HOW LONG PENSION FUND CAN SUSTAIN ONLY WITH 10% MANDATORY CONTRIBUTION BY BANKS

[Niranjan Cn]

Sirs,

All of us have repeatedly heard and read from from retiree associations especially AIBPARC informing that there are huge corpus of Pension Fund to take care of Pension Updation and there is no need to debit P & L Account of the Banks.

These statements evoked curiosity, I have spent some time in understanding the Pension Fund.  I referred the submissions made in Supreme court by ARISE/AIBPARC (Synopsis and charts).

 

As claimed by leaders repeatedly, there is sufficient funds are available in Pension Fund, then there cannot be any shortfall.  If there is no shortfall, it is enough for the Banks to contribute manadated 10% of the ‘Pay’ of the working Pension Optees – as per Regulations. 

 

Taking into consideration the above, ie Pension Funds are sufficient/robust – the chart /brief is  prepared from the year ending 2020-21.  From the year 25-26 onwards, the figures were projected and duly explained in the table/assumptions. The ensuing 2027 BPS also factored in.  Further,  the pension paid is exceeding the Interest/income from investments from the year 2020-21 itself for information. 

 

I WAS SHOCKED TO NOTICE THAT PENSION FUNDS TURNS “NEGATIVE” FROM THE YEAR 2032-33 ONWARDS CONSIDERING ONLY 10% MANDATED CONTRIBUTION FROM THE BANKS TOWARDS PENSION FUND.  WHETHER IT IS DESIRABLE ??  WHETHER VIEW OF “ ROBUST PENSION FUND/SUFFICIENT FUNDS IN PENSION FUNDS TO TAKE CARE OF PENSION UPDATION”  – WHETHER HOLDS GOOD ??

 

Is it not a false claim that ‘Present Pension Fund is Robust and can take care of Updation’  ?

Is it required to make false claim – which we cannot prove under any circumstances.  Whom we are trying to mislead ?

 

Hope better sense will prevail.  I will be happy to receive critical comments/analysis on the figures/assumptions made in the write up.

 

Niranjan

Ex Canara

[Kalyanasundaram Subramaniam]

Thank you Mr Niranjan. 

You have taken efforts to show the futility of claiming that there is a bounty corpus fund. But the stalwarts making such a claim do not like to understand or to explain to us their claim. 

Making a statement that pension fund has got surplus to meet enhanced pension payment is totally irresponsible. Or I can say it is out of ignorance.

 

All of us may be good bankers. But it does not mean that we can also be good in all financial matters. Actuary is a separate financial profession. As bankers we do not automatically fit in there.

 

There are only 761 fully qualified Institute of Actuaries of India fellows operating in India, along with roughly 311 associate members. There are over 9000 students. The industry faces a significant shortfall compared to demand with goals to increase the total number of qualified actuaries to 25000 by 2030 to support the growing insurance sector.

 

Actuaries estimate the pension fund corpus (the total money a bank needs to set aside today) using a structured process grounded in finance, statistics, and risk modeling.

They take into account various factors like

• Employee data: age, salary, years of service
• Pension rules: retirement age, benefit formula (e.g., % of last salary)
• Life expectancy (mortality assumptions)
• Probability of early retirement, resignation, or disability
• Inflation, rate of interest, exchange rate etc.

It is a complicated process to arrive at a figure. Some assumptions may go wrong. That is why every year the estimated corpus fund is revisited and confirmed by actuaries and chartered accounts in the balance sheet.

 

Without any proof, accusing banks of having excess corpus fund may be okay for a non-finance man, but not for bankers with three or four decades of banking experience.

 

Generally, bankers are used to be blamed for making window-dressing by reducing their outgo to various provisions. But here it is the other way round. They are accused of transferring more funds from P&L to Corpus fund. Strange. 

 

S Kalyanasundaram 

[Harish Midha]

In a layman's understanding,do you mean to say that henceforth there will be no BPS and the existing staff will not get any increase .

Is not the Govt of India / State Govts giving good increase no t only to the existing staa but also to their retirees.

And how about RBI which gets major income

by way of dividend from PSBs 

Am just thinking from logic point of view. 

Kindly enlighten and suggest a practical SOLUTION.

Am a scale 2 pensioner drawing pension of 27-28 k since 1994 .

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[Harish Midha]

*inspite of deficit budgets and huge liabilities.

