Bank Retirees Pension revision

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 Bank Retirees  

      Pension revision 

Bank Retirees’ pension can be categorised under four different schemes.

1)State Bank staff Pension scheme

2)Associate Banks of SBI pension scheme 

3)Nationalised banks staff pension scheme

4)NPS for Bank staff joined from 1.4.2010

1)State bank of india had extended the staff pension scheme right from its inception. The pension scheme in ‘Imperial Bank of India’ has continued even after its conversion in 1955 as ‘State Bank of India’. Pension rules and PF regulations in SBI has clauses for updation of pension after wage revision. In SBI, pension is based on 50% of average basic drawn just anterior to retirement. It is 50% for award staff and upto maximum basic of JMG I there after officers' pension is reduced to 40% with a minimum benchmark. Maximum pension Ceiling was also imposed. PSBs came on pension scene from 7th BPS and the pension in SBI is being targeted since then. Then pension of 40% last drawn pay introduced to take away the third retiral benefit (50%-40%=10% in basic pay+DA there on after retirement as a recovery in lieu of 10% paid by Bank for PF during in service). The pension scheme applicable to staff who joined SBI upto 31.3.2010. *More details of SBI see at the end.

2)In Associate Banks of SBI, there was no staff pension scheme upto the year 1993. it was agreed in 1993, with retrospective effect from 1.1.1986 and rules applicable under Bank Employees’ Pension Regulation 1995. Bank employees and officers had joined in the scheme after surrendering their Banks contribution to Provident fund as Pension fund corpus. It is in line with  the RBI pension scheme. In general, the pension is based on 50% of average basic drawn just anterior to retirement. State Bank of Saurashtra merged with SBI in 2008. State bank of Indore merged with SBI in 2010. Five Associate Banks besides Bharatiya Mahila Bank (BMB), merged with SBI  in 2017. Then onwards, SBI pension rules applies to staff of these banks as they become staff of SBI. The pension scheme applicable to staff who joined in these Banks upto 31.3.2010.

who join from 1st April 2010 will be covered under contributory pension scheme (NPS).

3)In all public sector banks, Before 1972 the PSBs had two retiral benefits had Service Gratuity and CPF but did not have pension scheme. there was no staff pension scheme upto the year 1993. After a decade long struggle it was agreed in 1993, with retrospective effect from 1.1.1986 and rules applicable under Bank Employees’ Pension Regulation 1995. Bank employees and officers had joined in the scheme after surrendering their Bank’s contribution to Provident fund as Pension fund corpus. It is in line with  the RBI pension scheme. In general, the pension is based on 50% of average basic drawn just anterior to retirement. The pension scheme applicable to staff who joined Banks upto 31.3.2010. who join from 1st April 2010 will be covered under contributory pension scheme (NPS).

4)NPS: while all employees/pensioners who are on the Bank’s roll as on 31.03.2010 will be covered under the above defined pension schemes and who join from 1st April 2010 will be covered under contributory pension scheme (NPS) as per wage agreement of IBA with Bank unions during 2010.  Under NPS 14% contribution from Bank and matching contribution by employee to the scheme. The new employees will get a return linked to whatever their fund earns and extent of monthly pension will be determined by the cost of whole life annuities with several Options when they retires.

Normally in wage settlement, certain portion of dearness allowance is merged with basic after loading some agreed increase. So basics will be revised from that settlement effective date. The bipartite wage settlements had effected from these dates, 5th-1.11.87, 6th-1.11.92, 7th-1.11.97, 8th-1.11.2002, 9th-1.11.2007, 10th-1.11.2012, and 11th-1.11.2017. Those who retires after a wage settlement effective date will get updation of basic pension due to the revision in basics. In other words Pensioner who had retired  before these days got  lower pension than those who retired after a settlement date just one month later even though their grade, service and the stage-in-pay scale are same.

For example, In 11 bi-partite agreement, a pensioner at the age of 60yrs retired on or before 31st Oct 2017 gets lower pension than that of his junior retired on or after 1st Nov 2017 ie one month later, even though their other factors are one and the same, in all banks.

Whereas in State Bank of India even higher grade officer retired on or before 31st October 2017 may get lesser than that of lower grade officers (scale V to scale II) who retired on or after 1st Nov 2017 due to 50% of average drawn basic up to maximum scale of JMG I and there after 40% with minimum pension mark.

