational for the serving bankers but they will be denied future increment pay on the allowance as DA is being denied on such allowance; 

(iii)          In case of option (c ), it will do some justice as in this case 15% increase will be across the board but will protect the recently retired bankers as well as serving bankers.

 

My purpose in writing this and previous articles  has been to ensure that Aam Banker who does not have time to understand such intricacies  of the agreements, is made aware and put pressure on UFBU and IBA so that the interpretation of the agreement is done in such a way that it gives justice to everybody including who are gong to retire soon.
 

I am attaching an Excel sheet which is prepared to show how it can negatively affect the bankers who have retired since 1st November 2012 or will retire upto 31st October 2017, if options (a) or (b) are accepted.    Bankers will note that in case of option (a) or (b),  the gross pension after commutation  may be even less than the existing pension option, but the retirees will get higher commutation and higher leave encashment etc.    Thus, they may be asked to choose whether they wish to take retirement benefits under old salary or under new salary.    It will be a case of gross cheating.

 

                                 Download EXCEL file giving the methodology and comparison of retirement benefits under salary as per 9th BPS and Projected Salaries under option (a)

 

Therefore, all the bankers (serving and retiring before 2017) needs to insist that UFBU must ensure that option (c ) or similar option is introduced for the bankers.

We are still waiting for more clarifications on this issue.   In the meantime, let bankers themselves decide about the worth of the agreement.   In case you wait till 90 days and IBA announces its interpretation and UFBU signs the same,  you will not be able to even fight in Courts.   Therefore, you need to discuss the same within your colleagues and participate in the last phase of the settlement which has become very critical and crucial to save the little that IBA has agreed to give.