ALL INDIA BANK RETIREES’ FEDERATION
Ref No:2015/
January 19, 2015
Shri
Rajeev Rishi,
Chairman,
Negotiating Committee,
Indian
Banks’ Association, World Trade Centre,
6th
Floor, Centre 1 Building,
World
Trade Centre Complex,
Cuff Parade, Mumbai - 400 005.
Cuff Parade, Mumbai - 400 005.
Respected
Sir,
MEMORANDUM
ON RETIREES’ DEMANDS
Enclosed herewith, please find our memorandum
containing bank retirees’ demands on improvement of pensionary benefits to past
retirees for your consideration.
Also, we attach two notes on Uniform Dearness Relief
and Updation of Pension to past retirees for your perusal and ready reference.
In this regard, we request you to grant us
appointment on a date and time convenient to you and we shall be much obliged,
if you kindly arrange for a meeting of our delegation with your good self for
elucidating our demands for your consideration.
Awaiting your positive response and thanking you in
anticipation,
Yours Sincerely,
( S.C.JAIN )
GENERAL
SECRETARY
Enclosures:
Memorandum
with 2 Notes.
Shri Rajeev Rishi,
Chairman,
Negotiating Committee,
Indian
Banks’ Association (IBA),
MUMBAI.
Respected
Sir,
RE:
ON RETIREES’ DEMANDS/ISSUES
We have come to know from the
communications issued by you as well as by UFBU that IBA has now improved offer
to twelve and half percent and also has taken initiative to conclude the
negotiation by 15th February 2015.
2. We also find that in the next rounds of
discussion, one of the issues to be discussed will be improvements in
Superannuation benefits. As you know, the past retirees have huge interest in
the superannuation benefits, in particular, improvements in pension benefits.
3. Bank retirees have organised themselves
independently in last one decade to protect their interest and to resolve
pension related issues. Number of bank retirees has already crossed 3 lakhs and
may go beyond 5 lakhs in the next 3 years. All India Bank Retirees’ Federation
is pioneer in organising the bank retirees. It was formed in the year 1995.
Today it has membership of more than 1.25 lakhs.
WHY
IBA SHOULD HOLD DISCUSSION WITH AIBRF ON PENSION RELATED ISSUES BEFORE
FINALISING THE SETTLEMENT:
We have been consistently demanding
that IBA must also hold discussion with AIBRF before finalisation of the
ensuing wage settlement for the following reasons:
(a) As stated above retirees are important stake
holders in the pension related issues;
(b) They have organised themselves
independently;
(c) It is trend in the government, defence and
RBI that retirees are recognised as separate and independent group and are
given periodical audience by the authorities concerned on the pension related
issues. We understand that RBI Governor has held meetings with the
representatives of retirees on pension updation issue in the recent past and
taking into account their views, RBI has
sent proposal on updation to the government for approval. Similarly, Seventh
Pay Commission has given opportunity to the representatives of government
retirees to submit memorandum on pension issues;
(d) AIBRF representatives have been meeting the
Officials of DFS to impress upon them to ask IBA to take retirees into
confidence before finalising the wage settlement. DFS officials are in
agreement with AIBRF’s demands and have assured to send suitable communication
in this regard. We understand that DFS has already written to IBA to hold
discussion with the representatives of retirees;
(e) We have been making request to UFBU
leadership and all its constituents to raise the issue of holding discussion
with the retirees during their meetings with IBA. They are also in agreement
with our demand and have assured us that they will take up the matter with IBA.
We understand that UFBU representatives have already made the request to IBA in
this regard;
(f) The most important point is that holding
discussions with the important stakeholder and taking them into confidence will
be good HR policy minimising disputes, litigation and creating goodwill for IBA
among Senior Citizens.
IBA
SHOULD SHED RELUCTANCE AND HOLD DISCUSSION
Our experience in this area with IBA
has so far been highly disappointing and many times, humiliating too. We are at
a loss to understand the logic and reasoning for having very strong reservations
for not giving appointments to the representatives of retirees and not
bothering to even acknowledge their communications by IBA officials. We feel
that this stand of IBA needs urgent review.
We can assure that we would like to
hold the discussion with IBA in a professional and logical manner and you will
not find quality of our deliberations any inferior.
In
view of the above, it is our humble request to immediately hold discussion with
the representatives of AIBRF before concluding negotiation on pension related
issues.
