GOI's view & our Comments:
View:
2016Details:Pension to retirees and family pension to dependents of deceased employees are being paid in terms of Bank Employee...s’ Pension Regulations 1995.
View:
2016Details:Pension to retirees and family pension to dependents of deceased employees are being paid in terms of Bank Employee...s’ Pension Regulations 1995.
Comment:
The Statement of Objects and Reasons with which the pension scheme,1995 was brought in lieu of CPF in Nationalized Banks broadly relies upon the Government's Liberalized Pension Scheme (01 01 1986) as was followed in the Pension Scheme,1990 introduced in RBI only. Hence Draft Pension Regulations dt.01 11 1993 brought in line with the Pension Settlement dt.29.10.1993 could not be adopted in its entirety while notifying the said Pension Scheme, 1995 in the Official Gazette on 29 09 1995 and implementing the said Scheme w.e.f 01 11 1993.
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View:
There are no provisions in Bank Employees' Pension Regulations, 1995 for periodic updation of these benefits as and when the salary revision for employees takes place.
The Statement of Objects and Reasons with which the pension scheme,1995 was brought in lieu of CPF in Nationalized Banks broadly relies upon the Government's Liberalized Pension Scheme (01 01 1986) as was followed in the Pension Scheme,1990 introduced in RBI only. Hence Draft Pension Regulations dt.01 11 1993 brought in line with the Pension Settlement dt.29.10.1993 could not be adopted in its entirety while notifying the said Pension Scheme, 1995 in the Official Gazette on 29 09 1995 and implementing the said Scheme w.e.f 01 11 1993.
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View:
There are no provisions in Bank Employees' Pension Regulations, 1995 for periodic updation of these benefits as and when the salary revision for employees takes place.
Comment:
RATE OF PENSION
Regularion 35.Amount of Pension:-
(1) Basic pension and additional pension, wherever applicable, shall be updated as per the formulae given in Appendix I.
RATE OF PENSION
Regularion 35.Amount of Pension:-
(1) Basic pension and additional pension, wherever applicable, shall be updated as per the formulae given in Appendix I.
RESIDUARY PROVISIONS:-
Regulation 56. "In case of doubt, 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 Centeal Government employees with such exceptions and modifications as the Bank, with the previous sanction of the Central Government, may from time to time, determine."
Regulation 56. "In case of doubt, 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 Centeal Government employees with such exceptions and modifications as the Bank, with the previous sanction of the Central Government, may from time to time, determine."
It is imperative that as and when pay
scales get revised in CCS, pension gets periodically revised simultaneously.
PS BANKS must have regard to the same
procedure as in CCS Pension Rules /procedures as approved by GOI from time to
time and adopt due formulae for updation through a simultaneous upgradation of
the provisions under Appendix I as and when the periodic wage revision takes
place .
There exists a fundamental objective to
update pension wherever applicable as is evident from the provisions of
Regulation 35(1) read with Appendix I.
There is no statutory provision either
for MOF or the Board of PSBank to deny this basic provision for updation with
due invocation of the provisions under Regulation 56 in order to meet the
Objectives and the Reasons with which Pension Scheme,1995 was introduced in
banks in lieu of CPF only.
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View:
Bank pension scheme is funded scheme and additional liabilities if any, towards pension is to be allocated from the profit of the Bank based on the actuarial valuations done on yearly basis.
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View:
Bank pension scheme is funded scheme and additional liabilities if any, towards pension is to be allocated from the profit of the Bank based on the actuarial valuations done on yearly basis.
Comment:
Section 10 of THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1970 ACT NO.5 OF 1970 :
Closure of accounts and disposal of profits.
(7)"After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies, a corresponding new bank shall transfer the balance of profits to the Central Government."
Section 10 of THE BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1970 ACT NO.5 OF 1970 :
Closure of accounts and disposal of profits.
(7)"After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies, a corresponding new bank shall transfer the balance of profits to the Central Government."
Regulation 11
11.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 additiinal annual contributions to the Fund as may be required to secure payment of the benefits under these regulations."
View was clear. No comment.
11.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 additiinal annual contributions to the Fund as may be required to secure payment of the benefits under these regulations."
View was clear. No comment.
View:
Hence, any improvement in the Scheme on the lines of Government Pension, cost of this exercise has to be worked out in the Scheme before suggesting any improvement.
Hence, any improvement in the Scheme on the lines of Government Pension, cost of this exercise has to be worked out in the Scheme before suggesting any improvement.
Comment : Suggestion must be preceded
by cost evaluation.That is expected of getting done by the Actuary as and when
improvement takes place in wage structure periodically(5years ).IBA had already
informed CLC(C)Mumbai that it will come before it with the cost implications
soon.Now that Balance Sheets got published already, it is time for IBA to
report compliances of its commitment before the CLC(C).
View:
In this regard, IBA is in the process of collecting data from banks to work out cost implications.
In this regard, IBA is in the process of collecting data from banks to work out cost implications.
COMMENT:
IBA had already come out with Balance Sheets of 31 03 2016 of its member banks. ACTUARIES must have worked out the cost implications before the publication of these Balance Sheets for 2016.
IBA had already come out with Balance Sheets of 31 03 2016 of its member banks. ACTUARIES must have worked out the cost implications before the publication of these Balance Sheets for 2016.
View:
Moreover, unlike a funded scheme of Banks, the scheme for pension to retired Government employees works on a totally different principle. The pensionary liability of the Government towards the retired Government employees is treated as revenue expenditure and gets the necessary budgetary allocation and, therefore, is not dependent on the extent of the pension funds.
Moreover, unlike a funded scheme of Banks, the scheme for pension to retired Government employees works on a totally different principle. The pensionary liability of the Government towards the retired Government employees is treated as revenue expenditure and gets the necessary budgetary allocation and, therefore, is not dependent on the extent of the pension funds.
Comment:
In Banks it is not treated as capital expenditure.It is only a provision for revenue expenditure on account of payment of deferred wage being made based purely on the provisions under CHAPTER. III of Regulations including the annual investigation being caused by the Actuary.
In Banks it is not treated as capital expenditure.It is only a provision for revenue expenditure on account of payment of deferred wage being made based purely on the provisions under CHAPTER. III of Regulations including the annual investigation being caused by the Actuary.
View:
The payment of pension is a statutory liability undertaken by the Government and whatever becomes due and payable is budgeted for.
The payment of pension is a statutory liability undertaken by the Government and whatever becomes due and payable is budgeted for.
Comment: Payment of pension is a
statutory liability undertaken by the Banks and whatever becomes due and
payable is provided for as per the provisions under Section 10(7) of the said
Act 5 of 1970/1980 and CHAPTER III of Pension Regulations ,29 09 1995.
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Hope this woud suffice to clarify the position on pension updation in banks with out any ambuguity whatsoever.
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Hope this woud suffice to clarify the position on pension updation in banks with out any ambuguity whatsoever.
With regards.
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