Joint Memorandum on Pending Issues of Bank Pensioners & Retirees

We wish to introduce ourselves as a Joint Coordination of Coordination of Bank Pensioners’ and Retirees Organisations (CBPRO, having 5 constituents viz Federation of SBI Pensioners’ Organisations, AIBPARC, RBONC, AIRBEA and FORBE) and AIBRF representing 100% of the Bank Pensioners & Retirees numbering about five lacs. We have been taking up the grievances of Bank Pensioners & Retirees with Indian Banks’ Association and Department of Financial Services, Ministry of Finance, Govt of India.  We are committed to the cause of Bank Pensioners & Retirees so as to bring about happiness and cheers on their faces in the evening of their life.  The following issues remain unresolved despite our several requests, reminders and personal meetings with the competent authorities.  We therefore request you to help us in getting these matters resolved early.

1. Uniform 30% Family Pension :

a.    Family Pension in Banks is payable @ 30%, 20% and 15% of last drawn pay where lower percentage being assigned to higher pay with a specified ceiling on the amount of Basic Family Pension.

b.    The above mythology effectively resulted in the Family Pension working out to nearly 7 to 10% of last drawn pay restricting Basic Family Pension to a meagre sum of Rs. 4,000/- to Rs. 14000/- after attainment of notional age of 65 years by the deceased employee or 7 years from the date of death whichever is earlier.

c.    Government and RBI Pensioners are paid Family Pension uniformly at 30% of last drawn pay without any ceiling.

d.    Un-affordability of proposed improvement in Family Pension is being arbitrarily quoted to deny the benefit despite there being adequate provision made during the service tenure of the employee by the Bank for payment of full Pension to the employee. Thus Family Pension being lesser than the Pension of the Employee, it would involve a negative cost to the Pension Fund.  Hence the contention of IBA/Government about cost consideration defies logical, economic sense, rationality and above all humane consideration.

e.    Family Pension being a highly emotive issue needs to be resolved urgently as assured at the time of last Wage Settlement vide second issue listed in Record Note dated 25^th May, 2015.

2.     Updation of Pension:

a.    Pension Regulation 35(1) provided for Updation of Basic Pension and Additional Pension in respect of those Employees/Officers who retired between 01.01.1986 and 31.10.1987 and at the time of introduction of Pension Scheme in Banks during 1995-96 it was so given to them as they alone were eligible for Updation at that stage.

b.    Pension Regulation 35(1) was amended vide Gazette Notification No:9 dated 01.03.2003 providing for Updation of Basic Pension and Additional Pension wherever applicable thus making it an open-ended scheme to provide the benefit of Pension Updation to all Retirees who become eligible on periodical revision of Pay through Industry level Wage Settlements.

c.    IBA/Government has been denying the benefit of Pension Updation despite clear provision in Pension Regulation 35(1) quoting cost consideration.

d.    Pension is a Deferred Wage and a property under Articles 19(1) (f) and 31(1) of Constitution of India and hence a statutory obligation of the Banks which are State within the meaning of Article 12 of Constituents of India.

e.    Pension including updated Pension and Family Pension become payable out of Pension Fund.  The present Pension Fund of the Public Sector Banks including State Bank of India is quite robust and healthy at more than Rs. 300,000 crores  with potential to afford payment of 3 to 4 times of present disbursements on account of Pension and Family Pension.

f.        In Banks Pension is paid out of Pension Fund which is created by the surrender of the mandated management contribution of Provident fund by the Bank Employees and Officers during their service.  Pension is not paid out of profits but of that fund so created.  Hence payments so to be made as per Pension Regulations will not affect the Balance Sheet of the Banks. Provision, if any, for Pension Fund is a charge on Profit & Loss A/c and hence is not payable out of net profit of the Banks.  Net profit has to be arrived at only after making all provisions including for payment of Salary and Pension which are statutory in nature. Statutory payments cannot otherwise also be denied for cost considerations.

g.    Banks have introduced New Pension Scheme for those employees who have been recruited after April 2010 and there is separate Fund created for the same.  This limits the number of Pensioners under Old Pension Scheme and even this number is subject to reduction with every passing year.  Ultimately when all Pensioners die their Pension Fund which is held in Trust shall remain hugely underutilised.  This further strengthens our contention for improvement in pension by periodical updation so that the Pension Fund of the Retired Employees is put to proper and intended use.

3. 100% DA Neutralisation:

a.    Government of India introduced 100% DA Neutralisation in lieu of tapering DA vide 5^th pay Commission (1996). Subsequently 100% DA neutralisation was extended to all Pensioners of the Banks except those who retired before 01.11.2002.  It was on account of wrong interpretation of the provisions of Bipartite Settlement/Joint Note signed during 2005 between IBA and Unions/Associations.

b.    Aggrieved Employees approached the Hon’ble High Courts and were awarded relief but Management of United Bank of India filed SLP in Hon’ble Supreme Court.  During the final hearing and finding merits in the arguments of the Employees, the Hon’ble Judges of Supreme Court observed that they had already passed an adverse order in a similar case and hence reversal of that order could be done only by a larger Bench.  Alternatively the Employees in whose case the adverse order was passed should file a review petition which could be tagged with the case of United Bank after condoning the delay.  Accordingly the review petitions were filed, delay condoned and petitions tagged with the case of United Bank of India.  The Hon’ble Supreme Court yet again passed an adverse order without any justification merely by stating that since earlier appeals of the employees were dismissed, the appeal of United Bank Management is allowed.