DEMANDS
AND ISSUES OF RETIREES
AIBRF would like to discuss the following
issues related to improvements in existing provisions of Pension Regulations to
be approved and sanctioned in the ongoing wage settlement.
(1)
UNIFORM DEARNESS RELIEF TO ALL
PENSIONERS
We demand that uniform Dearness Relief
should be paid to all the pensioners irrespective of date of retirement in
terms of the rates, frequency and base. Dearness Relief to those who retired
before November 2002 should be brought at par with the post 2002 retirees.
Present system is sheer discrimination
which needs to be corrected ab-initio in this settlement and arrears for
the past period should be paid. RBI has already granted uniform dearness
allowance to its Pre-2002 retirees with effect from 01.02.2005 with arrears.
Central Government pensioners of all categories have also been getting uniform
dearness relief after the implementation of 5th Pay Commission recommendations.
Pension Scheme operating in the
banking industry is replica of the Government/RBI Schemes in terms
of spirit, object and provisions. Further, it is a
matter of record that IBA entered into legally enforceable settlement with Unions
that DA formula for bank pensioners will be at par with RBI.
This demand is pending for more than 7
years. During this long period many pensioners have left this world without
getting justice. The number of affected pensioners has come down significantly
in the intervening period. It is also a fact that some of Pre-2002 pensioners
whose Basic Pension is below particular level are already enjoying benefit of
100 percent dearness relief. In a nutshell, those being deprived of this
benefit is now limited and cost escalation due to this factor will be
negligible on overall pension cost.
We also enclose detailed note prepared
on uniform dearness allowance analysing all aspects of the issue for your
consideration.
WE
DEMAND HUNDERD PERCENT DEARNESS RELIEF TO PRE-NOVEMBER 2002 PENSIONERS WITH
EFFECT FROM 1ST FEBRUARY 2005 AS GIVEN UNDER 8TH WAGE
SETTLEMENT.
(2)
PENSION UPDATION OF PAST RETIREES
Pension Scheme in the banking industry
was introduced in 1995 with retrospective effect from 01.11.1993 covering those
employees who retired after 01.01.1986. In the last 28 years, basic pension of
the past retirees has not been revised despite the fact that basic pension of
future retirees was determined on improved basic pay under settlement after
settlement. This situation has created huge gap between basic pension of past
retirees and those retired in subsequent settlements.
All pensioners irrespective of date of retirement
draw their pension from the common Pension Fund under identical pension rules.
Therefore, in all fairness, proper alignment should be made in the basic
pension of past retirees while according benefit of higher pension to future
retirees under new settlement. This logic has been recognised by highest court
of this country and is being followed by Pay Commissions for government
pensioners. We understand that RBI is actively considering updation of basic
pension of its past retirees in alignment with future retirees and has already
done one such exercise earlier.
Cost factor and
overall pension cost need to be properly aligned and fine tuned between past
retirees and future retirees in this settlement. Under pension cost, passing on the benefit of higher allocation entirely
to future retirees is not acceptable to AIBRF. Proper formula based on equity
and social justice needs to be worked out through discussion and deliberation.
We also enclose detailed note prepared
on updation analysing all aspects of the subject for your consideration.
WE DEMAND PENSION UPDATION FOR ALL
PAST RETIREES BY MERGER OF DEARNESS RELIEF AT 4440 POINTS WITH EXISTING BASIC
PENSION AND GIVING INCREASE IN PER CENTAGE IN BASIC PENSION THEREAFTER ON THE
PRINCIPLES AND FORMULA ADOPTED UNDER 6TH PAY COMMISSION.
(3)
IMPROVEMENT IN FAMILY PENSION
Family pension applicable to bank
pensioners is very low compared to Family Pension Schemes applicable to
government and RBI pensioners.
WE
DEMAND FAMILY PENSION OF BANK PENSIONERS SHOULD BE BROUGHT AT PAR WITH
GOVERNMENT/RBI SCHEME AND THIS BENEFIT SHOULD BE EXTENDED TO ALL PAST FAMILY
PENSIONERS.
(4)
UNIFORM HOSPITALISATION SCHEME FOR RETIREES
Health management is the biggest
challenge for Senior Citizens and naturally, working class look for support
from their employers after retirement as social welfare measure. This is the
universal phenomenon and state policy in all Welfare States.
