Practical suggestion for discussions

amongst bank retirees and retirees’

1
 organizations for ending stalemate
on updation of pension
Dear Nationalized Bank Retiree Comrades,

Everybody knows Equality is among the main Fundamental Rights.   All the
retirees organizations have been taking up this issue strongly from time to time
to create awareness among the pensioners and exert pressure on unions, IBA,
GoI and Courts for granting the senior bankers the right to equality.   It appears
the politicians and CMDs / EDs (who are part of IBA) of the Banks have no
concern for senior citizens and try to squeeze them by denying them them their
right to have a decent pension.   On the other hand, Central Government, where
we have top bureaucrats are able to manipulate rules so that they get decent
pensions and time to time revisions also. There has been no updation in pension
for PSB employees since 1996, we have been putting up these demands for a
pension update as a part of their bipartite wage negotiations with the Indian
Banks' Association (IBA), but it has always been rejected. The IBA, which is an
association of Indian banks and financial institutions, has assessed the pension
updation cost in PSBs at Rs 95,000 crore. It has said that the banks, which have
been reeling under rising bad loans/Non-Performing Assets (NPAs), would not
be able to take this load on them.
The basic fact is that pension scheme in PSBs is exactly the same as the RBI
pension scheme, with similar rules and regulations. The government had refused
to give in to the RBI employees' demand and had said that it would have a
contingent effect, which would lead to similar demands from other public sector
banks. According to the report, the financial burden of updating pension in the
RBI is Rs 858 crore while the apex bank's pension corpus is around Rs 12,000
crore. Furthermore, the RBI pensioners are now entitled to receive a notional
rise of 10% in their salaries plus dearness allowance with each of the three wage
revisions in 2002, 2007 and 2012.
This would thus result in a total increase in basic pension by a factor of 3.63 for
pensioners who retired before November 2002. Whereas the pension corpus of
public sector banks stood at around Rs 17, 1418 crore, which is 14.28 times of
the RBI's pension corpus. This issue has been exploited by IBA and GoI for
long and unions have utterly failed to convince any one of them that all bank
pensioners  needs to be covered by 100% DA Neutralization
It is amusing to note that IBA often cites monetary burden and cost implications
inNegotiations whereas the fact is that the present plight of the Banks is mainly
due to big Corporate NPAs and certainly not due to lack of efficiency of the
work-force of the Banks. In fact, every Bank is making huge Operating Profits

2
which is the real yard stick of the efficacy and efficiency of Bank Employees
and Officers.
As far as Bank Pensioners and Retirees issues are concerned all the Banks have
sufficient funds in their Pension Fund and invariably the Auditors and Actuaries
have also in the Balance Sheets of the Banks year after year certified that
enough provisions have been made to the Pension Fund as per the provisions
of Bank Employees Pension Regulations to enable the Banks to meet their
Pension obligations. Some of the Banks have even transferred the amounts
from Pension Fund to their Profit and Loss Account on the ground of having
made excess provision to Pension Fund.

Even in the recently concluded 11 bipartite we find this unhealthy bar the gain
trend, against the ethos of true biapartism.w.r.t to our updation pension demand
While the unions have reduced their demand from expected 25%,to15% the
stalemate continues regarding our justifiable demand of pension updation .the
silver ling of the settlement with which , for Bank Pensioners and Retirees is
the information given to negotiating unions team by the Chairman of IBA that
Improvement in Family Pension at 30 % without any capping on the lines of
Government India Employees Family Pension is agreed to. This is one very
important issue raised by Retirees Organisations which was eluding resolution
in spite of repeated assurances. This was also mentioned in the Record note
during the last settlement explaining the same as an emotional issue concerning
vast number ( around 72000) of Women Spouses of Deceased Pensioners. We
profusely thank unions Leadership and IBA and the Ministry of Finance for
acceding to our request.
But stalemate other Major issues like Updation of Pension, Medical Insurance
Scheme, 100% DA NEUTRALIZATION to Pre November 2002,Retirees,
Special Allowance component and Grievances continues.
The history of collective bargaining also highlights that the management as well
as the unions have always operated with a win lose strategy and both the parties
have attempted to BAR the GAIN (rather than bargain) of each other.