Hoping and praying that Hon'ble Supreme C ourt in its wisdom and arguments iby legal experts gives a judgement favouring pensioners would not the respected the so called whatsup professors not accept whatever raise is going to be there by saying that it will affect adversely the fund position of bank

A humble suggestion- if the resp what'sup professors can their intelligent minds to find and put forth their energies to find ways and mobilise support towards achieving the desired favourable result so it may provide some relief to their brothers and sisters who are facing huge constraints in this late age.

[JSOMA SHEKARA]

Mr.Niranjan

Why do you worry about pension funds too much? Leave the headache to the banks. If it is one rupee or one billion they will manage. They have taken hair cuts of more than lakh crores in NPAs. They are paying arrears to RRB pensioners from Date of retirement. Banks also paid several crores of Rupees to pensioners by way of interest in 2018. We have returned bank contributions and pension funds belongs to the Bank. Shortage, negative or excess they will manage. 

AIBRF and AIBPARC both are stooges of AIBEA and  AIBOC. Pensioners are not fools to get mislead by them. 

UFBU itself is misleading pensioners.  if we agree that AIBPARC is misleading by filing appeal based on Reg35/1. then on what basis AIBOA a part of  UFBU has filed case for updation in Bombay High Court. Is it not a plan to continue claiming sub judice in case M C Singla case is disposed?

We have grievances with Banks, IBA and UFBU. AIBPARC and AIBRF should conduct demos in front of premises of

these authorities. What is the fun in conducting dharnas in marriage halls?

But please note nobody van mislead us.

The truth is

1. There is no need  for the existence of provision for updation in BEPR 1995, for UFBU to discuss  and negotiate updation with IBA. If agreement is reached  Banks will amend pension regulation later.

2.  CHV i s not the right authority to declare there is no funds for updation. UFBU job is to discuss and negotiate a scheme and Banks will provide funds. Cost can be negotiated. Pre 2002 retirees have not got revision of basic for the last 30 years. For others, the basics has been updated two or three times. Considering these factors a reasonable scheme may be devised. Sri. C N Prasad has already suggested a formula to CHV.

If we hide these facts we are also misleading pensioners.

Let Retiree associations make huge claims. They are not negotiating authorities.

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[Ramani Konnayar]

Dear Shri Somashekar ji,

Your letter made very interesting reading to me. All of us know very well the reason for UFBU's lack of interest in taking up/fighting for the cause of updation viz., their apprehension that the resulting sizeable expenses for banks can and will jeopardize the prospects of future wage increases for their 85 % members under NPS. This has been expressed by the leaders on many occasions. This being so, it is naive on our part to hope/expect them to secure updation unless NPS is replaced by OPS, the chances for which to happen are very bleak, to say the least.

K N RAMANI 

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[Niranjan Cn]

Absolutely there is no connection between BPS and pension funds.  Never compare the Govt/RBI with us.  Improvement has to be achieved through negotiations like FP, 100% DR, etc.  Please share your actual basic and year of retirement, let us analyse once and compare.

Niranjan

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[Ramani Konnayar]

Dear Shri Kalyanasundaram ji,

I accept all that you have stated about the concept, constitution and working of Pension Funds.

My response is as follows.

When employees or pensioners make a demand for increase in emoluments, it is often based on a comparison with their counterparts elsewhere. In our case, they are Central government pensioners and RBI pensioners.

If we are to make such demands only after analysing the financial capacity of the employer, most of our demands could become unreasonable.

In my response to Sri Somashekar, I have stated the reason for the lack of interest of UFBU in the matter. 

For banks, the stringent AS-15 norms have, in fact, come as a blessing in disguise to cite the cost factor and deny updation.

By denying to accede to even minor demands like merge of DA with basic pension, improvement of ex-gratia and removal of ex-gratia anomaly for pre 2002 pensioners IBA has revealed its mind that they want to totally avoid any additional benefit. I think, they will even appeal if the judgement in the Singla case goes in favour of pensioners, unless advised by DFS to the contrary.

K N RAMANI 

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[Niranjan Cn]

Court will base the decision on facts/material placed before them.  If the facts are right and presented appropriately - judgement will be perfect.  

Sir please read the case back-papers/previous judgements/afficavits to understand.  If one base their arguments on whatsapp message - they will be misguided only.

Niranjan

On Fri, Mar 27, 2026 at 3:47 PM Harish Midha <harish...@gmail.com> wrote:

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[Niranjan Cn]

Mr. Somashekarji,

 

1.     I am not at all worried about Pension Funds.  It is the responsibility of the Banks to pay pension as per Regulations and it is their head ache.