At present, as you know, there is no
uniform Hospitalisation Scheme for bank retirees. Only some banks are operating
some Hospitalisation Schemes for the benefit of retirees, being funded out of Staff
Welfare Funds and retirees’ contribution. It is seen that there is no
uniformity in these schemes, very inadequate benefits and an element of
uncertainty in its continuation when needed if adequate funds are not made
available from Staff Welfare Funds etc. Health management of Senior Citizens cannot
be dependent on such factors.
We understand that Hospitalisation Scheme
for employees on the model of Group Mediclaim Insurance Policy is being
considered in this settlement.
WE
DEMAND THAT UNIFORM HOSPITALISATION SCHEME FOR RETIREES SHOULD BE MADE
AVAILABLE ON THE SAME LINES AS BEING WORKED OUT FOR EMPLOYEES. WE WOULD LIKE TO
DISCUSS MODALITIES WITH YOU.
(5)
PENSION OPTION TO LEFT OVER PAST RETIREES
One more pension option was given to
all existing bank employees. However while extending pension option to past
retirees, certain sections of past retirees were left out from this option.
WE
DEMAND THAT ONE MORE PENSION OPTION SHOULD BE GIVEN TO LEFT OVER RETIREES ON
THE SAME TERMS AND CONDITIONS IN THE LAST SETTLEMENT DATED 27.04.2010.
(6)
PENSION ISSUES OF FOREIGN BANKS AND PRIVATE SECTOR BANKS’ RETIREES
In Foreign Banks such as Standard
Chartered Bank, Commutation of Pension is not restored even
after 15 years. Further there is no half-yearly change in dearness relief based
on the increasing Consumer Price Index.
Also, it is seen that the new
management of Merging Banks fail to honour the promises and commitments made by
the Merged Banks under the settlements after merger and acquisition.
We would like to discuss these issues
and also other related issues during the meeting.
COST FACTOR
As and
when improvement in the Pension Scheme is demanded by the retirees, one
standard and patent argument of “high cost” is advanced by IBA and the bank
managements. While we agree that each improvement involves additional cost, but
to brush aside the demand out rightly is not entirely based on facts and proper
analysis.
We have seen that Pension Fund of each
bank as well as at the industry level as a whole is showing healthy growth. We
find that interest income on the corpus is greater than all annual pension related
obligations being met even after lapse of 20 years since introduction of
pension, considerable increase in number of active pensioners after
introduction of VRS in the year 2000, large number of superannuation in last
2/3 years, high inflation, higher pension to new retirees and many banks not
meeting their commitment towards pension funds as per actuarial reports and AS-15
norms etc. We do not feel that there will be any big dip in the pension funds
if all the demands listed above are met. Another important angle which is not
examined critically from the cost point of view is the likely decrease in
number of active pensioners after a few years - because on one side, there will
be no new addition in membership and on the other side, decreasing number of pensioners
and family pension beneficiaries due to mortality factor. As per our estimation,
after expiry of next two decades Pension Funds will be left with huge funds
even after meeting all pension obligations. Therefore the argument of high cost
being advanced is one sided and needs to be seen in totality.
Then
another aspect that is to be taken into account while determining pension cost
is that Pension Scheme is basically a social security measure to provide
respectable and dignified life to the Senior Citizens. As such it should be
fixed, revised, modified and changed in ways not entirely dissimilar to the
salaries. Thus, pension hike is to be linked to rise in salaries.
We, therefore, humbly request you to
take the above aspects into consideration from the view point of cost angle,
before taking final decision on our demands for improvement in pensionary
benefits for the past retirees.
SHARING
OF DATA/INFORMATION
We are living in a regime of openness
and transparency. Common man today enjoys the legal right to information.
However, it is seen that IBA is most reluctant to share the information with an
important stake holder. In this context, we request you to share information about
pension cost and other related issues with the retirees to have a meaningful
dialogue.
STRUCTURED
MECHANISM
We also request you to evolve an apex
level consultative mechanism in due course. This, we believe, will be a useful
forum for holding consultation with the stakeholder i.e., the bank pensioners
through the AIBRF. It will provide us an opportunity for raising
concerns/problems bordering on policy matters affecting retirees directly with
you across the table. Further, this will facilitate valuable feed back to you
and pave way for maintaining a healthy tradition of constructive discussion on
matters pertaining to the retirees.
