PENSION REVISION - DEVELOPMENTS
Srinivasa Murti Devulapalli
PETITION UPDATE
PENSION REVISION - DEVELOPMENTS
My Dear Friends,
I take pleasure to annex the message extract from Mysore Bank Shathayu - Februaty 2021 - a monthly House Magazine being published by State Bank of Mysore Pensioners' Commune - published by our Learned Friend - Com. C N Prasad, Genl. Secy. of SBM Commune /AIRBEA , who has been in fact, playing sheet anchor role in all our legal battles for over two decades with successfully securing various deprived benefits which you are all quite aware of.
Please go through the contents carefully for better clarity concerning the issue of Pension Revision.
LET US HOPE THAT ALL OUR COLLECTIVE EFFORTS WOULD ULTIMATELY CULMINATE INTO SUCCESS IN THE SOLE INTEREST OF JUSTICE AND FAIRPLAY...
“|| यतो धर्मस्ततो जयः ||”IS THE ULTIMATE......
I remain - Yours,
దేవులపల్లి శ్రీనివాసమూర్తి /Devulapalli SrinivasaMurti.
FEBRUARY 19, 2021
Ramavarappadu- Vijayawada 521108
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QUOTE:
PENSION UPDATION - DEVELOPMENTS
(Mysore Bank Shathayu - February - 2021)
"Revision of Pension is an important subject which is agitating in the minds of Bank Pensioners, for a long time. It is natural to expect revision of pension in Banks, especially when pension is revised in respect of Central / State Government Pensioners, Reserve Bank of India Pensioners, etc.
There was an expectation about revision of pension, before 11 11 2020, the day on which 11th. Bipartite Settlement and 8th Joint Note were signed in the light of what is stated Hon'ble Finance Minister in an interview to a daily. There was also a News Paper Report which stated that Pension would be on the lines of "OROP" formula.
At the same time, our Commune through earlier issue of Mysore Bank Shathayu expressed its opinion that Revision of Pension is not an easy task and it would take time. Members were also requested to have some patience. It was also informed that Revision would happen only through aqn agreement / joint note between UFBU constituents and Indian Banks Association. Members were requested to have patience and not to fall pray to misinformation through social media. Slowly members are realizing and understanding the challenges.
Time and again, members are informed that pension in banks in lieu of Banks' portion of Provident Fund. It is reiterated that Pension Fund is not that of Pensioners. There is no contribution by employees / pensioners to pension Fund. Provident Fund contributed by the Banks , not by the pensioners were transferred, when employees opted for pension. Those who had retired refunded provident fund contributed by the bank only. They did not pay their portion of Provident Fund. Seperate Pension Funds are managed by a Trust. The objective is to protect continued payment of pension, even in the eventuality of liquidation / closure of companies / Banks. It is also to ensure that there would not be any claim on these monies from creditors, in such a situation. Even though pension is paid out of Pension Fund, contribution to these funds are made by Banks from out of Profit and Loss Accounts of the Banks. Balance ins Banks' Pension Funds include liabilities towards existing pensioners and also employees who are entitled to pension in terms of the Pension Regulations. This contribution is made based on the actuarial report obtained every year in terms of regulation 11, which is in additon to 10% of 'pay' . The balance in pension fund should be equal to an amount required to pay pension till last pensioner / family pensioner survives. They calculate the amount required to be maintained such that the balance in pension fund would nil, upon the death of the last pensioner. Actuaries consider number of pensioners / employees / family pensioners likely to die during the year, based on the mortality table prepared by LIC of India.
They also consider the inflation rate and number of employees / pensioners retiring / die. Therefore, it is incorrect to say that the details of pensioners / employees would accrue surplus in Pension Fund.
Pension Fund balance should be enough to pay pension to all those who are entitled to receive pension in terms of Regulations as existing on the date of their retirement.
Consequently any improvement or enhancement of pension requires additional contribution to pension fund to meet additional requirement.