Similarly the pensioner who retired on or before 31st Oct 2012 got lesser than that of who retired on or after 1st Nov 2012. The pensioner who retired on or before 31st October 2007 got lesser than that of who retired on or after 1st Nov 2007. The pensioner who retired on or before 31st Oct 2002 got lesser than that of who retired on or after 1st Nov 2002. The Pensioner who retired on or before 31st Oct 97 got lesser than that of who retired on or after 1st Nov 1997. The pensioner who retired on or before 31st October 1993 got lesser than that of who retired on or after 1st Nov 1993. The Pensioner who retired on or before 31st October 87 got lesser than that of who retired on or after 1st Nov 1987.  

Though new pay scales effected after every wage settlement in 1987, 1992, 1997, 2002, 2007, 2012, 2017, Pension had been updated but not revised based on 50% of notional basic, since 1987. It has created such an anomalous and unfair situation that a Top Executive Grade General Manager who retired before 1.11.1987, draws lesser pension than a clerk who retires currently. This has caused acute financial hardship to the older senior pensioners. That’s why pension revision become necessary after every wage settlement. If revision of basic pension of earlier pensions were taken place, based on 50% of notional basic along with wage revisions, this anomaly wouldn’t have occurred and follows One Rank One Pension formula.

No such anomaly arises, in the service of Central govt., State Governments, Railways, telecom, Defence as well as 100% owned RBI, NABARD, MTNL, BSNL, due to pension revision. This issue crops up in SBI and Public sector Banks due to non revision of pension  since 1987.  When Revision of pension is not a demand to grant a fresh benefit as it is already provided in Pension rules and regulations in SBI, in the Pension Settlement of 1993 and incorporated in Bank Pension Regulations 1995 vide Regulation 35(1), Why this partiality towards Bank Pensioners?  We, senior citizens, nearly 5 lac Bank Pensioners of this country, meticulously implemented every programme of the Government/Nation for the economic development of our country with such dedication like any other services of the government. SBI is the Government Bank. Public sector banks are owned by GOI. This is the public perception for decades and Bank staff were treated at par with government servants. With that view then Bank staff were called for election duties and we did that. After Supreme Court judgement that Bank staff are not government servants, government view might have changed.

Revision involves additional cost. It is observed that every year pension payments covered by 90% of interest income on pension funds only bank contribution is hardly used. The cost of revision of pension has been calculated for all the 4,41,000 pensioners who have retired upto 31.10.2017 and are eligible for revision of their pension as per the salary revision settled on 11.11.2020. Annual increase in the pension for all the banks including SBI comes to Rs.5,323 crores as illustrated below:

a) The interest income and regular annual contribution to the Pension fund was Rs. 32,023 crores during the year 2018-19.

b) The amount of regular pension and family pension paid during the year 2018-19 was Rs.17,415 crores.

c) Undisbursed/unutilised surplus in the Pension Fund for the year 2018-19 was Rs.14,608 crores.(a-b)

d) Additional liability towards pension revision comes to Rs.5,323 crores using RBI updation factors. 

From the above details it is clear that even after grant of revision of pension there will remain an annual surplus of Rs. 9,285 crores (c-d) thereby obviating the need for any additional immediate provision and thus protecting the balance sheets of the banks. But it’s non-inclusion in the 11th bipartite settlement has left more than 4,41,000 pensioners disappointed.

The address and reiteration by Hon'ble FM to the 73rd AGM of IBA regarding one rank one pension (OROP) in public sector Banks have truly raised the hopes and aspirations of all Bank retirees. Is one rank one pension (OROP) kind of scheme, in the works for retired bank employees? On the same analogy pension should be paid at half of the last drawn average salary or notional pay equivalent to stage by stage last drawn pay due to all the subsequent salary revisions. where the pension would be reworked so that everyone who retired in the same grade and stage in pay scale will get the same pension, irrespective of the date of retirement. 

*So we demand pension revision on RBI lines.

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*SBI pension Revision

CPF in SBI:

The British Government decided to provide financial cover to retired employees of the three Presidency Banks, for their post retirement life. The system was structured by the Indian Pension Act of 1871. Bank of Bengal, Bank of Bombay and Bank of Madras were merged in 1921 to form Imperial Bank of India. The interests of the employees of erstwhile Banks were protected. In 1955 SBI was constituted by an Act of Parliament which took over IBI. The system of CPF was started in British India and those benefits were protected when SBI took over from Imperial Bank of India. All the service conditions and superannuation benefits were protected. Under SBI ACT 1955 the Central Board has made CPF and pension Regulations after consultations with RBI and sanction of GoI. Under the above authority, SBI is contributing 10% of Basic pay towards Provident Fund along with matching contributions or more by employee. SBI has never showed its inability to pay legitimate dues. 

Pension in SBI:

In the Banking Industry, employees of the IBI and thereafter SBI were the oldest recipients of Pension which was paid since the time of three Presidency Banks which was continued as such after their amalgamation with IBI in 1921 and further in SBI in 1955. Pension scheme of SBI earlier provided for a contribution Of 5% of the salary by the Employee in to the pension fund. However, this was done away with from the year 1968. SBI is contributing to the fund more than what is mandatory because of Actuarial Assessment and because SBI pension scheme is a Defined Benefit Scheme which means the pension scheme is characterized by a limit and the limit is governed by Pension Fund Rule No.23 in terms of which pension shall be 50% of last drawn average salary just anterior to retirement. The concept of maximum Ceiling on pension existed in Presidency Banks and during the times of Imperial Bank of India also. This limit 50% of last drawn average salary is applicable to all eligible retirees from subordinate staff to the DMD. Pension rules and regulations in SBI has clauses for updation of pension after wage revision regarding employees retired during wage revision period. SBI has proposed seeking for upward revision of pension ceilings from Bi-partite settlements period and also shifting of effective date of updation of pension ceiling of retirees in that bipartite period. In SBI, pension is based on 50% of average basic drawn just anterior to retirement. The Pension Scheme in SBI in earlier times was a defined benefit scheme i.e. it always had an upper ceiling attached to it. Gradually, the pension scheme of SBI, the upper ceiling has been removed and a concept 50% / 40% has been introduced in 1993. Now Officers from scale II and above getting 40% of average basic drawn just anterior to retirement from 1.3.1993.

Gratuity in SBI

New pension Rules” for Central Government Retirees is dated 1972 and Gratuity Act is also dated 1972. Before promulgation of Gratuity Act 1972 there were two retiral benefits in SBI pension and CPF. Gratuity is a welfare measure and provides financial ease for the retiral life.  The SBI had categorically asked Central Government for exemption from the liability under Payment of Gratuity Act 1972. But the Central Govt. did not grant exemption saying that it was a welfare measure and statutory obligation. SBI staff got this benefit from that date.

Sastry award 1953

Desai award 1962

1st Bipartite(1966-70) period: w.e.f. 1.1.1967 thou due from 1.1.1966.

2nd Bipartite (1970-74) period: w.e.f. 15.9.1970 Thou due from 1.1.1970.

3rd Bipartite (1978-82) period: w.e.f. 1.9.1978 thou due from 1.9.1978.

4th Bipartite (1983-87) period: 1.7.1983 thou due from 1.9.1982.

5th Bipartite(1987-92) period: wage revision effective date is 1.11.1987 thou due from 1.7.1987. Updated pensions to Retirees who retired after 1.11.1987 based on new scales effected from 1.11.1987. During 5th and 6th bipartite settlements were done upto scale of GM. Scales of CGM/DMD were settled later at each bank level. So earlier settlements period DMD scale was taken to fix maximum pension. So, higher officials got lesser pension due to maximum pension ceiling fixed based on previous maximum scale of DMD. Maximum pension fixed at Rs.2400/- (50% of maximum basic Rs.4800/- of DMD in 4 bipartite period) instead of pension ceiling should be Rs.3775/- (50% of Rs.7550/- i.e. maximum salary of DMD in 5th bipartite). A highest retiree of this period is getting Rs.2400/- as maximum basic pension even today. SBI had informed that around 1637 pensioners are covered under 5th BPS at present.