We once again request you to give us
early appointment for the meeting to discuss retirees’ issues outlined in the
memorandum.
Thanking you in anticipation and with
regards,
(S.C.JAIN)
GENERAL
SECRETARY
A. NOTE ON
UNIFORM DEARNESS RELIEF TO ALL
THE PAST RETIREES:
Dearness Allowance in the banking industry is
linked with the consumer price index and was calculated on basic pay/ basic
pension on tapered basis up to 7th settlement. The unions were demanding
uniform DA rate on the entire basic pay/ basic pension known as 100 percent DA
neutralisation for several years from one settlement after another. However the
success on this count could be achieved
almost after follow up and continuous efforts for more
than two decades in the eighth settlement. However the benefit of 100 percent DA neutralisation
was not extended to those who retired before effective date of 8th
settlement.
Past retirees who retired prior to November
2002 have been agitating and fighting on this issue at the organisational level
and legally for last more than 8 years as they consider it as the gross
injustice to them. This is the core issue for all the retiree organisations
operating in the banking industry.
We are of the firm view that this core issue
must be addressed and resolved in the 10th settlement to the
satisfaction of the affected retirees.
Therefore it is necessary to understand the
issue in its entirety. The following points are worth noting on this issue.
WHO ARE GETTING 100
PERCENT DEARNESS ALLOWANCE AT PRESENT
(1) All categories of employees who are in
service of the bank
(2) All Retirees who retired from the bank
service on or after 1st November 2002.
(3) All-Pre 1986 retirees on basic component
of ex-gratia
(4) All spouses of pre-1986 retirees on basic
component on ex-gratia (As per the recent guidelines of the government)
(5) Pensioners who retired between 01.01.1986
and 31.10.1992 and draw basic pension up to Rs. 1250/-
(6) Pensioners who retired between 01.11.92 and 31.03.1998 and
draw basic pension up to Rs. 2400/-
(7) Pensioners who retired between 01.04.1998
and 31.10.2002 and draw basic pension up to 3550/-
(8) Virtually all family pensioners.
As per the data available to us, this group
who receive 100% DA benefit constitute 80 percent of total pensioners in terms
of number and share 85 percent of total pension bill.
WHO DO NOT GET 100
PERCENT DA NETURLISATION
The following three categories of the
retirees at present do not get 100 percent dearness allowance
(1) Those who retired between 01.01.1986 and 31.10.1992
and draw basic pension more than 1250/-
(2) Those who retired between 01.11.1992 and 31.03.1998
and draw basic pension more than 2400/-
(3) Those who retired between 01.04.1998 and 31.10.2002
and draw basic pension more than 3550/-
This group constitutes 20 percent in terms of
number and 15 percent in terms of pension bill.
PENSIONERS NUMBER PENSION BILL
(1) Getting 100 percent DA 80
percent 85
percent
(2) Not getting 100 percent DA 20 percent 15
percent
HOW MUCH LESS THEY
GET
At 5211.91 index which has determined DA for
6 months from August 2013 to January 2014, the above categories of retirees get
the following amount of D.A.
(1) Those retired
between 01.01.1986 to 1.11.92 ( Slab 1152 )
Basic Pension DA at
present DA at
100 Difference Diff. per
Percent amount Slab
Rs. 1251 to 2000 14400 15436 1036 0.90
Rs.
2001 to 2130 14894 16440 1546 1.34
Rs.
2130 to 3000 16598 23155 6557 5.69
(2) Those retired
between 1.11.92 to 01.04.98 ( Slab 1015 )
Rs. 2401 to 3850 12794 13677 883 0.87
Rs. 3851 to 4100 13225 14565 1340 1.32
Rs. 4100 to 7000 15874 24867 8993 8.86
(3) Those retired
between 01.04.98 to 01.11.2002 ( Slab 881 )
Rs. 3551 to 5650 11206 11946 740 0.84
Rs. 5651 to 6010 11586 12707
1121 1.27
Rs. 6010 to 10500 14223 22201 7978 9.05
WHAT WILL BE
ADDITIONAL COST IN TERMS OF PERCENTAGE FOR GRANT OF 100 PERCENT DA TO PRE NOV 2002 RETIREES --
CERTAIN FACTS
(1) Those who retired between 1986 and 2002
are not getting 100 percent DA. These pensioners have completed minimum 11 years and maximum
27 years of retirement and belong to age group of 86 - 70 years.
(2) Number of pensioners belonging to this
group is now decreasing due to time factor and advancing age.
(3) After death of pensioner, either pension
is stopped or converted into family pension. In either case number of pensioner
not getting 100 percent DA gets reduced. This phenomena is on increase in last
a few years.
(4) Basic pension of this group is comparatively
almost 3 times lower than those retiring now and enjoying benefit of 100
percent DA. Therefore, financial burden for increase will be limited.
Based on the data given above, we below give
approximate additional cost for granting 100 percent DA to the leftover
pensioners.
LEFT OVER PENSIONERS 20 PERCENT OF TOTAL
INCREASE IN PENSION OF LEFT OVER
DUE TO GRANT OF 100 PERCENT DA 8 PERCENT APPROX
LEFT OVER CONSTITUTE OF TOTAL
PENSIONER IN TERMS OF NUMBER 20 PERCENT
PENSION BILL OF LEFT OVER
COMPARED TO TOTAL BILL 15 PERCENT
OVERALL ADDITIONAL BURDEN
ON TOTAL PENSION BILL FOR
GRANT OF 100 PERCENT DA TO
LEFT OVER ( 8*15/100) 1.2 PERCENT
NEXT 5 YEARS ADDTIONAL BURDEN
LIKELYTO COME DOWN DUE TO
MORTALITY FCTOR
BELOW 0.5 PERCENT
WHY DEMAND OF 100
PERCENT DA TO LEFT OVER IS JUSTIFIED
(1) Inflation affects adversely all retirees
at the same degree.
(2)
Discriminatory in nature.
(3) All Government Pensioners/ RBI pensioners
from where pension regulations were drawn,
have already received benefit of 100 percent DA from retrospective date.
(4) Clause 6 of the pension settlement
between unions and IBA specifically provide for grant of DA at the rates applicable to RBI pensioners.
Therefore the demand has legal backing too.
(5) According to unions too, the agreement
arrived in 8th settlement excluding pre- November 2002 retirees was
temporary arrangement to meet the cost
factor of the settlement and to introduce the concept of 100 percent DA in the
banking industry for which was fighting for 2 decades.
(6) All constituents of UFBU have included in
their charter of demands
(7) Additional financial cost to grant 100 percent DA to left over is limited.
OUR DEMAND ON THE
ISSUE
(1) 100 percent DA to ALL pre- November, 2002
retirees
(2) Arrears in this respect should be paid
from 01-02-2005
(3) This demand should be discussed on
priority basis as and when retiree issues/ superannuation benefit are taken up for
discussion during 10th settlement.
(4) AIBRF should be consulted and taken into
confidence before reaching any agreement on the issue.
(5) Any improvement brought in DA formula for
employees/ future pensioners in 10th settlement should be made
applicable to all the past retirees too without any discrimination.
(6)
Review of DA for pensioners should be on quarterly basis or at the
interval made applicable for the employees in this settlement.
B. NOTE
ON PENSION UPDATION TO PAST RETIREES:
WHAT IS PENSION
UPDATION?
There are three components in the pension
scheme applicable to bank retirees (a) Basic Pension (b) Dearness Allowance (c)
One- time payment of commutation on optional basis.
Updation exercise is related to component no
(a) i.e. BASIC PENSION. It is universal practice that while reviewing pay and
allowances of the employee the first and foremost exercise carried out is
RE-SETTING OF THE BASIC PAY according to
the movement of inflation in the intervening period , business growth of the
employer and general economic environment of the country.
The similar exercise need to be carried out
periodically in the case of pensioners too as pension is nothing but deferred
salary payable after the retirement. The basic pension need to be re-set in
tune with the increase given to the employees in the basic pay in the wage
settlement.
Government of India has been doing exercise
of updation of basic pension for its past retirees in each pay commission since
5th Pay Commission in view of the historical decision of the
constitutional bench of Supreme Court in the famous case of D.S.NAKARA Vs UNION
OF INDIA.
The another important point to be noted is
that whenever we talk of pension updation it necessarily relates to the past
retirees. As far as employees are concerned their basic pension gets
automatically updated with each wage settlement and with each increase on basic
pay.