2.     In Singlas case,  it is submitted that there are enough funds to take care of updation – which is not a fact

3.     Banks provide funds to Pension Fund as per Acturial Report and the funds is expected to be neither less nor more .

4.     I donot want to enter into blame game.

5.     The case in Bombay High Court – the grounds on which it has been filed – not at all disclosed.  The chances  are a big question mark.  Looks more like a drama.

6.     It is commonsense (for that CHV is not required) that Pension funds (existing ) cannot pay/absorb the updation cost.

7.     Problem is the fellow pensioners are totally misinformed about the funds. 

8. I am not worried about Dharnas, etc - it is only to please members.

 

My intention to drive home the point that Pension Fund can take care of the pension as per existing Regulations.  Any change/updation (like family pension costed around 18600 crores) will cost to the bank.  Ofcourse, whether banks are capable of taking care of additional load is a different debate altogether.

 

Even in last week, AIBPARC were claiming that there are enough funds to take care – members are nodding their head. 

 

Niranjan

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[JSOMA SHEKARA]

Mr.Niranjan Sir,

Being a general secretary of a large workers union CHV has authority to get data from management, Instead of giving vague statements he should collect data and provide authentic cost data of updation to prove his point so that pensioners are convinced. 

Reg 35/1 and availability of pension funds matter is before Supreme court. Verdict will come shortly. AIBPARC right or wrong will be decided by the court.

You  have learned the truth that Reg35/1 will not fetch us updation and pension funds is not sufficient to service updation. You will make all pensioners also learn this truth.

How this will get us updation,

UFBU leaders also know this. That is why they signed minutes agreeing to discuss updation issue and amend rules to provide for updation.  The mistake we are making is not exerting pressure on unions to take up updation. They should  feel heat. The moment DFS gave leaders a shock treatment they are running to courts. We have written letters to everybody in the country for updation bit not asingle representation to unions. 

Some  leaders lile RBI unions realize their responsibility and moral obligation and take retirees issyes successfully with DFS. But when we neglect issues we have to bring pressure on them.

Some 8-10 years left for most of the pre 2002 retirees. At this stage action is needed to make  leaders take up issues sp that pensioners enjoy updation for 2-3 years,

Giving sermons on Reg35/1 is of no use now. We have to go beyond that, pool our knowledge and find ways to bring leaders to the negotiating table instead of giving statements on public platforms and getting claps.

Now AIBOC filed a case regarding PIL. Will IBA and Unions consider the issue as sub judice as they are claiming in the Singla case or will IBA call a meeting shortly to discuss the issue while the case is pending in court?

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[Niranjan Cn]

Sir,

I had the opportunity to deal with Balance Sheet, Acturiarl Reports etc while in office.   Anyone reads the Annual Report it is very clear and can easily understand the funds position.  My earnest request not to go to funds area at all as it is not beneficial to us.  We should ask/negotiate what we want - and if bank banks provides a figure towards pension revision /load, then one has to work out what best can be done out of it.

Niranjan

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[Anand Rao]

‘It’s their right, not charity’: Supriya Sule raises pension upgrade demand; FM Sitharaman responds

In the Lok Sabha, Supriya Sule raised a pointed demand for upgrading pensions, emphasizing that it is the rightful entitlement of beneficiaries, not charity. Finance Minister Nirmala Sitharaman responded to the queries, addressing the government’s position on pension enhancement and workers’ entitlements. The discussion highlighted ongoing concerns over the EPS‑95 pension scheme and the need to safeguard retirees’ rights.

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[Ramani Konnayar]

Dear Shri Niranjan ji,

You have stated that improvement in Family Pension and 100 % DA to pre Nov 2002 pensioners were achieved through negotiations. In this regard, I am under the impression that while these were indeed routed through the bilateral mechanism by a MOU between IBA and UFBU, the MOU was not preceded by any negotiations. Because, I don't remember to have seen any communication from UFBU containing minutes of the relevant meetings/negotiations. On the other hand, ex-gratia had been negotiated in the 12th BPS, it is understood. However,

details of the FP improvement as well as 100%DA which happened ahead of the BPS were duly incorporated in the 12th BPS along with ex-gratia. But, the sad part of it is, while Ex-gratia was implemented from 1/11/2022, 100% DA was implemented nly prospectively wef 1/10/2023 denying arrears completely.