The Judgement of the Hon’ble Supreme Court came as a bolt from the blue to the employees.

c.    The Hon’ble Supreme Court based its Judgement on a misplaced ground of arithmetic consideration by stating that the improvement in DA for Pre-November, 2002 Retirees would result in exceeding the Wage Revision load factor of Rs1288 crores and thus may warrant a corresponding downward revision of Basic Pay structure of the employees and Officers which were covered by Wage Revision settlement made effective from 01.11.2002. This was completely wrong consideration as DA did not form part of the components of load factor. The arithmetical error committed by the Hon’ble Supreme Court needs correction.

d.    100% DA Neutralisation to similarlily placed Pensioners is made available to the Pensioners of RBI and LIC of India. Hence denial to a small section of Bank Pensioners is beyond reasonable comprehension.

e.    Compelling Senior Citizens to knock the doors of judiciary to realise their legitimate claims and aspirations is against the spirit of National Litigation Policy of the Government.

4. Pension for those who Resigned after completing 20 years of Service:

a.    IBA had been denying Pension option to those who had resigned from the service of the Bank after completing minimum qualifying Pensionable service in the Bank. Aggrieved resignees sought judicial remedy and ultimately in case of the Employees of Vijaya Bank the Hon’ble Supreme Court ordered extension of the benefit of Pension option to the petitioners who were allowed to opt for Pension.

b.    IBA has refused to extend the benefit of the order of the Hon’ble Supreme Court to similarly placed persons in Vijaya Bank and also in other Banks. Expecting every individual to go to Supreme Court and struggle for several years for final judgement is unfair and also against the spirit of Litigation Policy of the Government.

c.    IBA was kind enough to extend the similar benefit to all the compulsorily retired people after few of the compulsorily retired people got favourable judgement from the Hon’ble Supreme Court.  Hence denial of Pension option to resignees is unfair and illogical.

5. National Litigation Policy:

The policy is a good initiative of Government of India.  But various instrumentalities of the Government including Public Sector Banks which are State within the meaning of Article 12 of the Constitution of India have been driving their Employees/Pensioners to seek legal remedy on settled issues, thereby defying the spirit of Nation Litigation Policy.  Such a situation causes a huge drain on the resources (judicial) of the Government while forcing avoidable financial burden on the Employees/Pensioners.  It is requested to ensure creation of a mechanism for resolving the anomalies created by wrong interpretation of the settlements or the provisions of settlements or wrong implementation and interpretation of various Regulations despite their being subordinate legislation – statutory in nature.

6. Demand for Negotiating rights with IBA:

          

 It is requested to ensure creation of a mechanism for resolving the anomalies created by wrong interpretation of the settlements or the provisions of settlements or wrong implementation and interpretation of various Regulations despite their being subordinate legislation – statutory in nature. It will also help the Retirees to strive for further improvements wherever necessary.

To obviate and resolve such anomalous situations, we demand the following:

i)        The Organisations of Bank Pensioners and Retirees should be provided a structured forum to discuss their issues with Indian Banks’ Association.

ii)       Anomaly Resolution Committee should be constituted to look into the grievances of Bank Pensioners and Retirees.

We also demand that IBA calls us for formal discussion / negotiations for resolution of Pending issues of Bank Pensioners & Retirees before sighing of 11^th BPS with the constituents of UFBU.

7:   Reckoning of Special Allowance for Pension & Gratuity:

Last wage settlement dated 25^th May, 2015 provided for introduction of a new special allowance carrying DA as applicable on Basic Pay. However the settlement also provided for a negative clause that special allowance shall not be considered for calculation of superannuation benefit viz Pension & Gratuity. This negative clause is illegal and cannot be used to the detriment of Retirees. Not reckoning special allowance for the purpose of calculating superannuation benefit is violative of Pension regulation 2 (s)(a)(ii) which provides that all allowances counted for the purpose of making contribution to the provident fund and for the payment of dearness allowance shall be included as a component of pay. It is pertinent to mention hear that provident fund not being contributory does not constitute a benefit to an employee. It leads the payment of dearness allowance as the only benefit available to employees on special allowance as in case of Basic Pay. Under such circumstances a negative clause in the 10^th Bipartite Settlement to the effect that special allowance will attract DA but shall not reckon for calculation of superannuation benefits is illegal and contrary to the provision of Pension Regulation 2(s)(a)(ii). The only purpose of this negative clause was to take away the right conferred under pension regulation 2(s)(a)(ii). It was held by the Hon’ble Supreme Court in case of Pension Civil No:5525 of 2012 filed by Bank of Baroda that by signing a settlement or a joint note there is  no estoppel  as against the enforcement of statutory provisions(Pension Regulations) which could not have been tinkered with in an  arbitrary manner. Extending the same rule of law, the negative clause in the 10^th Bipartite settlement/Joint Note about not reckoning special allowance for calculating superannuation benefit is violative of existing pension regulations and hence arbitrary and illegal.