ii)6th Bipartite(1992-97)period: wage revision wef 1.11.1992(award)/1.7.1993 (supervising) thou due from 1.11.1992. Updated pension paid to Retirees who retired from 1.7.1993 based on new scales with maximum ceiling of Rs.3775/- (50% of 7550/- maximum basic of DMD in 5th bipartite) instead of Rs.4250/- (50% of Rs.8500/- maximum salary (DMD) in 6th bipartite. Pensioners retired between 1.11.1992 to 30.6.1993 getting pension based on 5 th bipartite scales and maximum pension Rs.2400/- even today. Even after 1.7.1993 a highest retirees of this period are getting Rs.3775/- as maximum basic pension even today. At present 1801 pensioners are covered under the 6th BPS. PSBs came on pension scene from 6th BPS in 1993 and third retiral benefit i.e. pension in SBI is being targeted since then.

iii)7th Bipartite(1997-2002) period: wage revision effective date i.e.1.11.1997 (Award Staff) and 1.4.1998 (Supervising Staff). The new cut off of 50%/40% is introduced from 1/3/1999 which successfully taken away third retiral benefit in SBI. Updated pension based on new scales paid to Retirees who retired from 1.3.1999 with maximum pension ceiling of Rs.10520/- (40% of Rs.26300/- I.e. maximum salary (DMD). Retirees from 1.11.1997 to 28.2.1999 getting pension based on scales 6th bipartite and maximum pension Rs.3775/- even today. For officers' pension is 50% upto a cut-off pay upto Rs.8500/-pm  I.e. maximum salary (DMD) in 6th bipartite period thereafter reduced to 40% of the pay exceeding Rs.8500/-pm subject to a minimum pension of Rs.4250/-pm. A highest retiree of this period is getting Rs.10520/- (instead of Rs.13,150/-) as maximum basic pension even today. If effective date changes from 1.3.99 to 1.11.97, Minimum pension changes to Rs.6883/- (50%). At present 27558 pensioners are covered under 7th BPS. Since PSBs came on pension scene, three retiral benefits in SBI are being targeted. They equated to 2 1/2 retiral benefits of other banks (pension + gratuity + self contribution of PF) by introducing 40% basic as pension in SBI from 7th BPS I.e.(pension + gratuity + PF - recovery of 10% basic+DA after retirement in lieu of 10% bank’s contribution to PF during service period).

iv)8th Bipartite(2002-2007)period: wage settlement effective date 1.11.2002. Updated pension based on new scales paid to Retirees who retired from 1.5.2005 with maximum ceiling of Rs.15560/- (40% of Rs.38900/- maximum salary (DMD) is not according to Pension Regulations (50%). Retirees from 1.11.2002 to 30.4.2005 getting pension based on scales 7th bipartite and maximum pension Rs.10520/- even today. The cut-off pension of 50% has been linked upto Maximum Pay Scale of JMGs-I including stagnation increments thereafter officers paid 40% of basic with a minimum basic pension of Rs.10520/-. 8th Bipartite retirees from 1/11/2002 to 1.5.2005 are getting pension based on scales of 7th bipartite with maximum pension of Rs.10520/- even today. A highest retiree of this period is getting Rs.15560/- (instead of 19450) as maximum basic pension even today. At present 7945 pensioners are covered under relevent period of 8th BPS.

v)9th Bipartite(2007-2012)period: wage revision effective date is 1.11.2007. Updated pension based on new scales paid to Retirees who retired from 1.11.2007 with maximum ceiling of 30000(40% of Rs.75000/- maximum salary (DMD). 50% upto JMG I scale there after 40% with a minimum of Rs.15750/-. A highest retiree getting maximum basic pension Rs.30000/- (instead of 37,500) even today.

vi)10th Bipartite (2012-17)period: wage revision effective date is 1.11.2012. Updated pension based on new scales paid to Retirees who retired from 1.11.2012 with maximum ceiling of 51,490/-(40% of Rs 127500/- maximum salary (DMD). 50% cut off upto JMG I scale there after 40% with minimum basic pension is Rs. 25745/-. A highest retiree of this period is getting Rs.51490/-(instead of Rs.63750/-) as maximum basic pension even today.

vii) 11th Bipartite retirees(2017-22): wage revision effective date is 1.11.2017. Updated pension based on new scales paid to Retirees who retired from 1.11.2017 with maximum basic ceiling of 51,490/-(40% of Rs 127500/- max salary (DMD). 50% cut off upto JMG I scale (Rs.80450/-) there after 40% with minimum basic pension is Rs.40,225/-.