K N RAMANI 

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[Prasad C N]

Dear Shri Ramaniji,

Thankful to the Almighty, leaders of our Association have been provided with ability to have forward thinking.  We are attaching copies of two letters addressed to SBI regarding extension of OPS to NPS retirees.  We are confident of getting them and we are sure you will also agree with us, once you read the letter.

We are not simply accuse others of false Affidavits. As a first step, we have sent communication regarding initiation of per-jury proceedings for misleading the Court.  We have quoted from the affidavits and documents.   

Thanks, a Million. 

With regards,

Prasad C N

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[Ramani Konnayar]

Dear Shri Prasad ji

I wish and pray that the efforts of your organisation to bring back BEPR 1995 to replace the NPS that was introduced wef 2010 fructify soon. If it happens for pensioners and employees of SBI, it will percolate down to those of PSBs too as it did in the case of 100% DA to pre 1/11/2002 retirees. More importantly, this will spur UFBU to take up the cause of updation more vigorously.

K N Ramani 

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[Prasad C N]

Dear Shri Somashekara,

I am not holding any brief for Com.CHV.  Since, I was present in the meetings where he spoke about Pension Fund and I am also in possession of a Video, What he said or stated or stating is that 'there is no fund in Pension Fund forupdation'.  

Why is it being said is because we, some of our knowledgeable leaders and organisations are stating that there is huge money available in the Pension Fund.  It is unfortunate that we agree and substantiate such a stand of these leaders. It is unfortunate that we want to lay our hands on the amount in Pension Fund which is for payment of pension in terms of existing regulations.  Please remember golden goose story.

Quantum of requirement, data, etc. come into picture only upon willingness to update.  

Thanking you,

With regards,

Prasad CN

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[Satyanarayana Rao]

Our debate and discussion is on the outcome of Singla ji Case which is on fast track for final verdict.
Now the judges shall give very favourable verdict and let us wait for final verdict.
The rest the issue like, pension fund and what someone has said about our issues are not important.
Now what judgement the learned judges deliver is very important.
Till such time let us wait for final verdict without indulging in extraneous statements.

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[Prasad C N]

Dear Shri Sathyanarayana Raoji,

We must expect very favourable verdit.  But, you are not saying what is very favourable verdit, which you are expecting Hon'ble Judges to give in Singla's case.  We shall not debate further, if you can give the specific answer.

Thanking you,

With regards,

Prasad CN

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[Sridhar Mandyam]

When it assumed that the judges give favourable dicision why should we wait.

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[MOHAN P]

Dear Friends,

01.Even while submitting the chart before Hon.Apex Court as per direction of court Respondent-  IOB retirees Association(AIBPARC) could not reveal the formula they have applied to arrive updated pension figure.Just gave a total figure with narration"amount if pension is updated" Not mentioned specific revised Basic Pension,DR there on  and the formula applied to arrive the figure!

02.As per AIBPARC earlier communication available before us, to bring the retirees under 1987 to latest settlement period a multiplication factor of 28.25 has to be applied.(Different MF for other groups of retirees )

03.If we apply their own formula here the total amount shown now under 'updated amount ' found to  be less.

If respondent itself present such  data without any explanation/details   before Hon court what would be the outcome?

( Refer the chart available under our forum)Clerks BP.830+DR 553= Revised Basic Pension Rs.1383) On updation of above BP Rs 1383 at current level total amount shown comes to Rs.38815/)

This is the case with other columns too.

04.When they circulate a formula ( on RBI line or any ) naturally illustration or example should also be in tune with that. 

We have not seen any clarification.Still we anticipate a lot from Hon.Court.

Regards

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[JSOMA SHEKARA]

RBI did not have provision for the updation  in their pension rules. When there is no provision naturally no formula was specified in the rules. When demand came DFS  stipulated a formula.

LIC pension regulations also did not have provision for updation. But their  Board in 2001 passed a resolution providing for updation. Agreement regarding pensioners benefits are discussed and negotiated by IBA and UFBU. Pensioners are not involved in discussions. Law suit should be filed within 6 years from the date of cause of action.  Pensioners could not have waited for ever for unions to take up issue.  MC Singla filed case in 2008 with delay and court though took objections for delay admitted case. Since then  twice WP was rejected by High court.

