Demand For Consolidated Pension Fund

                                                                                                                          Ref:2018/77                                                  Date :30.07.2018





    The office Bearers/ Central Committee Members/ State Body Chiefs
    A.I.B.R.F.


    Dear Comrades
                Re: Demand for constitution of Consolidated Pension Fund
                      For public sector banks.

During our discussion/ interaction with IBA officials, DFS officials and other government authorities, one point emerges prominently is that due to fund constrain and present poor performance of banks, it is not possible to consider retires demand of improvement in family pension, pension Updation etc. though they accept unofficially  that demands raised are genuine, reasonable and overdue. They also point out that pension scheme in banking industry  is fund based scheme and demands related to pension can be considered subject to availability of adequate funds.

2. We find that presently combined balances available in these pension funds are to the tune of about Rs. 1.58 lakh crores. By any standard, it is quite huge amount. It is being felt that despite availability of such huge funds, retirees’ demand remain pending and unconsidered. One reason is that these funds are not at one place and not under control of one authority. They are scattered laying in pension fund accounts of 20 and odd public sector banks.

3. This situation puts retirees in to disadvantageous position in the following manner:
(a) Scattered funds do not reflect real strength and power it actually has.
(b) They are presently  controlled by several bank managements who are also  responsible to  implement various provisions of pension regulations for guaranteed  payments. This provides enough scope for bank management to carry out several adjustments like not providing enough allocations to these funds as per the commitment and statutory requirement, investment of funds as per their priority affecting yield adversely and use them as per the corporate requirement to project profitability etc.

(c) All pension related demands are linked to allocation of funds for wage negotiation of employees.

4. In view of this in order to get better deal in pension improvement, better and true strength power of pension fund in



banking industry, AIBRF and other retiree organisations should demand and work for constituting Consolidated Pension Fund under independent and professional fund manager with statutory power. This consolidated pension funds will be with corpus of nearly 1.58 lakhs crores and will probably be  the largest one in the country.

It will have the following advantages for retirees:

(a) It will improve yield considerably with better investment by professional fund managers.
(b) It will be completely free from influence and pressure of bank managements who have used them for their priority as happened last time in PNB.
(c) Statutory liability  of banks towards pension funds as provided under pension regulations/ other laws will be calculated  and demanded by the independent authority from bank managements. It will certainly improve fund corpus and thereby yield.
(d) It is seen that Actuary Report/ Due diligence being carried by bank managements on annual basis as per requirement of pension regulations get influenced due to conflict of interest affecting bank pensioners adversely presently. Such incidents can be completely eliminated with constitution of consolidated fund.
(e) All pension related demands can be considered independently.

If this becomes reality, it will be revolutionary step and the biggest reform in the pension history of India. We propose to draft and submit comprehensive memorandum to the authorities to secure support of political class, bureaucrats, unions, bank managements, IBA , and experts/ professionals. We know it is difficult and long drawn task. But if want to secure interest of pensioners in the fast changing economic environment, we have no option but to work for it. We propose to discuss this issue in the forthcoming  Central Committee Meeting to take some definite view on it. In the meantime, we invite suggestions from you on the subject  to prepare Discussion Paper for the meeting.
Mr. J.V. Ratnam Central Committee Member and President of Andhra Pradesh State Committee has offered his services to collect required data/ information to draft discussion paper.   
           
              With Warm Greetings,

 
                                                                         Yours Sincerely,
                                                         
                                                                 


                                                                       ( S.C.JAIN)
                                                                GENERAL SECRETARY




AIBRF has mooted an idea to demand 'Consolidation of Pension Fund' of all Banks, instead doing anything tangible to the issues of Pensioners. People are yet to know the motive and brain behind it or the report they obtained from any Consultancy. We don't know, any working Union toying with such 👌nonsense idea. When AIBEA was in thick & thin with Pension Demand, it had no such idea as of the sort. Simply it wanted Pension Policy. Pension Fund creation was an idea of Bankers, like the one  they were managing CPF & Gratuity liabilities through Trust. However, the Pension Funds are well managed by respective Banks.

Now, when the Pension revision demand is made Bankers show paucity of Funding as a reason. In case, from beginning, Payment of Pension was made the revenue expenditure of Banks, instead Pension Fund, and clubbed with wage revision & improvement in service conditions, so far Pension would have had undergone several times revisions as wages & other service conditions.

AIBRF gone bankrupt. Despite such long inning, they couldn't address any issue of Pensioners. Now in their utter failures & frustrations, the gentleman at the helm of affairs is mooting an idea of nonsense. It's just attention diverting exercise. All banks have different size of human resources and liabilities thereof.

Instead, the idea should have come to fore under which revision & updating of Pension from the  Pension Fund should have been suggested and then for future Pension Payment is made a subject matter of Revenue Expenditure, as salaries & allowances, agreed to be revised along with salaries & allowances periodically. Remains of Pension Funds, the Banks may manage it in the manner they like, which they are doing even today. This change may benefit Pensioners & Banks as well and resolve Pension Revision Demand brewing for last over two and a half decades and in future no such problem or suffering may surface to Pensioners.

(J. N. Shukla/Allahabad/9559748734) 7.8.18