It has created four anomalies 

1)maximum pension ceilings in earlier wage settlements: Pension Rules/Regulations provide that pension will be based on 50% of last drawn average salary with a rider of maximum pension ceiling of 50% basic of DMD. Before industry level settlements, all the scales upto DMD used to be settled at once at Bank level. During 5th and 6th bipartite settlements were done upto scale of GM. Scales of CGM/DMD were settled later each at bank level. So earlier settlements period DMD maximum scales were taken to fix maximum pension. So, higher officials got lesser pension due to maxim pension fixed based on previous settlement period. Pension is a corollary to the (revised) pay then again they need of sanctioning of pension which is a definite denominator of revised basic pay.

2)effective date of commencement of payment of pension in relation to 7th and 8th even 6th Bi-Partite Retirees: When Pension is related to last drawn average salary, just anterior to retirement, then date of pension payment should be a relevant date and not an arbitrary one like 1/7/1993,  1/3/1999 and 1/5/2005. When 5th,6th, 9th and 10th bipartite pension is being paid /recommended to be paid from the respective dates of revision of salaries then why deny it to 7th and 8th bipartite retirees only? The serving staff Unions / Associations illegally and without authority from pensioners entered in to agreement adversely affecting the interest of SBI Pensioners. It is a double standard to say that revised pension payment is not automatic and not linked to salary revision because it is not provided in the rules / regulations of pension payment and hence Central Government’ approval is necessary each time the salary is revised.

3)50%-40% pension for officers scale II and above in SBI: When presidency Banks were merged to form Imperial Bank of India all interests of employees were protected. When SBI took over from Imperial Bank of India in the year 1955 all service conditions including superannuation benefits were protected. In SBI, pension is based on 50% of average basic drawn just anterior to retirement since inception. PSBs came on pension scene from 7th BPS and the pension in SBI is being targeted since then. Upto 6th bipartee retirees paid 50% of last drawn pay. Then pension of 40% last drawn pay introduced to take away the third retiral benefit (50%-40%=10% in basic pay+DA there on after retirement as a recovery in lieu of 10% paid by SBI for PF during in service to equate with public sector Banks). The concept of 50%/40% is nothing but to recover employer’s 10% contribution made towards CPF during in service from the pension (10% basic+DA there on) from retirement date there by equating with other public sector Banks PF. It is 50% for award staff and upto maximum basic of JMG I there after pension is reduced to 40% with a minimum benchmark. Therefore, the recovery of the same in the form of 50%-40% is illegal and unjust and against Constitutional Guarantees. when CPF is an inherited / protected factor and payment of Gratuity was made compulsory by the CG then it is wrong to say that SBI pensioners are getting 3 retiral benefits. It is a legacy. Such reduction is illegal, unauthorised, unjustified and violative of certain Constitutional Guarantees. The Aggrieved pensioners have been protesting since its introduction. 5th and 6th bipartee retirees paid 50% of last drawn pay, On the same analogy pension should be paid at half of the last drawn average salary to the all retirees of subsequent salary revisions i.e.7th, 8th, 9th, 10th and future BPSs.

4)lesser pension for earlier retiree’s: Those who retires after a wage settlement effective date will get more basic pension due to the revision in basics. In other words Pensioner who had retired  before wage revision effective date got  lower pension than those who retired after a settlement date just one month later even though their grade, service and the stage-in-pay scale are same.

For example, In 11 bi-partite agreement If wage revision, a pensioner at the age of 60yrs retired on or before 31st Oct 2017 gets lower pension than that of his junior in age retired on or after 1st Nov 2017 ie one month later, even though their other factors are one and the same. It created anomaly lesser pension for earlier retiree’s. so revision of pensions is vital.

On the same analogy pension should be paid at half of the last drawn average salary or notional pay equivalent to stage by stage last drawn pay due to all the subsequent salary revisions. where the pension would be reworked so that everyone who retired in the same grade and stage in pay scale will get the same pension, irrespective of the date of retirement.

*So we demand pension revision on RBI lines.

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Any corrections welcome