Pension updation is nothing but to realign
the basic pension of the past retirees with the basic pension of future
retirees. It should not happen that two members of the pension funds holding
similar positions in the organisation
are discriminated in fixation of
the basic pension on the basis of their date of birth and date of retirement.
WHAT IS THE POSTION OF PENSION UPDATION IN
BANKING INDUSTRY AND FINANCIAL SECTOR ( HUGE BACK LOG )
Pension scheme under the provisions of
Pension Regulations 1995 was introduced in the banking industry with
retrospective effect of 1st January,1986.
As all of you know the exercise of pension updation has not been carried out for
last 28 years since 1986 despite the fact that it is quite long time period
, CPI representing inflation has
increased 10 times , salaries of the employees
have been revised 5 times, banks net profits have gone up 10 times
country’s GDP has gone up 8 times. Therefore there is a very strong case for updation
of pension for past retirees.
This situation has created huge backlog in
respect of pension updation for the past retirees in the banking industry as
can be seen from the following data
Retired Between CPI merged in Present CPI Difference
Basic Pension
1986 - 1992 601 5501 4900
1992 - 1998 1149 5501 4352
1998 - 2002 1684 5501 3817
2002 - 2007 2190 5501 3211
2007 - 2012 2664 5501 2957
After 2012 4400 5501 1101
This position can be further understood from
the following data
Category of Retiree
B. Pension B.
Pension Difference
Under 5th
BPS Under 9th BPS
Sub-staff 760 5500 4740
Clerk 1430 9150 7720
Officer MM I 2010 12850 10840
Officer MM II 2195 14050 11865
Officer MM III 2455 15750 13295
Officer SM IV 2675 18100 15425
Officer SM V 2975 20200 17226
Officer TM VI 3275 23400 20125
Officer TM VII 3500 26000 22500
It can be seen from the above statistics that
in last 28 years basic pension has gone up by 6 times and the gap will further
increase unless updation exercise is carried out for past retirees before
conclusion of 10th settlement.
WHY THIS SITUATION?
It becomes highly depressing and
frustrating for the past retirees to see
that while their basic pension remains stagnant without any review, basic
pension of future retirees get automatically updated with every wage revision.
They have been therefore agitating on this count and have been demanding
updation of basic pension in this settlement with clearance of backlog of all
the past settlement.
Let us analyse the reasons for this
situation. As all of you know that the pension option was exercised by only 40
percent employees originally in 1995 and majority of employees did not find the
pension scheme very attractive on the basis of their own analysis, inputs
received from certain quarters and some systematic propaganda carried out
against it. It took almost 15 years for the unions to correct this situation.
Up to 9th settlement the
priority for the unions was not updation exercise for the past retirees but to
ensure one more pension option for the leftovers. Therefore for delay in
updation exercise, to large extent, employees and retirees can blame
themselves.
However, there is qualitative change in the
position after one more pension option given to the leftover under 9th
settlement and today more than 98 percent retirees are pensioners.
PRESENT ENVIRONMENT
TOWARDS PENSION UPDATION
We are happy to mention that today the
overall environment towards pension updation for past retirees is favourable
and positive in view of the following facts
(1) More than 98 percent retirees are
pensioners and now agenda for all concerned is improvement in pension including
updation of pension.
(2) All retiree organisations as well as all
unions under the banner of UFBU have been demanding pension updation
(3) It is seen that it is being discussed
with all seriousness by IBA and UFBU .
(4) RBI Retirees’ Federation with full
support of the unions are agitating for
pension updation. We understand that RBI Governor, in the meeting with union
leaders has given assurance to carry out pension updation exercise in near future.
(5) LIC & GIC retirees are also demanding
pension updation in their organisations and are agitating for it. LIC comrades are fighting legal battle for pension updation.
(6) We have come to know from unconfirmed
sources that Labour Minister and Department of Personnel in Home Ministry have
prepared detailed note on pension
updation in financial sector to be placed before the new government.
(7) United Forum of Bank Unions ( UFBU ) have
been relentlessly taking up the matter at IBA/ Government level for solution in
the ensuing wage settlement.
