No doubt there is a case for upward revision of pension to pensioners with every wage revision.But in the present scheme of funding, definitely the amount of existing Pension Fund is actuarially not adequate to meet the additional liability arising out of the contingency of pension upgradation .The pension revision with every wage revision will entail increased additional contribution in respect of past liability in the event of retrospective effect to the upward revision of wage revision besides the additional contribution required meeting the future increased upgraded pension liability.Of course the additional contributions in respect of serving employees will be the higher component besides the benefit that they enjoy at the time of every wage revision.The RBI type of upgradation does not make sense when looked at from the yardstick of equity as prospective upgradation betrays the interest of the deceased pensioners besides depriving surviving old pensioners of a huge quantum of arrears that will be due to the pensioners if given with retrospective effect.
The public sector Bank pensioners' statistics reveal that the number of retirees far exceeds the pension optees in service. As at 31/3/2022, there were 779021 employees in service in all Public Sector Banks.Out of them there were only 153901 pension optees in service ( excluding SBI,Bank of Baroda and Indian Bank for whom figures were not available.Thus taking the base of total number of 414850 of employees excluding the three Banks,the percentage of pension optees in service constituted only about of 37% of the total serving employees as at 31/3/2022.This percentage will go on declining every year with retirements of pension optees.This is quite different from the situation in LIC where as at 31/3/2023 there were 73585 pension optees in service compared to about 98000 employees on roll.
The burden the Banks will have to bear due to additional contributions will cut into their profits which are already under strain due to NPAs affecting shareholder returns.But the total provisions for additional liability can be amortized over five years .Of course the adverse financial impact will be offset over a period of time considering that the group of pension fund beneficiaries will is a diminishing one.
LIC is in a much better position with lesser number of pensioners and pension optees in service.As at 31/3/2023 there were 74589 pensioners against 73585 pension optees in service.It is certain that by 31/3/2024 ,the gap would have widened by about 5000 with number of pensioners far exceeding pension optees in service.
Ex gratia payment is definitely no substitute for equitable relief by way of upgradation of pension. The RBI type of upgradation will benefit only serving employees and post July 2012- pre-August 2017 retirees besides latest generation of retirees in the event of future wage revisions.
Only judiciary can provide us equitable justice.
C H Mahadevan
No comments:
Post a Comment