     

           8    IBA’s Medical Insurance Scheme:

In pursuance of the directives issued by Dept of Financial Services, Govt of India on 24.02.2012, IBA was expected to evolve a Medical Insurance Scheme both for Serving and Retired employees. However IBA evolved a Medical Insurance Scheme for Serving employees providing for its cost to be borne by the Banks where as in case of Retired employees the premium was passed on to the Retirees though there was no such directive in the government communication. The medical insurance premium was quite reasonable and also subsidized by many Banks initially but with every successive renewal the premium was increased and subsidy from Banks disappeared. The premium amount which was Rs7500/- in the first year has gone beyond Rs90,000/- for the current year. The Retirees and Pensioners are rendered helpless to suffer injustice and cannot also go back to their own individual medical insurance policy discontinued after introduction of IBA scheme as they have crossed the minimum prescribed age for obtaining fresh medical insurance cover.

There is urgent need for Banks to bear the entire medical insurance scheme premium charged on IBAs Medical Insurance Scheme and also wave such premium from levy of GST so as to reduce the burden on Banks.

          9.    Effective Date of Gratuity Enhancement:

The recommendations of 7^th Central Pay Commission to enhance Gratuity from Rs10 lacs to Rs20 lacs for Central Government Employees was accepted and implemented wef:01.01.2016 whereas the payment of gratuity act was amended at a later date and enhanced amount of Rs20 lacs was made effective from 29.03.2018 for the employees other than those working in Central Government. It astonishes that the Ministry of Labour & Employment has notified 29.03.2018 as the date of effect of enhanced gratuity despite a clear legal opinion from Ministry of Law & Justice, Dept of Legal Affairs that enhancement of gratuity and its admissibility/eligibility from particular date are issues relatable to social beneficial legislation and are to be construed liberally. It was further opined that according parity for quantum as well as effective date for employees governed by Payment of Gratuity Act 1972 vis a vis Central Government Employees has rationale and reasonable nexus and hence there appears to be no legal objection if said parity is allowed by Ministry of Labour & Employment. In this background the decision of the government to make the enhancement effective from 29.03.2018 thus hurting the interest of Senior Citizens is beyond comprehension.

There are other pending issues agitating the minds of Bank Pensioners and Retirees and the same are being actively taken up with Indian Banks’ Association for early resolution.  Such issues include grant of stagnation increment to those who retired between 01.11.2012 to 30.04.2015 in terms of 10^th Bipartite settlement/Joint Note dated 25.05.2015 as has been allowed to the employees and officers of State Bank of India vide circular dated 18.07.2018 issued by CGM(HR) of State Bank of India, Corporate Office, Mumbai.

We request you to extend necessary help for resolution of these issues by Indian Banks Association/ Dept of Financial Services, Ministry of Finance, Govt of India at the earliest.

                  

(A.Ramesh Babu)       (K.V. Acharya)                     (S.C. Jain)

             Joint Conveners, CBPRO                General Secretary, AIBRF

An open letter to AIPNBRF

                                                                                                             Dated: 28th October 2018
To
The General Secretary,
AIPNBRF, Central Office,
3/425, Pathan Pura ,
Shahdara DELHI-110031

Sir,

Regarding:-  1616-1684, Arrears of Commutation as per the Judgements of  Karnataka High Court & Supreme Court of India.

Please take  reference  to AIBRF circular letter no Ref:201/110 dated  27.10.2018, vide which core issues of the retirees have been identified as below:-
1 .Family Pension
2. Pension Updation.
3. 100%DA Neutralization.
4. Full Reimbursement of Medical Insurance Premium to Retirees.
5. Reckoning of Special Allowance for Superannuation Benefits.
6. IBA should hold talks with the Coordination Body of Bank Retirees.

From the above, I find that issue of payment of arrears of Commutation, in 1616-1684 pension fixation case, has been dropped from the agenda of the AIBRF.

I understand that your goodself had taken up the matter with the management of the Punjab National Bank. I may kindly be allowed to present the issue according to my understanding.

Following are the extracts of judgements of Karnataka High Court & Supreme Court of India.

Operative part  of Karnataka High Court  Judgement Dated 21.04.2011
# 13………..…..bank shall pay the differential amount of pension and commutation value of pension to the petitioners on that basis,within a period of eight weeks, if not earlier and in the event of failure to make the payment as above, the banks shall be liable to pay interest at the rate of 10% on the said amounts till the date of payment.

Operative part of SC Judgement Dated 13.02.2018
# 34  Thus, we set aside the judgment rendered by the High Court of Delhi and affirm that of High Courts of Karnataka at Bangalore and the High Court of Madras. The appeals filed by the Banks are dismissed and the appeal filed by the Association is allowed. Resultantly, let the amount which was due and payable be paid with 9% interest, be calculated and paid within four months from today.

Punjab National Bank , has paid the differential amount of pension & DA with interest @ 9%
( though calculation sheets have not been provided so far to the concerned pensioners.) but still have not paid the commutation value of ⅓ of differential of pension with interest @9% .

As per the orders of the court, following can be the components of the  differential amount of pension and commutation value of pension.

1. Differential amount of pension + DA  (for the period from the date of retirement upto     
    30.04.2005) with interest @ 9% upto the date of payment.
2. Commutation value of ⅓ of differential of pension with interest @9%
3. Recovery of ⅓ of differential of pension for the period from the date of retirement
     upto 30.06.2003. [Regulation 41(6)]

Points mentioned at SN. 1 & 2 are clear and needs no clarification.

To understand the contention at SN. 3, I wish to draw your kind attention towards the relevant Pension regulations.(Regulation 41)

# 41(2) An employee shall indicate the fraction of pension, which he desires to commute, and may either indicate the maximum limit of one-third pension or such lower limit, as he may desire to commute.

# 41(4) Notes (2) An employee who had commuted the admissible portion of pension is entitled to have the commuted portion of the pension restored after the expiry of a period of fifteen years from the date of commutation.

# 41(4)  Notes (6) The commutation of pension shall become absolute in the case of an employee,  (a) retiring on superannuation or voluntary retirement who submits an application for commutation of pension before the date of retirement, on the date following the date of retirement:

 # 41(6) An applicant who is authorised a superannuation pension, voluntary retirement pension, premature retirement pension, compulsory retirement pension, invalid pension or
compassionate allowance shall be eligible to commute a fraction of his pension under these
regulations.
Provided that on and from 1.7.2003, in case of an applicant in whose case the commuted
value of pension becomes payable on the day following the date of his retirement or from the
date from which the commutation becomes absolute, the reduction in the amount of pension on account of commutation shall become operative from its inception. Where, however, payment of commuted value of pension could not be made within the first month after the date of retirement or within the first month after the date when the commutation becomes absolute as the case may be, the difference between the normal monthly pension and the commuted pension shall be paid for the period between the date on which commutation becomes absolute and the date preceding the date on which commuted value of pension is deemed to have been paid.
(AMENDMENT NOTIFIED IN GAZETTE OF GOVERNMENT OF INDIA DATED 24.7.2004)

From the regulation 41 of pension regulations the following emerges.

1.  An employee shall indicate the fraction of pension, {Regulation 41(2)}. Usually employees commute ⅓ of the basic pension. As such there was no need to give fresh option for commutation of ⅓ of the differential pension.
2. The commutation of pension shall become absolute,........, on the date following the date of retirement.{ Regulation 41(4)  Notes (6) }
3. Commuted portion of the pension restored after the expiry of a period of fifteen years from the date of commutation. {Regulation 41(4) Notes (2)}
4. The reduction in the amount of pension on account of commutation shall become operative from its inception. {Regulation 41(6)}
5. Where, however, payment of commuted value of pension could not be made within the first month after the date of retirement or within the first month after the date when the commutation becomes absolute as the case may be, the difference between the normal monthly pension and the commuted pension shall be paid for the period between the date on which commutation becomes absolute and the date preceding the date on which commuted value of pension is deemed to have been paid. {Regulation 41(6), effective from 01.07.2003}

In all the present cases the commutation became absolute on the date following the date of retirement, well before 01.11.2002.
As such , the commuted portion of the pension, in all cases, stands restored after the expiry of fifteen years from the date of commutation, i.e. well before the payment of arrears in April 2018.
As per regulation 41(6), effective from 01.07.2003, the pensioner is to be paid the difference between the normal monthly pension and the commuted pension,  for the period between the date on which commutation becomes absolute (date following the date of retirement) and the date preceding the date on which commuted value of pension is deemed to have been paid ( April 2018). As per this regulation,  w.e.f.  01.07.2003,  recovery of ⅓ of differential of pension stands neutralized by an equal  payment by the bank ,for late payment of commutation value. In all the present cases, the period of 15 years, from the date commutation had become absolute , has since passed well before the date of payment of the arrears.

You are requested to kindly take up with the management of Punjab National Bank & the central leadership of AIBRF, for resolution of the issue.

Thanks & regards,

Arvind Mangla

Pension - Special Allowance (10th Bipartite Settlement)

Whereas a message is circulating in the social media (whats-app) reading as under:-

“V. Raghunath Sharma started this petition to Ministry of Finance and Indian Bankers Association.
I refer to the landmark judgment of the supreme court in special leave petition No 20661-20668/2012 .where in the “Supreme court upholds the definition of Pay as per Bank employees’ pension regulation 1995 for calculation of pension in the judgment pronounced on 13-02-2018 vide canara bank v/s Savitri Venugopal and others.
Among other things the court  has observed the following which are relevant to the bank employees who retired after November 2012. :
1)  There cannot be two pay scales  1) one for the purposes of calculation of salary and   2)   the other for calculation of pension. 
In other words the pay taken for the calculation of salary should be reckoned for the purpose of pension also..........”

This judgement relates to pensioners retired between 01-04-1998 and 30.04.2005. Please refer AICBRF circular dated 22.05.2018, for ready reference. The above message is raising false hopes in the minds of post Nov’2012 retirees.  let’s examine the issue threadbare. It’s genesis lies in 10th Bipartite Settlement / joint note for officers, both dated 25.05.2015, of which relevant portions reads as under.

‘Quote’ 
Tenth Bipartite Settlement :(Agreement dated 25.05.2015)
# 9. Special Allowance
With effect from 1.11.2012, workmen employees shall be paid Special Allowance at 7.75% of the Basic pay with applicable DA thereon.
Note : The Special Allowance with applicable DA thereon shall not be reckoned for superannuation benefits viz., pension including contribution to NPS, PF & Gratuity.

Joint Note for Officers Dated 25.05.2015
# 6. Special Allowance (w.e.f. 1.11.2012)
With effect from 1.11.2012, officers shall be paid Special Allowance as under:
Scale I-III - 7.75% of Basic Pay + applicable Dearness Allowance thereon
Scale IV-V - 10% of Basic Pay + applicable Dearness Allowance thereon
Scale VI-VII- 11% of Basic Pay + applicable Dearness Allowance thereon
Note : The special allowance with applicable DA thereon shall not be reckoned for superannuation benefits, viz., pension including NPS, PF and Gratuity

This special allowance was “carved” out of basic pay portion and given a new nomenclature with intention to deprive / curtail the pension benefits of the pensioners ( pensioners are not a party to negotiated settlements, issues of pensioners gets  sacrificed , in order to secure a better deal for the serving employees) This is not the first time that UFBU had agreed with the management to curtail the benefits of the retirees, details of other instances  are as follows.

1.  Seventh Bipartite Settlement :(Agreement dated 27.03.2000)
# 16. Pension
In relation to an employee who retires or dies while in service on or after the 1st day of April, 1998 ‘Pay’ for the purpose of Pension shall be the aggregate of the pay drawn by the member of award staff in terms of the sixth Bipartite Settlement dated 14th, February, 1995 and the dearness allowance thereon calculated upto index number 1616 points in All India Average Consumer Price Index for Industrial Workers in the series 1960=100. This shall be subject to the necessary amendments to be made to the relevant provisions of Bank (Employees) Pension Regulations, 1995.

By the above settlement , the pension of retirees , retiring w.e.f. 01.04.1998 was reduced  by app.15%. This anomaly was corrected under Eighth Bipartite w.e.f. 01.05.2005, but arrears were not given. Retirees had to fight a long legal battle ending with Supreme Court of India orders dated 13.02.2018,  and finally  partial arrears were  released by the banks in April / May 2018..

2. Under the following retrograde clause (with retrospective effect) of Ninth Bipartite Settlement (Agreement dated 27.04.2010), 100% DA Neutralization was denied for pensioners who retired  prior to Nov’2002.

Ninth Bipartite Settlement; (Agreement dated 27.04.2010)
# 3. Further to Clause 7(2) of the Bipartite Settlement dated 2nd June 2005, it is agreed between the parties as under:
(i) On and from 1.5.2005, in the case of employees who retired during the period 1.4.1998 to 31.10.2002, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 1684 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below:

Scale of Basic Pension per month	The rate of Dearness Relief payable as a percentage of Basic Pension
(i) Upto Rs. 3550	0.24 percent
(ii) Rs.3551 to Rs.5650	0.24 percent of Rs.3550 plus 0.20 percent of the  basic pension  in excess of Rs.3550
(iii) Rs.5651 to Rs.6010	0.24 percent of Rs.3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent of basic pension in excess  of Rs. 5650.
(iv) Above Rs.6010	0.24 percent of Rs. 3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent  difference between Rs.5650 and Rs.6010 plus 0.06 percent of basic pension in excess of Rs.6010.

Whereas vide agreement dated 02.05.2005 ( Eighth Bipartite Settlement)  Concept of 100% DA neutralization for all pay levels ( subordinate / clerical / officer ) was introduced with effect from 1st February 2005, but vide agreement dated 27/03/2010 ( Ninth Bipartite Settlement), 100% DA Neutralization was denied, with retrospective effect , for pensioners who retired  prior to Nov’2002,  thus creating two classes amongst the bank pensioners.

Class 1.  Bank pensioners getting 100% DA Neutralization
Class 2.  Pre Nov'2002 bank retirees pensioners getting partial DA Neutralization

Despite established case law, in the famous  judgement of Supreme Court of India in  D.S. Nakara Vs Union of India, that two classes amongst the pensioner can not be created, retirees lost the case in Supreme Court of India.

In the 100% DA Neutralization case Kolkata High Court in the orders dated 26.09.2016, had observed -

“# 9. As rightly argued by Mr. Lakshmi Kumar Gupta the learned Counsel appearing for the retired employees it is impermissible to make any classification between retirees depending on the date on which they retire. In the case of D. S. Nakara (supra) the Supreme Court observed that the Government was perfectly justified in introducing the pension scheme as it was long overdue but the Court found that there was no justification for arbitrarily selecting two criteria for eligibility of the benefits of the scheme dividing the pensioners, all of whom would be on either side of the cut-off specified date. Mr. Gupta submitted that the observations in D. S. Nakara’ case (supra) are applicable to the facts and circumstances in the present case. He has also drawn our attention to the judgment in Kallakkurichi Taluk Retired Officials Association, Tamil Nadu & Ors and vs. State of Tamil Nadu reported in (2013) 2 SCC 772 where the Supreme Court has frowned upon the State Government treating pensioners differently with respect to disbursement of dearness relief.

# 15………..There does not appear to be any objective sought to be achieved by the classification of retired employees on the basis of their date of retirement. The retirees of post-November, 2002 have been granted dearness relief which allows for 100 per cent neutralization. However, those who have retired between 1st April, 1998 and 31st October, 2002 have been denied this relief.”

But Supreme Court of India did not find the merits in the judgement of Kolkata High Court and retirees lost the case in SCI.

My idea of detailing the above is to emphasize that, the principles of natural justice ,case laws etc. etc. does not matter, what matters is the wisdom of all the concerned, starting from UFBU, bank management, govt. bureaucracy and lastly of courts.

UFBU has failed to recognize that present serving employees are the future retirees and retirees interests also needs to be protected, rather UFBU had been instrumental in curtailing the benefits of retirees, for the gains of the serving employees.

Bank managements needs to adopt humane approach  towards retirees issues, be it pension or health care etc. Most of the banks have not released the arrears of commutation to the pensioners in terms of Supreme Court of India orders dated 13.02.2018, mentioned supra above, despite clear cut provisions in the pension regulations ( regulation 41.6). Now the concerned retirees, mostly above the age of 75 years ( retired prior to Nov’2002.), will have either to approach the courts, or forgo the arrears.

Indian bureaucracy still has the mindset of occupier state, British Raj, even after 70 years of independence. They are still strangers to the concept of welfare state and take sadistic pleasure in denying the rightful benefits. They should have a humane and equitable approach while framing or amending pension regulations of bank retirees, as they protect their own pension rights and benefits.

Going back to the issue of pension on Special Allowance,  which was conceptualized in the 10th bipartite, is concerned, it’s a long battle, which may have to be fought by the concerned retirees as no help will be forthcoming from any quarter. They will be lucky to get their dues in their lifetime.

Disclaimer: The sole purpose of this blog is to create awareness on the subject and must not be used as a guide for taking or recommending any action or decision. A reader must do his own research and seek professional advice if he intends to take any action or decision in the matters covered in this blog.

" Dignity of Bank Retirees..? "

Presently resolution of two major  issues concerning most of the bank retirees is not in sight , despite all out  efforts of the various bank retirees organizations.

1. 100% DA Neutralization for pre Nov’2002 retirees.
2. Pension updation along with periodic salary revision of the serving bank employees.

So far either of the following two routes for resolution of the bank retirees issues are available.

1. Negotiated settlement with the management of the banks through IBA. Here IBA is not ready  to talk with bank retirees organizations, under the plea, that it (IBA) does not have mandate to talk on pensioners issues, though every Bipartite Settlement (after signing of agreement for pension in 1993), is having a clause which  affects the bank pensioners. Secondly, as pensioners are not a party to negotiated settlements, issues of pensioners gets  sacrificed , in order to secure a better deal for the serving employees.

2. Through the intervention of the courts. This route is a very lengthy process. It usually takes  5 - 10 years, before the issues are finally adjudicated in the Supreme Court of India. Though many issues such as 5 years notional service for EVRS pensioners, 1616-1684 pension revision for pre Nov’2002 pensioners, pension for CRS and  revision of pension for technical officers etc. have been got resolved through court intervention, this process has it’s own pitfalls, which have been highlighted in the recent case of 100% DA Neutralization case, which the pensioners lost in SCI.

A third untested democratic route for resolution of the issues of bank retirees can be tried i.e. amendment of Pension Regulations through Private Member's Bill, in parliament. For this route retirees will have to create an organizational structure to systematically deal the various aspects involved.

1. Drafting of proposed bill for amendment of the Pension Regulations .

2. Identifying & convincing a Member of Parliament to move the concerned Private Member’s Bill in either house of the Parliament. Provide all legal support and inputs to the concerned MP, required for discussion in the Parliament , through various stages of introduction & passage of the bill. Identifying & convincing other MP’s of all political parties to support the bill in the Parliament, during discussion for passage of the bill.

3. Consolidating all the inputs , legal aspects etc in the booklet form for distribution amongst  all the MP’s.

4. Create a watchdog body for keeping watch on tabling of amendments to pension regulations in either of  the house of the parliament under section 19(4) of  BANKING COMPANIES (ACQUISITION AND TRANSFER OF UNDERTAKINGS) ACT,1970, and to take suitable action , with the help of friendly MP’s, for dropping of un-favourable amendments to the pension regulations. A continuous liaison with the friendly  MP’s is must.

5. Commit full active political support of bank retirees for the MP’s / political party , instrumental in resolution of the above major two issues of the bank retirees.

6. Create separate fund for expenses of legal support, out of pocket expenses etc towards the cause.

Bipartite Agreements / Settlements affecting Bank Pensioners

Following are the excerpts of various bipartite agreements / settlements between UFBU & IBA on the issues relating to pensioners

SEVENTH BIPARTITE SETTLEMENT :(Agreement dated 27.03.2000) 

# 16. Pension In relation to an employee who retires or dies while in service on or after the 1st day of April, 1998 ‘Pay’ for the purpose of Pension shall be the aggregate of the pay drawn by the member of award staff in terms of the sixth Bipartite Settlement dated 14th, February, 1995 and the dearness allowance thereon calculated upto index number 1616 points in All India Average Consumer Price Index for Industrial Workers in the series 1960=100. This shall be subject to the necessary amendments to be made to the relevant provisions of Bank (Employees) Pension Regulations, 1995.

 EIGHTH BIPARTITE SETTLEMENT :(Agreement dated 02.06.2005) 

# 16. Pension (in Banks other than State Bank of India) In respect of an employee other than the employee in State Bank of India, who is a member of the Pension Fund, who retires or dies while in service or otherwise ceases to be in employment on or after the 1st May 2005, ‘Pay’ for the purpose of pension shall be the pay as in clause 6 of this settlement. This shall be subject to the necessary amendments to be made to the relevant provisions of Bank (Employees’) Pension Regulations, 1995. Note: The Bank (Employees’) Pension Regulations, 1995 does not apply to the employees of State Bank of India. 

 NINTH BIPARTITE SETTLEMENT :(Agreement dated 27.04.2010)

# 16. Pension (in Banks other than State Bank of India) 

 1. It is agreed between the parties that the terms of the Bank Employees‟ Pension Regulations, 1995 dated 29th September 1995 / 26th March 1996 shall not apply to the employees who join the services of Banks on or after 1st April 2010; and they shall be covered by a Defined Contributory Pension Scheme, which shall be governed by the provision of the Contributory Pension Scheme introduced for employees of the Central Government w.e.f. 1st January 2004, and as modified from time to time. Necessary amendments to the relevant provisions of the Bank Employees‟ Pension Regulations, 1995 dated 29th September 1995 / 26th March 1996 shall be carried out following the procedure in this regard. 

 2. Further to Clause 6 of the Bipartite Settlement dated 2nd June 2005, it is agreed between the parties as under: 16 (i) With effect from 1st May 2005, the pension of employees who retired or died while in service during the period 1st April 1998 to 31st October 2002 will be re-fixed based on the definition of „Pay‟ as defined in Clause 6(ii) of the Bipartite Settlement dated 27th March 2000. No arrears of pension and commuted value of pension will be payable on account of such re-fixing of pension. (ii) With effect from 1st May 2005, the pension of employees who retired or died while in service during the period 1st November 2002 to 30th April 2005 will be re-fixed based on the definition of „Pay‟ as defined in Clause 6 of the Bipartite Settlement dated 2nd June 2005. No arrears of pension or commuted value of pension will be payable on account of such re-fixation of pension.

 (Under the following retrograde clause ( with retrospective effect) of Ninth Bipartite Settlement (Agreement dated 27.04.2010), 100% DA Neutralization was denied for pensioners who retired prior to Nov’2002.) 

# 3. Further to Clause 7(2) of the Bipartite Settlement dated 2nd June 2005, it is agreed between the parties as under: (i) On and from 1.5.2005, in the case of employees who retired during the period 1.4.1998 to 31.10.2002, dearness relief shall be payable for every rise or be recoverable for every fall, as the case may be, of every 4 points over 1684 points in the quarterly average of the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Such increase or decrease in dearness relief for every said four points shall be calculated in the manner given below:

Scale of Basic Pension per month	The rate of Dearness Relief payable as a percentage of Basic Pension
(i) Upto Rs. 3550	0.24 percent
(ii) Rs.3551 to Rs.5650	0.24 percent of Rs.3550 plus 0.20 percent of the basic pension in excess of Rs.3550
(iii) Rs.5651 to Rs.6010	0.24 percent of Rs.3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent of basic pension in excess of Rs. 5650.
(iv) Above Rs.6010	0.24 percent of Rs. 3550 plus 0.20 percent of the difference between Rs.3550 and Rs.5650 plus 0.12 percent  difference between Rs.5650 and Rs.6010 plus 0.06 percent of basic pension in excess of Rs.6010

TENTH BIPARTITE SETTLEMENT :(Agreement dated 25.05.2015)

# 9. Special Allowance

With effect from 1.11.2012, workmen employees shall be paid Special Allowance at 7.75% of the Basic pay with applicable DA thereon.

Note : The Special Allowance with applicable DA thereon shall not be reckoned for superannuation benefits viz., pension including contribution to NPS, PF & Gratuity.

# 15. Pension (including State Bank of India)

With effect from 1st November 2012, the Pay as defined under Clause 6 of this Settlement and drawn by the employees who are members of the Pension Fund shall be taken into consideration for the purpose of calculation of pension as per the Pension Fund Rules/ Regulations in force.