The Government may allow amortization over a period of time , to ensure that banks can spread this additonal liability over a period of time instead of one year, if and when pension is revised Some are claiming that there is surplus in Pension Fund. That is not true. They are ignoring the fact that balance in pension fund includes liabilities in respect of existing employees have accrued , but disbursal has not commenced. Already in some banks, amount of pension being paid is more than the returns from the pension fund investment. Maintaining adequate balance in pension fund is mandated by "Accounting Standards-15". Income Tax Act Rules and Trust Act decide on investment of monies. There is no independence to any authority including Banks to decide on the classes of investment. Therefore, members are requested to ignore messages or information being provided / circulated in social media by those who are ignorant of laws governing payment of defined benefit plans, like payment of pension in terms of Pension Regulations. It is reiterated that employees / pensioners have not contributed any money to the Pension Fund , pension fund does not belong to the pensioners and payment of pension is not dependent on balance in pension fund. Members are requested not to get misguided.
There was a question raised by Hon'ble Member of Parliament, Shri M V Shreyans Kumar in Rajya Sabha on 02 02 2021 relating to Revision of Pension. Hon'ble Finance Minister has replied that Pension in Banks is a funded scheme, funded out of revenues generated. It was also informed that there is no provision in Pension Regulations for revision of pension and dearness relief which is being paid in terms of Regulation 37 is being revised at half yearly intervals based on consumer price index. Regulation 35 (1) is only for initial fixation of pension. It is also stated that IBA has not advised member banks to update pension in its 72nd. AGM. Proposal for family pension revision is received by the Government on 25 01 2021. On 08 02 2021, Hon'ble Minister for State in Finance has repied in Lok Sabha to Hon'ble Member of Parliament, Shri Lavu Sri Krishna Devarayulu that there is no proposal for implementing One Rank One Pension, at present. There are many messages / queries regarding these replies.
The replies provided in the Parliament are based on the facts existing on the date of reply. While replying in Parliament, Hon'ble Ministers can not speculate and answer. What is stated in the media was the opinon of the Hon'ble Finance Minister. The Government decideds on the proposals received and can not speculate on proposals. Pension in Reserve Bank of India was revised upon submission for approval. There would have been similar reply in respect of Reserve Bank of India also, if the identical questions were to be asked, before receipt of proposal. Similarly, pension in Banks would be revised only after submission of proposal by Indian Banks Association and approval thereof by the Government. But, these Ministers have NOT ruled out or denied revision of Pension in Banks. The Government would decide only upon submission of proposal by Indian Banks Association. As reported earlier, Indian Banks Association has sought actuarial report, discuss within its management committee and thereafter negotiates / discusses with UFBU. Only thereafter a decision on who , to what extent and from when would be taken.
Neither the Government nor Inidan Banks Association nor United Forum of Banks' Unions have stated that pension would not be revised.
Existence of any regulation providing for revision of pension at a later date to revise pension is not necessary for revision. Such a provision is not there in State / Central / Reserve Bank of India Pension Rules / Regulations. Still, Pension is State / Central Governments / Reserve Bank of India is revised. No pension Rules / Regulations can have provision to revise / amend itself by incorporating clause for pension Revision. They are amended incorporating clauses revising pension. Members of commune are requested to go through the previous issues of Mysore Bank Shathayu. All this information is already provided therein.
PENSION REVISION WOULD CERTAINLY TAKES PLACE.
However, there are no answers To Whom? From Wehn? What Formula ? and to What Extent? - There is no option but to wait.
REPRESENTATION HANDED OVER TO HON'BLE MINISTER ON 06.02.2021
On behalf of Apex Organisation of our Commune, All India Retired Bank Employees Association, a representation was handed over to Shri Anurag Thakur, Hon'ble Minister for State in Finance at Hyderabad, by Shri Uppu Sudhakar, Vice President, State Bank of India Retirees' Association and Joint Secretary, State Bank of Hyderabad Retired Employees Association. The representation while reminding about pension revision, also sought for extension of free Medical Insurance Coverage for all Bank Retirees for an amount of Rs. 3.00 lakhs.
