100% DA NEUTRALISATION - AIBRF

[PM]

NOTE ON UNIFORM DEARNESS RELIEF TO ALL THE PAST RETIREES:

Dearness Allowance in the banking industry is linked with the consumer price index and was calculated on basic pay/ basic pension on tapered basis up to 7th settlement. The unions were demanding uniform DA rate on the entire basic pay/ basic pension known as 100 percent DA neutralisation for several years from one settlement after another. However the success on this count could be achieved almost after follow up and continuous efforts for more than two decades in the eighth settlement. However the benefit of 100 percent DA neutralisation was not extended to those who retired before effective date of 8th settlement.

Past retirees who retired prior to November 2002 have been agitating and fighting on this issue at the organisational level and legally for last more than 8 years as they consider it as the gross injustice to them. This is the core issue for all the retiree organisations operating in the banking industry.

We are of the firm view that this core issue must be addressed and resolved in the 10th settlement to the satisfaction of the affected retirees.

Therefore it is necessary to understand the issue in its entirety. The following points are worth noting on this issue.

WHO ARE GETTING 100 PERCENT DEARNESS ALLOWANCE AT PRESENT

(1) All categories of employees who are in service of the bank

(2) All Retirees who retired from the bank service on or after 1st November 2002.

(3) All-Pre 1986 retirees on basic component of ex-gratia

(4) All spouses of pre-1986 retirees on basic component on ex-gratia (As per the recent guidelines of the government)

(5) Pensioners who retired between 01.01.1986 and 31.10.1992 and draw basic pension up to Rs. 1250/-

(6) Pensioners who retired between 01.11.92 and 31.03.1998 and draw basic pension up to Rs. 2400/-

(7) Pensioners who retired between 01.04.1998 and 31.10.2002 and draw basic pension up to 3550/-

(8) Virtually all family pensioners.

As per the data available to us, this group who receive 100% DA benefit constitute 80 percent of total pensioners in terms of number and share 85 percent of total pension bill.

WHO DO NOT GET 100 PERCENT DA NETURLISATION

The following three categories of the retirees at present do not get 100 percent dearness allowance

(1) Those who retired between 01.01.1986 and 31.10.1992 and draw basic pension more than 1250/-

8(2) Those who retired between 01.11.1992 and 31.03.1998 and draw basic pension more than 2400/-

(3) Those who retired between 01.04.1998 and 31.10.2002 and draw basic pension more than 3550/-

This group constitutes 20 percent in terms of number and 15 percent in terms of pension bill.

PENSIONERS

NUMBER PENSION BILL

(1) Getting 100 percent DA 80 percent 85 percent

(2) Not getting 100 percent DA 20 percent 15 percent

HOW MUCH LESS THEY GET

At 5211.91 index which has determined DA for 6 months from August 2013 to January 2014, the above categories of retirees get the following amount of D.A.

(1) Those retired between 01.01.1986 to 1.11.92 ( Slab 1152 ) Basic Pension

DA at present DA at 100 Difference 

              Percent amount 

Diff. per

Slab

Rs. 1251 to 2000 14400 15436 1036 0.90

Rs. 2001 to 2130 14894 16440 1546 1.34

Rs. 2130 to 3000 16598 23155 6557 5.69

(2) Those retired between 1.11.92 to 01.04.98 ( Slab 1015 )

Rs. 2401 to 3850 12794 13677 883 0.87

Rs. 3851 to 4100 13225 14565 1340 1.32

Rs. 4100 to 7000 15874 24867 8993 8.86

(3) Those retired between 01.04.98 to 01.11.2002 ( Slab 881 )

Rs. 3551 to 5650 11206 11946 740 0.84

Rs. 5651 to 6010 11586 12707 1121 1.27

Rs. 6010 to 10500 14223 22201 7978 9.05

9WHAT WILL BE ADDITIONAL COST IN TERMS OF PERCENTAGE FOR GRANT

OF 100 PERCENT DA TO PRE NOV 2002 RETIREES -- CERTAIN FACTS

(1) Those who retired between 1986 and 2002 are not getting 100 percent DA.

