Why Demand of Updating Pension Of PSBs Is Justified?

Updating of Pension of PSBs Pensioners


If RBI pension is revised/updated why not the same in PSBs? PSBs Pension Scheme is ultimately based on RBI Scheme!

Primarily, having reached to updating settlement with Unions, the Governor of RBI requested the Ministry of Finance vide its letter dated 6the Oct., 2017  for Updating of Pension to RBI Pensioners. The request was declined vide Ministry communique dated 26.2.2018, on premises of contingent effect, which the govt presumed that it would result in
similar demands in Public Sector Banks, most of which were/are running in
financial difficulties.

The govt had since consented to RBI pension updating w.e.f. 1-3-2019, at pay revision level of 31.10.2012, now the deck is cleared for PSBs pension updating.

The noting by officers of DFS, at Page Number 263 to 265 of File No 11/5/2001- IR, are of dates
from 31.1.2018 to 22.2.2018, that needs to be perused.

Page Number 264, para (ii) says, “At present Pension Corpus is around Rs.12000 Crores”, para (v) says, “RBI has informed the financial cost of updating in RBI is 857.52 crores.

In contingent effect, IBA has informed,  updating pension in PSBs could cost Rs.95000 Crores, which PSBs wont be in a position to bear with. Prima facie, it looks exaggerated, beyond rationale. Thus, it needs some introspection.

1.RBI & PSBs have similar Pension Regulations-1995. Date of effect is same as 1.1.1986. Pay Revision blocks are same. We can conclude: updating cost of PSBs Pensioners same at CPI 4440 level.

2. RBI Pension Fund was stated to be Rs.12000 crores. Updating cost was estimated to be as Rs.857.52 crores. Now percentage wise it works out
as= 857.52÷12000×100= 7.146% of RBI Pension Fund corpus.

3. Let us examine the Rs.95000 crores cost calculation of IBA. Pension Funds corpus of 26 PSBs was Rs 164647.01 as on 31.3.17. Now, minus SBI subsidies      ( from 1.4.17) let us take mid of  2017-2018, as Sept-2017. Sept.2017, Pension Funds may be taken as Rs.171417.91 crores. On this basis the cost percentage of IBA works out as: 95000÷171417.90×100= 55.42% of corpus of PSBs.

4. Now, let us analyze the PF of PSBs viz a viz RBI. PSBs' Sept-2017 PF was Rs.171417.91 cr. as against of 12000 cr. of RBI. PSBs' PF corpus works out to be 14.28 times of RBI corpus, (171417.91÷12000). Further, PSBs corpus works out to be 111.39% of needed corpus as per calculations.

5. With all similarity, as stated in point 1, supra, there is another point that RBI scales are bit superior to PSBs, thus pension out go is equally more per capita.

Thus, it's abundantly clear that IBA figure of Rs.95000 crore as updating cost is not only exorbitant, but it's concocted, fabricated and aimed at to deceive, thus a sort of mischief and bundle of lies. It's sole purpose is to defeat and deny updating demand by quoting such exorbitant updating cost figure to government, though baseless. If at all, Unions succeed in bringing up updating demand in discussion, IBA will use it as a tool and shall try to exploit the situation to negate updating in the name of unaffordable cost. In case some favorable situation crops up for updating, IBA may try to snatch big share from load amount on this ground.

Billion dollar question is: how negotiating Unions make IBA sit, discuss and settle pension/family pension updating issue, particularly in a complex situation where IBA says, (i) it has no mandate for pension updating, (ii) it negotiates only on mandated issues, (iii) there is no contractual relationship between pensioners with their respective banks, and (iv) updating cost is whooping etc.

IBA's tough stand is stupenduously clear in officers' mandate matter. IBA didn't budge any bit despite two days strike by officers and massive dharana at the call of AIBOC. The little concession offered to negotiate upto scale v, had been withdrawn by IBA, making matter straight and simple that it would go ahead with workmen Unions to clinch the 11th wage settlement and whatever parameters are applied to workmen, on same IBA would settle officers wages & service conditions.

Well, reading the writing on wall, perhaps, great worriers of 21st century with other two had met in recent past at Bengaluru to take the stock of their armoury. Workmen Unions have, since decided to go solo and hold negotiations! The joint communique to IBA by 4 Officers Unions from Bengaluru is a sort of knee walk endeavor to parley.

Legitimately, we can call it resurrection. In trade union history, never before, such mishap had happened. AIBOC used 1000kg bomb first by resorting to two days strike, followed with crackers show by holding a dharana at Delhi, met Pappuji, a fired cartage & nobody in the art of scheme, and now  to IBA with white flag in hand.

Well, according to Pension Scheme, existing pensioners have had made their contributions and those who are still in service they are doing it irrevocably, in compliance of quid-pro-quo deal. As envisaged in Regulations, 1995, to maintain the adequacy of Pension Funds is the task of Bankers. Accordingly, there is provision in Regulations, 1995, to carry out Acturial exercise every year on 31st March and make good the short fall, if any, by making additional contributions. It's mandatory and obligatory in terms of Pension Agreement, 1993 & Pension Regulations, 1995. Bankers trick has been to escape from additional contributions, by witholding legitimate right of updated pension.

Informed sources say, Pension Funds are at around Rs.2.49 lakh crores in March, 2019. It is stated to be over 111% of required funding. If it is so, bankers need not to make any additional contributions. Even if it is not and they have to make some contributions, they must do it, as by witholding updating for such long years, enormous savings they have had made, of course at the cost of poor pensioners.

Terms and extents of pension updating are settled in RBI Pension updating decision. PSBs pension scheme warrants same touch. Negotiating Unions have to firm up themselves on this issue.

Negotiating Unions must introspect the Mediclaim Insurance Policy, as increased premiums in last three years have had pushed pensioners out of health cover due to unaffordable premium. More than 60% pensioners are dropped out of scheme. This poses serious insecurity to majority of pensioners' fraternity. Unions-IBA must review it. IBA/ Bankers must agree to minimum health cover free of cost as welfare measure. Whatever cost Bankers incur, they bear the same out of Welfare Funds, to which pensioners are equally entitled. Pensioners may bear the cost above the free cover. To tide over claim ratio, Bankers must take common policy for in-service personnel and retirees. Cashless system breeds corruption that push high claim ratio. It needs to be reviewed and some alternate mechanism should be found out to control the situation. It was earlier in many banks and still possible, if UFBU-IBA seriously think in this regard. Existing cashless facility at listed hospitals, TPA is just an enabling mechanism to loot. IBA must respond to situation sincerely to mitigate health insecurity of pensioners.

- J. N. Shukla,
PRAYAGRAJ, 3.7.2019
9559748844/ jagat.n.shukla@gmail.com

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