Right from 2008 we blaming singla, pointing oit his mistakes in presenting case and also when case was dismissed we proudly said "we told you so"

Bur we did not any time asked union leaders to set right anomaly pointed out by High court and take steps to amend pension regulations.As much as M C Singla and AIBPARC we are also at equally at fault  for not raising our voice for amendment of pension regulations. We understand it is difficult to reach leaders as they are not accessible to ordinary mortals like pensioners and we choose easy way of trolling litigants

It is the moral obligation of union leaders to discuss, negotiate and make provision for updation and we cannot blame litigants.

IBA and UFBU intention is that M C Singla case should fail at any cost, so 08.03.24 minutes were abandoned..

Hon.Judge of High court of Karnataka observed why litigants not demanded extension of Reg35/1 to all?

Hon. Judge of High court of P&Haryana said 'Litigants instead of negotiating issue with management could notn have come to us". Both observations are directed at Union leaders.  Even when  court itself ordered unions to take up the issue why IBA and UFBU claiming sub judice? We only cherry pick parts of the verdict to blame litigants and not these observations directed at unions

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[Satyanarayana Rao]

In allmost all my mails i have uneqiokaly expressed that the petitioner's are arguing and requesting the supreme court for justice though we the pensioners lost the case in heigh court.
The learned judges of Supreme are hearing the case and the judgement is on fast track.
As the judges have understood that there is injustice perpetually forced on pensioners by various forces like IBA and DFS etc.
As u Very carefully fallow the proceedings and the supreme court bench is revisiting the pension regulations and they will take a final call and direct the defendants to implement the pension updation /revision on the RBI formula under article 14 and16 and 21 of the constitution to restore the justice on the principles of Natural justice and fair play and equity by applying the principles of jurisprudence.
As the DFS has already agreed and implemented the formula in RBI and also extended to Nambard retirees though there is no provision for pension updation.
Now it is left to highest judiciary and to  the Wisdom of the judges to reverse the lower court verdict and put an end to the decades old struggle launched by Sri Singla ji and other veterans who have knocked the doors of the Supreme court for justice.
I am confident that the judges have emphatically understood that there is injustice and we will get favourable verdict and the formula of pension updation shall be on RBI formula under article 14 and16 and 21 to maintain equity, natural justice and fair play which are the foundation and support the fundamental rights ensured to the pensioners and similarly placed victims of the suppressive action of executives with sole intention of denying the just rights of the retirees.
Let us wait for the final verdict which is going to be in our favour as firmly believe that the petitioners Shall celebrate the judicial victory in pension updation case and put an end to all ifs and buts and doubts raised by the learned participants in the debate.
Pl wait and watch.

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[Ramani Konnayar]

Dear Shri Mohan ji,

The Hon. Court has called for some statistics apparently to analyse and decide if there exists a genuine and legitimate case for updation of pension.

In this background, is there no possibility at all for the Hon. Judges to conclude that the pensioners' demand deserves a sympathetic consideration and leave the issues of quantum of increase, formula for calculation etc., to be negotiated between IBA and UFBU,  without the Court delving deep to check the arithmetical accuracy, etc.?

My point is, it costs nothing to remain hopeful, while also being prepared to face disappointment l, to which we are well accustomed to.

K N RAMANI 

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[S.T.CHANDRASEKHAR Babu]

We have nothing to do with pension fund. It is statutory obligation of banks to provide for as per actuarial. Pension is a deferred wage.we need not bother about these issues.

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[Niranjan Cn]

Somashekarji, you are right RBI - updation clause was not there.  For information no regulations can have clause for future (as it is not certain).  There cannot be any clause without formula/formulae.  For giving benefits, clause is not a must - we have example of improvement in family pension 100% DR, etc.  IBA has filed affidavit stating so because - petitioners claimed that there is a updation clause, petitioners claimed that there are funds to meet the updation - IBA filed the counter.  Whatelse one can expect from IBA.

Hope and pray - let the Singlas case be concluded this month e=itself - paving way for improvement in pension for all.  

Niranjan

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[CHIRAMEL MATHEW SIMON]

Banks' PO ension scheme constitutes a Defined Benefit Plan, which is a post-employment benefit as per AS-15,  which is largely different from  defined contribution plans. Under the defined benefit plan, the actuarial and investment risk falls upon the employer (bank), for which  a very detailed actuarial calculation is performed every year to determine the charge.

Thus, we the employees need not worry about the availability or sufficiency of Pension funds.

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