I am not merely pro or anti establishment. On the contrary I know that I am a

vital section of this establishment ourselves and unlike most other sections of
the establishment I want to develop and drive a self critical and critical
viewpoint with view of generating thinking , enquiring minds, enhance
awareness and learning. In this process we learn, unlearn and relearn. It is
with this sole Appreciating the Determination with which retires organisations
at apex levels e have been following up the issues despite earlier setbacks with
view of finding resolving our issues, I am giving below the practical suggestion
for the discussion amongst the bank pensioners and pensioner organisations

3
. Assumption of the following facts

1.   Mass recruitment in Banks started from the year 1969, before which number
of staff was very less in Banks.

2.   Mass Recruitment was stopped from the year 1982.

3.   Again Recruitment started from the year 2010.

4.   Staff joined on or after the year 2010 is covered under separate Pension
Scheme, namely NPS.

5.   Pension Fund is a closed Fund after the year 2010, which means that there
are/will not be any new entrant after the year 2010.

6.   Pension fund balance as on 31.03.2018 was Rs.240 lakhs crores.

7.   In the year 2017-18, interest earned on the Pension Fund was Rs.18,400
crores, i.e. average rate of interest is 8%.

8.   In the year 2017-18, Pension of Rs.14,800 crores was disbursed.

Assumptions based past facts:-

1.   Pension Disbursement will increase by average compound rate of 5% every

year due to DA increase.

2.   Pension fund will earn same rate of interest i.e. 8% p.a., henceforth.

3.   The average life of present pensioners is further 15 years from the year
2018, i.e upto the year 2033.

4.   The surplus funds available from the balance of pensioners died before the
year 2033, will be available for disbursement of pension to the pensioners
surviving after the year 2033.

Thus, the contention of IBA that Pension funds are not sufficient for up-
gradation, is not correct. On the contrary, Banks would not be required to
contribute anything in present as well as in subsequent BPS for upgradation of
Pension. If the Banks contribute something, more liberal upgradation may be
possible.

4
Suggestion:
Formulae for clerical scales

S.n Categories of Wage Date of Amount D.A Scale of

o pensioners revision settlemen to be formula pay
before the subsequent t reckoned e
effective date introduction for
of wage of pension pension
revision in regulations from the
column 3 1993-95 effective
date of
settlement
1 Pre 1986 6th 1.11.1992 60% of 0.35% 1750-
retirees Bipartite family OF PAY 5500
settlement pension as
per 6th
Bipartite
settlement
2 1986 to 1992 6th 1.11.1992 90% of 0.35% 1750-
Bipartite eligible OF PAY 5500
settlement pension as
per 6th
Bipartite
settlement
3 1992 to 1997 7th 1.11.1997 90% of 0.24 % 3020-
Bipartite eligible OF PAY 8980
settlement pension as
per 7th
Bipartite
settlement
4 1997 to 2002 8th 1.11.2002 90% of 0.18 % 4410-
Bipartite eligible OF PAY 13210
settlement pension as
per 8h
Bipartite
settlement
5 2002 to 2007 9 th 1.11.2007 90% of 0.15% 6200-
Bipartite eligible OF PAY 18300
settlement pension as
per 9th
Bipartite
settlement
6 2007 to 2012 10 th 1.11.2012 90% of 0.10% 11765-
5
 Bipartite eligible OF PAY 42020
settlement pension as
per 10h
Bipartite
settlement
7 2012 to 2017 11 th 1-11- 90% of As As
Bipartite 2017 eligible arrived arrived
settlement pension as at at
per 11h
Bipartite
settlement
8 2017onwrds 11 th 100 % of As As
Bipartite eligible arrived arrived
settlement pension as at at
per 11h
Bipartite
settlement

Note:

1 Similar formulae can be worked out for officer scales and subordinate
staff scales

2. as per Cl.11 of Regulations. Which reads as under:

11.Acturial 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 additional annual contribution to the
Fund as may be required to secure payment of the benefits under
these regulations. Banks can refer to this formulae to a team of an
Actuaries for its feasibility and implementation

3) The % suggested by me can be further negotiated thereafter

Love
S.Srinivasan
Former General Secretary of The Recognised Union in IOB for aroudn25 Years.

6
7