(8) AIBRF has been continuously fighting for
solution of the issue and last organisational action in this regard was highly successful dharna programme at
Jantar Mantar Delhi on 7th March 2014
(8) Recently three major retiree
organisations which represent more than 85 percent of bank retirees including
AIBRF have come together on the issue of pension updation and on some other common demands and have issued
joint appeal.
CONSIDERING THE ABOVE, WE ARE QUITE OPTIMISTIC THAT ISSUE OF UPDATION WILL BE ADDRESSED IN THE FORTHCOMING
SETTLEMENT. HOWEVER, IT IS HIGHLY COMPLEXED MATTER AND NEED TO WORK FOR THE
SOLUTION WHICH SATISFY ALL CATEGORIES OF RETIREES.
OUR DEMANDS ON
PENSION UPDATION
Our demands in this regard are as under
(1) Dearness Allowance should be merged at
CPI 4440 as being done for employees
under 10th wage settlement for all categories of past retirees.
(2) Date
of effect for updation should be 1st November, 2012, the date agreed
for extending benefit to employees under 10th wage settlement.
(3) While constructing new basic pension
after merger of DA at CPI 4440, formula given under 6th pay
commission for updation should be applied.
(4) Concept
of higher basic pension to the super senior citizen as given to government
retirees under 6th pay commission should be introduced for bank
retirees under 10th wage settlement.
(5) Basic pension should be restored after
12 years instead of present 15 years for commutation.
(6) Pension Regulations should be suitably
amended to make specific provisions for pension updation for past retirees at
the time of each wage settlement as originally envisaged in the settlement signed for introducing pension scheme in the banking
industry.
(7) The matter should be discussed with AIBRF
and other retiree organisations and they
should be taken into confidence before finalising the settlement.
THE ABOVE DEMANDS ARE REALISTIC AND
REASONABLE. WHAT WE ARE DEMANDING THERE IS NOTHING NEW IN IT. THESE BENEFITS
ARE ALREADY BEING EXTENDED TO THE
RETIREES IN THE GOVERNMENT SECTOR FROM THE YEAR 2006.
COST FACTOR
The biggest argument coming against pension
updation is paucity of funds. Therefore it is necessary to examine the issue
from this angle. We would like to place some facts in this regard as under:
(1) We have examined data of pension funds of
previous years in respect of some banks
received under RTI. It is observed that there is no undue strain on the balance
sheets of pension funds during last 15 years despite the fact that dearness
allowance has increased by almost 800 percent during this period, one more
pension option given to almost 4 lakhs employees/ retirees in 2010 and high
increase in commutation amount for new retirees due to inflation factor.
(2) we below give data of pension fund of one
bank collected under RTI in support of our contention given above.
(a) Growth
in pension fund- From 174.36 crores in 1996-1997 crores to 8767 crores at the
end of March 2014. It has increased by about 5000 percent in last 19 years after meeting all pension liability.
The major growth in this fund is mainly due to the interest income and
statutory contribution received in lieu of provident fund.
(b) The receipts and payment position of Pension Fund in this bank during last 5 years
are as under
(Amount
in crores)
Year Receipts Payments Surplus
( Int. + Contribution) ( Pension+Commutation)
2008-09
110.46 36.59 73.87
2009-10 93.79 41.84 51.95
2010-11 455.59 100.03 355.56
2011-12 863.80 168.05 695.75
2012-13 944.98 194.41 750.57
(3) Position of pension funds in other banks too is more or
less on similar lines and they have shown healthy growth in last 28 years.
(4) We are of the view that present
accounting system of funding pension liability need to be re-looked and it
should be made simple and on the lines of government pension funding. Today,
total corpus under pension fund in the banking industry is about Rs.1.10 lakhs
crores. Legally speaking, this money does not belong to the members of pension
fund. But these are basically provisions made by banks for meeting future
pension liability in smooth and in uninterrupted manner. Imagine, in case this
amount of Rs. 1.10 lakhs crores is transferred to the capital account of banks
and pension liability is met out of profit and loss accounts on the lines of
employee cost, it can change whole balance sheets of banks and improve their
capital adequacy ratio and Indian banks may be re-rated. It can become win-win
situation for all concerned, though it will need lot of changes in the present
legal provisions.
On the basis of above analysis, we can say
that fund position should not become constraint in the way of carrying out long
pending pension updation exercise. Further, the retirees have legitimate claim for
sharing profits and additional funds, if required for this purpose, should come
from growing profits of banks.
