Penalize Indian Oil that retro-terminated SABF pension in the year 2011 wef Dec. 31, 2006
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I am a post-2006 retiree from Indian Oil Corporation Ltd. (IOC), the leading Fortune 500 company of India as well as one of the earliest Government of India Undertakings to be accorded the Maharatne status. IOC is expected to be a role model for other employers in government sector. Today, there are nearly 7000 post-2006 retirees that suffer the injustice I am going to narrate. I joined the company in 1978.
IOC signed MOU in 1987 with Indian Oil Officers Association and thereafter with other 21 collectives whereby employees made (1) direct contributions ranging between 2% to 5% of their salary and (2) indirect contributions through surrender of their uniforms, stitching charges, washing allowances, tea allowances, employment for dependents, etc. to create a pension trust whereby the members on superannuation will receive 40% of their last salary as pension. These MOU were based on the deed that was approved by Income tax authorities. This was a self generated fund solely by the contributions made by the employees.
The MOU contained a provision whereby if the Govt. of India introduced any pension scheme in future, the SABF pension will continue additionally.
It may be noted that IOC already had the facility of contributory provident fund and post-retirement medical scheme (PRMS) for its employees prior to signing of this MOU.
The Department of Public Enterprises (DPE) recommended introduction of a pension scheme for post-2006 retirees for the central PSEs that did not have a pension scheme of their own. DPE guided pension scheme stipulated that the employees on superannuation will receive 30% of salary (including DA) as pension. IOC availed this opportunity to retro-terminate the SABF pension scheme on March 31, 2011 with effect from Dec. 31, 2006.
This implied that post-2006 retirees will now receive their pension on the basis of their salary frozen on Dec. 31, 2006 irrespective of their date of superannuation and inflation.
IOC not only reduced the salary for the purpose of computation of pension, but also retro stopped the indirect contributions and retro terminated the PRMS with effect from Jan. 1, 2007. Consequently, pension of post-2006 retirees got reduced as compared to what was admissible under formula already in operation between Jan. 1, 2003 to March 31, 2011.
Recovery from already settled annuity of those retired between Jan. 1, 2007 to March 31, 2011 was effected from new scheme account. On March 31, 2011, the indirect contributions were unilaterally retro stopped with effect from Jan. 1, 2007 and amount already received during the period Jan. 1, 2007 to March 31, 2011 (including of already retired) utilized by the IOC to reduce its liability.
From 1983 (much before SABF introduction) medical expenses of retirees (retired upto March 31, 2011) were reimbursed by management in ongoing old PRMS scheme. To shed liability, IOC terminated this scheme as well as its contributions to provident fund from retro date of Jan. 1, 2007 and burdened 30% retirement benefits resulting in a vastly reduced DPE guided pension for post-2006 retirees.
This unilateral termination of SABF pension and making it effective on the frozen salary of Dec. 31, 2006 have caused grave hardship to all the post-2006 retirees, because new salary scales became operational with effect from Jan. 1, 2007. Post-2006 retirees were now getting their total pension (including the DPE guided pension) only in the range of nearly 12-13% of their total salary. This payment is in gross violation of the provisions contained in the MOU as well as spirit behind the DPE guided pension scheme.
You can now visualize how a MOU custodian became the owner of the entire trust collections. IOC became so powerful that they retro-terminated this MOU in 2011 and made it operational on the frozen salary of Dec. 31, 2006. Post-2016 retirees are likely to be hit more severely when the new salary structures will be operational with effect from Jan. 1, 2017. Because, even post-2016 retirees will continue to get their pension on their frozen salary of Dec. 31, 2006. IOC neither restored our uniforms and other indirect perks nor returned back our funds with interest with effect from Jan.1, 2007.
Documents exist with IOC whereby it will be revealed that the scheme was always viable and the present scheme was made operational with several deeds of variations and benefitted the most who superannuated before 2002. This benefitted most of the signatories of the SABF MOU.
It may be noted that the practices of IOC are in stark contrast to what has been adopted by other MoPNG PSUs such as ONGC and GAIL where the retirees receive much higher pensions in accordance with SABF signed by them with their employees.
Further, by doing so, IOC has virtually created a split between pre-2007 retirees and post-2006 retirees where pre-2007 retirees are being treated much differently than post-2006 retirees.
Whereas pre-2007 retirees get their pensions as per SABF scheme, post-2006 retirees have been handed over a much reduced pension based on their frozen salary as on Dec. 31, 2006.
Post-2006 retirees have been unnecessarily harassed on account of their salary revisions with effect from Jan. 1, 2007. And, this harassment will be felt much more by post-2016 retirees when revised salary scales will come into force from Jan. 1, 2017.
Later, other pre-2007 were benefitted by infusing 1.5% of PBT through the connivance of retirees association with the IOC management. Post-2006 retirees really need your support so that fruits of their savings are made available to them.
It is suspected that post-2006 retirees will continue to suffer even in revised EPS pensions.
We have contributed towards the trust for a much longer period and yet have to feel cheated through the acts of our employer. This is against the well settled principle of natural justice.
We call for necessary action by the concerned authorities to restore our pension.
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