This representation not only evoked positive response and Hon'ble Finance Minister assured positive decision in this regard. "
UNQUOTE:
Srinivasa Murti Devulapalli
================================ RESPONSE TO THE ABOVE COMMUNICATION FROM MY FRIEND =================================
Katari Satyanarayana •
*20 Feb. 2021 @ 05.43 hrs*
satya...@gmail.com
To:
Srinivasa Murti Devulapalli • devulapa...@gmail.com
*OFFICE NOTE (DFS)*
*Page 264 ' Periodic updation of pension'*
*(iv) Contagion effect on PSBs/FIs may have cascading effect on Banking industry as it is mentioned in Industrial level Settlement of 1993 at the time of introduction of Pension in PSBs that applicability, commutation of pension, family pension, updating and other general conditions, etc. will be on the lines as in RBI. PSBs retirees have been arguing for updation of pension. Balance Sheet of RBI is integrated with Balance Sheet of GOI, as after providing for necessary expenses etc., all surplus is transferred to the Government.*
*(v) RBI has informed that financial cost of updation of pension in RBI is Rs. 857.52 crores. As it may have contagion effect, IBA has informed that total cost of updation of pension in PSBs could be Ra. 95,000 crores. PSBs will not be in a position to take this burden.*
*(vi) This Department had examined the matter of updation of pension in RBI in consultation with Department of Expenditure in November, 2016 and in view of Contagion effect on NPS, huge financial implications on RBI & PSBs and issue of revision pension of all past pensioners, it has been decided in Feb, 2017 to keep the matter to rest for time being.*
*Please refer to above paragraphs (iv) to (vi) under the caption ' Periodic updation of pension' in the MOF (IR)'s Office Note of Jan-Feb,2018 wherein it could be reiterated that the obligation of the IBA to effect improvements in pension as could be brought out in RBI Pension Scheme, 1990 from time to time is a subsisting obligation and thus such improvement in case of RBI would bring in a contagion effect in respect of PS Banks Pension Scheme, 1995* .
*Accordingly, the GOI had decided against and declined the request of RBI for updation through its sent communication dated 26 02 2018.*
*But, however on 05 03 2019 the GOI had accorded it's sanction to RBI for updation of pension with prospective effect from 01 03 2019 providing there for the FORMULA for all the prior categories of retirees based on their respective dates of retirement.*
*As could assertively be stated in the Office Note cited supra, in the impending circumstances of a sanction to RBI , the MOF has yet to take its due administrative decision (in the same manner as in the case of RBI) to prescribe SIMILAR FORMULA for updation in respect of PS BANKS and Associate Banks of SBI also since it does not require any further modification of views of IBA on updation in the light of those already mentioned in this regard in its mandatory Pension Settlement dt 29 10 1993, and also got reiterated in its Record Note dated 15 05 2015 .*
*Thus, no further sort of reasoning is required by the MOF from IBA in this regard as is evident from its OFFICE NOTE cited supra for according of it's administrative sanction of updation to the IBA on the lines of RBI .*
*The above fact need not be ignored by all the concerned retirees of Public Sector Banks and of the ASSOCIATES of SBI at all just because no mention of SBI Pension Scheme did find a place in the said Office Note of MOF , since the merger of ASSOCIATE BANKS with SBI also necessitates the MOF to view the matter of updation similarly as in RBI for prescribing of suitable specific formula of updation for those retirees already getting governed by SBI Employers Pension Fund Regulations - 2014 also.*
*Any further question intended to be placed before the Parliament pertaining to the subject of 'Periodic Updation of Pension' in PS Banks, if any, need be based only on the already considered view of MOF on this subject as stated in its Office Note cited supra and according of sanction of updation to RBI ultimately through its administrative communication dated 05 03 2019 despite there being an earlier denial of updation( based on the said Office Note) made to RBI and communicated on 2Let prudence prevail on all the concerned with updation6 02 2018* *of pension in PS Banks.* *TAT SAT*
. *KATARI SATYANARAYANA*
*VIJAYAWADA 20 02 2021*
*INDIAN BANK RETIREE*
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