Note: Employees in service of the Banks as on 1st November 2012 and who have retired thereafter but before 25th May 2015 and who had opted for commutation of pension will have an option not to claim incremental commutation on revised basic pension.

# 15(A). Pension for Part-time Employees

With effect from 1st November 2012, for the purpose of calculating the amount of pension in respect of permanent part time employees in scale wages who are covered by the Pension Scheme, their actual service shall be reckoned for qualifying service and not pro rata. The actual service/qualifying service shall be calculated from the date of recruitment/appointment as permanent part time employee in scale wages or from 1st September 1978 whichever is later.

# 15(B). Dearness Relief on Pension

With effect from 1st November, 2012, in respect of employees who retired or died while in service on or after 1st November, 2012, Dearness Relief shall be payable at 0.10 % of the Basic Pension or Family Pension or Invalid Pension or compassionate allowance as the case may be. Dearness Relief in the above manner shall be paid half yearly for every rise or fall of 4 points over 4440 points in the quarterly average of the All India Consumer Price Index for industrial workers in the series 1960=100.

JOINT NOTE FOR OFFICERS Dated 25.05.2015

# 6) Special Allowance (w.e.f. 1.11.2012)

With effect from 1.11.2012, officers shall be paid Special Allowance as under:

Scale I-III - 7.75% of Basic Pay + applicable Dearness Allowance thereon

Scale IV-V - 10% of Basic Pay + applicable Dearness Allowance thereon

Scale VI-VII- 11% of Basic Pay + applicable Dearness Allowance thereon

Note : The special allowance with applicable DA thereon shall not be reckoned for superannuation benefits, viz, pension including NPS, PF and Gratuity

RECORD NOTE Dated 25.05.2015

Record Note of Discussions between Indian Banks’ Association and United Forum Of Bank Unions on the issues and demands relating to retirees of the Banks held on 25th May, 2015 at Mumbai.

 In the Charter of demands submitted by the Workman Unions/Offieers Associations for revision of wages and service conditions, certain demands pertaining to the superannuation benefits /issues of retirees were raised. These issues were discussed in detail on various occasions during course of negotiations on the Charter of Demands. [BA maintained that any demand of retirees can be examined only as a welfare measure as contractual relationship does not exist between banks and retirees. The periodic wage revision exercise based on mandate from member banks cover only wages and service Conditions Of servin employees. Retirement benefits are based on service conditions prevailing at the time of retirement of an employee and these do not change with subsequent settlements.

Referring to repeated comparison of pension scheme in hanks to Government pension scheme, lBA stated that while the Government pays pension out of Budgetary allocation, hank pension is a funded scheme. At the time of retirement of an employee) the bank is expected to ensure that adequate funding is made for payment of pension family pension with provision for periodic updation of Dearness  relief  payable. As such there is no provision for updation of pension in banks. Financial implications will need to be fully examined before any changes in benefits payable to pensioners can be considered. The following table gives the details discussion / conclusion reached on various issues raised:

Issues raised by the United Forum of Bank Unions	Response of the                    Indian Bank’s Association
LFC and Hospitalization reimbursement should be extended to retired bank employees	A revised hospitalization / medical expenses reimbursement scheme is being finalized for the in service employees and officers and the benefit of the coverage of this scheme would be extended to retirees also but subject to the condition that cost of the insurance premium under the Scheme would be payable by retirees. Extending Leave Fare Concession facilities to the retirees is not possible
Revision in the rates of Family Pension on the same lines of the Central Government scheme and RBI scheme	While the IBA is sympathetic to the issue, the cost involved is significant and un-affordable at the present juncture. IBA will examine cost implications and sustainability of each bank, at a future date.
Extending Dearness Relief at 100% compensation to all pre- November 2002 pensioners as in the case of post November, 2002 retirees.	Firstly the matter is sub-judice as certain cases on this issue are pending for a decision with Supreme Court.. As such,  IBA cannot take a decision on this issue at this stage. From a humanitarian point of view, IBA may examine feasibility of providing 100% dearness relief neutralization to pre-November  retirees based on a detailed costing exercise
Upgrading the basic pension of all the pensioners at the common and uniform index of 4440 points.	IBA would examine the cost implication and sustainability of member banks.
Updation of pension for all existing pensioners and family pensioners.	In view of Huge additional cost involved in funding the Pension Fund as per the requirements of AS-15-R, it would be impossible to consider this demand. Unions suggested for collecting the details of the pensioners and ascertaining the actual cost, so that a solution may be worked out.
Periodical updation / improvement in pension along with occasions of wage revision of in-service employees on the lines of the Central Government.	This being a funded scheme in lieu of contributory PF, as it is banks are contributing several times to statutory PF contributions towards funding pension scheme every year. Hence providing for periodic updation is not possible as this will have serious impact on the working of the banks.
Uniform percentage of allocation from Welfare Fund towards schemes pertaining to retirees.	Government guidelines permit banks to provide benefits to retirees out of Welfare Funds. This may be taken up at the bank level.