These pensioners have completed minimum 11 years and maximum 27 years of retirement and belong to age group of 86 - 70 years.

(2) Number of pensioners belonging to this group is now decreasing due to time factor and advancing age.

(3) After death of pensioner, either pension is stopped or converted into family pension. In either case number of pensioner not getting 100 percent DA gets reduced. This phenomena is on increase in last a few years.

(4) Basic pension of this group is comparatively almost 3 times lower than those retiring now and enjoying benefit of 100 percent DA. Therefore, financial burden for increase will be limited.

Based on the data given above, we below give approximate additional cost for granting 100 percent DA to the leftover pensioners.

LEFT OVER PENSIONERS

INCREASE IN PENSION OF LEFT OVER

DUE TO GRANT OF 100 PERCENT DA

20 PERCENT OF TOTAL

8 PERCENT APPROX

LEFT OVER CONSTITUTE OF TOTAL 20 PERCENT

PENSIONER IN TERMS OF NUMBER 

PENSION BILL OF LEFT OVER 15 PERCENT

COMPARED TO TOTAL BILL 

OVERALL ADDITIONAL BURDEN 1.2 PERCENT

ON TOTAL PENSION BILL FOR 

GRANT OF 100 PERCENT DA TO 

LEFT OVER ( 8*15/100) 

NEXT 5 YEARS ADDTIONAL BURDEN BELOW 0.5 PERCENT LIKELYTO COME DOWN DUE TO 

MORTALITY FaCTOR 

WHY DEMAND OF 100 PERCENT DA TO LEFT OVER IS JUSTIFIED

(1) Inflation affects adversely all retirees at the same degree.

(2) Discriminatory in nature.

(3) All Government Pensioners/ RBI pensioners from where pension regulations

were drawn, have already received benefit of 100 percent DA from retrospective

date.

10(4) Clause 6 of the pension settlement between unions and IBA specifically provide

for grant of DA at the rates applicable to RBI pensioners. Therefore the demand has

legal backing too.

(5) According to unions too, the agreement arrived in 8th settlement excluding pre-

November 2002 retirees was temporary arrangement to meet the cost factor of the

settlement and to introduce the concept of 100 percent DA in the banking industry for

which was fighting for 2 decades.

(6) All constituents of UFBU have included in their charter of demands

(7) Additional financial cost to grant 100 percent DA to left over is limited.

OUR DEMAND ON THE ISSUE

(1) 100 percent DA to ALL pre- November, 2002 retirees

(2) Arrears in this respect should be paid from 01-02-2005

(3) This demand should be discussed on priority basis as and when retiree issues/

superannuation benefit are taken up for discussion during 10th settlement.

(4) AIBRF should be consulted and taken into confidence before reaching any

agreement on the issue.

(5) Any improvement brought in DA formula for employees/ future pensioners in 10th settlement should be made applicable to all the past retirees too without any

discrimination.

(6) Review of DA for pensioners should be on quarterly basis or at the interval made

applicable for the employees in this settlement.

-Extract from AIBRF Memorandum to IBA dt 19th Jan 15.

[RANGARAJAN M R]

DEAR MR. MOHAN

YOU ARE AN ENCYCLOPEDIA .  WE ARE LUCKY TO HAVE YOU IN THIS GROUP

THANK YOU FOR ALL THE PAINSTAKING EFFORTS IN EDUCATING BANK PENSIONERS

AND YOUR MATURED HANDLING OF ISSUES.

RANGARAJAN

MYSORE

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[L S RAMAN]

The discrimination and injustice has been adequately explained, so that the people who were against uniform 100 % D.A could understand the situation warranting correction.

Dr.L.S.Raman.

[Prasanna K Nanda]

Dear PM,

Thanks for this  exhaustive  and detail Memorandum. Now all categories of deprived pensioners know the loss per month.

Hope IBA looking at the small amount which is needed to fulfil a long pending demand will compensate us, the deprived lot !

P K Nanda,

Bhubaneswar.

Sent from my iPad

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[Chandra Sekhar A]

Fantastic information and analysis  Some body from  Ministry of finance  if only reads this can grasp the problem

chandra sekhar