MY DEAR FRIENDS,
RE : PENSION UPDATION - THE GROUND REALITY
Some of our friends are nurturing apprehensions as to the reality of pension updation, owing to the fact that the same is not figured in the XI BP settlement already signed
Please be informed that the Updation of Pension has been made outside the purview of Bipartite Settlement.
However, It’s being favorably considered owing to the sustained pressure built by many of our comrades for over two decades.
But certainly will be taken up as a separate issue as already directed by the Hon’ble Finance Minister during the AGM of IBA on 10 11 2020.
In this connection, I reproduce the news clip that gives you a bird’s eye view of the issue and the contemplated plan of action –
As per the suggestions made by the Hon’ble Finance Minister – Smt. Nirmala Sitharamanji during the course of Her Address , the CEOs of the Banks have responded positively and therefore, are expected to submit proposals for Pension Updation to the Government and Upon its clearance , the same will be notified in the Gazette to give effect to the necessary amendments in the Pension Regulations.
This process, obviously take a couple of month and we are sure to reap the fruits of our sustained struggle for over two decades.
Kindly go through the text of the news clip. The contents are self-explicit:
With Greetings & Regards,
“|| यतो धर्मस्ततो जयः ||”IS THE ULTIMATE......
I remain - Yours,
దేవులపల్లి శ్రీనివాస మూర్తి /Devulapalli Srinivasa Murti.
NOVEMBER 11, 2020
Ramavarappadu- Vijayawada 521108
https://drive.google.com/file/d/19DtqPP-Cve0I_fS2vppB2LiVl9_W0oYT/view?usp=sharing
QUOTE:
Times of India; Mumbai : 10 Nov.2020
A one-rank, one pension (OROP) kind of scheme is the works for retired PSU bank employees.
OROP was longstanding demand of armed forces’ veterans, where the pension would be re-worked sot that everyone who retired in the same rank will get the same pensioin, irrespective of the date of retirement.
Finance minister Nirmala Sitharaman has sounded off banks to do more for employees who retired earlier so they are not discriminated against in terms of pension. The Government has also asked banks to review the family pension scheme so that the pension is the same as the Government.
The family pension scheme is likely to be announced on Wednesday when the Indian Banks’ Association (IBA) is set to unveil the 11th. Bipartite Wage Settlement. This has been due since November, 2017 and although the memorandum of understanding was signed in July, the deal took time to finalize. Banks currently have a family pension scheme, but it is a truncated version of what is available for other government employees
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NEED FOR RESTRUCTURING
# AN UPDATION OF THE PENSION SCHEM IS SEEN AS NECESSARY BECAUSE A BANK EMPLOYEE WHO RETIRED IN THE 1990s GETS A FRACTION OF THE PENSION THAT A RECENTLY RETIRED EMPLOYEE DRAWS.
# THIS IS BECAUSE THE PENSION IS LINKED TO THE LAST DRAWN BASIC SALARY, WHICH WAS CAPPED AT Rs.10,000/- IN THE 1990s
# TO REMOVE THIS DIFFERENCE, BANKS WILL NEED TO UPDATE THEIR PENSION SCHEME
# EMPLOYEES WHO RETIRED BETWEEN 1986 AND 2010 ARE ELIGIBLE FOR DEFINED BENEFIT PENSION
# BANKS HAVE ALREADY DONE SOME ROUGH CALCULATATIONS BASED ON AN ACTUARIAL VALUATION OF PENSION LIABILITIES DONE IN 2018.
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An updation of the pension scheme is seen necessary because a bank employee who retired in the 1990s gets a fraction of the pension that a recently retired employee draws. This is because the pension is linked to last drawn basic sarlary, which was capped at Rs.10,000/- in the 1990s. To remove this difference, banks will need to update their pension scheme. Employees who retired between 1986 and 2010 are eligible for a defined benefit pension. Banks have done rough calculations based on an actuarial valuation of pension liabilities done in 2018.
Although the annual outgo is not very high, there will be an upfront cost to revamping the family pension scheme. Banks are required to maintain funds to meet future pension liability and this provision requirement keeps going up as interest rates fall and life expectancy increases without any change to the pension scheme. So, an increase in future liabilities could result in a sharp one-time increase in provisioning.
Sitharaman sounded off banks on the need to treat pensioners fairly during her interaction with them at the IBA’s 73rd. Annual General Meeting on Tuesday. The Annual meet attended by bank chiefs, including IBA Chairman Rajkiran Rai.
Bankers are understood to have said that the health of the industry was better than expected.
UNQUOTE: