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.

Health Insurance - Portability

The Insurance Regulatory and Development Authority of India (IRDA) has devised a convenient method that comes as a welcome relief to those unhappy with their current health insurance
 providers - Health Insurance Portability.

Health Insurance Portability allows policyholders to transfer their existing health insurance policies to a new health insurance provider. Portability safeguards customers from being taken for granted by insurance companies, gives them flexibility, and offers better and more options.

The best part about Health Insurance Portability is that customers have the freedom to switch to a better health insurance provider, without having to worry about losing accrued benefits from the previous policy. The policyholder may also carry forward the waiting period for coverage of pre-existing diseases.

Let’s take a look at some of the most common reasons why customers choose to port out of their existing health insurance providers.

Common Reasons behind Health Insurance Portability:

- Poor service quality
- Inadequate cover for specific health issues
- Slow and cumbersome claim settlement
- Late reimbursements
- Hiked premium, in case a claim is made
- Hidden clauses and conditions - Lack of transparency
- Co-payment clauses
- Room rent limits
- Better deals and more economic offerings from another health insurance provider
- Desire to move to a specialized health insurance company offering personalized services in sync with one’s needs

Now that you know the common reasons that force most people to port out their health insurance from their existing health insurance providers, let’s look at the pros and cons of health insurance portability.

Pros and Cons of Health Insurance Portability  

Pros	Cons
Portability allows customization as policyholders can change/modify the current policy as per their current health condition / requirements and lifestyle changes. For instance, one can opt for additional cover, add fresh nominees, etc.	Portability can be opted for only when the insurance policy is due for renewal, not at other times
The existing sum insured is clubbed with any bonus accrued to compute the new sum insured . The No Claim Bonus (NCB) is also added to the new sum insured.	Policyholders can only port to similar kind of policies and not to different ones.
Because of intense competition, insurance companies usually offer existing benefits at lower premiums.	Sometimes, additional benefits are offered at higher premiums
All benefits of the older policy remain in force even after portability. Also, portability can be opted for without worrying about time bound exclusions	Policyholders who decide to move from group insurance policies to individual policies may lose some of the benefits included in the previous policy.

Now, it’s time to get acquainted with the rules of health insurance portability. To read more about benefit of health insurance portability,

Health Insurance Portability Rules

Permitted Policy Types

Only similar health policies can be ported – a policyholder can port out from a reimbursement plan to another reimbursement plan or from one top-up to another top-up plan.
However, family as well as individual policies can be ported.

Company Type

Policyholders can port policies from any general or specialized insurance company to another specialized or general insurance company.

Renewal

Health insurance portability is allowed during the current policy renewal time only, not any in-between period. Also, it is imperative for policyholders to renew their policies without any breaks. However, if there is any discontinuity in the policy due to delays on the insurance company’s part, it will not be considered as discontinuity and the portability can continue.

Intimation

Those who wish to opt for health insurance portability must notify their decision to the current insurance company in writing, and mention the company they wish to port to. This intimation must be provided 45 days before their existing policy is due for renewal.
IRDA’s circular on Portability of Health Insurance clearly states that the portability request must be filed with the new insurer 45 days before the existing policy expires, otherwise it may be rejected.

Acknowledgement

Insurance companies have to acknowledge portability applications within three days.

Porting Charges

Health insurance portability does not involve any porting charges.

Premiums and Bonuses

Insurers are free to levy premiums as per their specific underwriting norms, and hence premiums may not remain the same even for similar coverage. Those in the high-risk category may have to pay a higher premium after porting.

Grace Period

Applicants are allowed a 30-day grace period for policy renewal, in case porting is still under process/new insurer’s decision is pending. To avail this extended coverage, policyholders need to pay a pro rata premium to the current insurer. IRDA guidelines say that in such a scenario, policyholders cannot be forced to pay the entire year's premium.

Sum Insured

Policyholders could opt to increase the minimum sum insured when they port. While it is true that approval of the increased sum is subject to acceptance by the new insurer’s underwriter, it is also true that new insurers have to provide at least the minimum insurance equal to the old policy’s original sum insured.

Pre-existing Diseases Waiting Period

If you apply for an increase in cover, the entire pre-existing diseases waiting period has to be served. If the previous insurer has a three-year waiting period, and you have served it, but the new insurer mandates four years, you need to serve one additional year to get pre-existing diseases coverage under the new policy.

Shifting Plans within the Same Company

Policyholders can port out from one plan to another plan within the same company.
Note: The regulator lays down that insurers must accept requests at policy renewal or end of the specified exit age by offering suitable credits for all previous policy years, provided the policy is continued without breaks. It has also been laid down that the new insurer should allow the credit gained by the insured for pre-existing conditions’ waiting period. This applies when an individual moves from one insurer to another and also when an individual makes a switch from one plan to another with the same insurer.

Reasons for Rejection of Portability Requests

IRDA has given insurers the authority to reject a portability application, if it is not line with the company’s terms, conditions, and policies.

Further, portability applications may be rejected on grounds of:
-  Inadequate information
-  Delays in document submission
-  Poor claim history - Insurers are suspicious about portability requests where multiple heath
    claims have been made recently
-  Major differences between inclusions, exclusions and other features between the current policy
   and policy the customer wishes to port to
-  Non-availability of previous policy documents –Policy documents for at least last three years
    must be preserved
-  Break in policy renewal

All portability requests are considered new and put afresh through all underwriting guidelines, during which, the underwriter measures the risk exposure/customer risk profile and accordingly determines the portability terms and premium to be charged. The underwriter reserves the right to reject any proposal on the grounds they find valid.

Note: Underwriting norms, terms and conditions, and reasons for portability rejection may vary from company to company.

Other Important Grounds of Portability Request Rejection

Higher Age

Senior citizens have fewer options when it comes to health insurance policies that offer adequate cover for age-related diseases. Only a few insurers cover older people because the likelihood of falling ill increases with progressing age. In most cases, insurance companies avoid accepting portability requests from senior citizens.

While some insurance companies accept people in the 60-69 age group, most companies do not consider portability requests from customers who are 70+ years. Either way, in case of a portability request for senior citizens, insurance companies may act fussy, apply stringent underwriting rules, in most cases charge high premiums and ensure high premium loading, and may also apply a co-payment clause.

Unfavorable Health History

As a rule, applicants aged 45+ years must mandatorily go through medical tests. The policyholder may have been healthier in his/her younger years when the policy was initially purchased, but if he/she contracts a disease later that the new insurer does not cover, the portability application could be rejected. Even minor illnesses that could get serious later, lowers chances of the portability request being accepted. However, current insurers cannot refuse policy renewal even if serious ailments get detected after policy purchase.

A history of hypertension, diabetes, cancer, and other such serious illnesses in the applicant’s medical reports will lead to the application being categorised as ‘high risk’ and lead to outright rejection. This holds true for pre-existing diseases and any other chronic ailment that requires ongoing treatment, regular medication and involves high recurrent costs, because this translates to multiple claims.

Porting Out of a Floater Cover

If a policyholder tries to port out of a floater cover, the insurance company may get doubtful. This is because such requests usually come from individuals who have an adverse health declaration and hence, wish to enhance the cover. Therefore, portability request from a customer who wants to port out a single member from a floater cover with a higher sum insured than what is available under the existing policy is likely to get rejected.

Let’s check out what documents are required for health insurance portability.

List of Required Documents For Portability of Health Insurance 

From previous insurer	From new insurer
Previous years policy certificates	Filled proposal form
Latest renewal notice with a clear mention of coverage continuity, etc.	Filled portability form
Self declaration by policyholders in no claim cases
Documents like discharge summary, investigation reports, etc. if any claims have been filed

 Now that you have all the required documents in place, it’s time to find out what’s the process of health insurance portability.

Process for Insurance Portability:

-  On receiving the portability request, the new insurer provides a proposal and a portability form, and gives details of various available products.
-  The policyholder must select a suitable product, and submit the duly filled proposal and portability forms to the new insurer.
After the new insurance company receives the forms with the details, they approach the previous insurer or log on to the IRDA website to check details like applicant’s claim history, medical records, etc.
-  The existing insurer must furnish all requisite details through IRDA’s common data-sharing portal within seven working days. In case of delays in sharing this information, the new insurer can hold the porting request acceptance in abeyance.
-  Once the new insurer receives all the information, they decide on underwriting the policy within 15 days. If the new insurer does not take a decision within this period, they are bound to accept the portability application.

You might be wondering:
What if you’re porting out from group health insurance policies or family floater policies to an individual health cover?

Porting from Group Health Insurance or Family Floater to an Individual Health Cover

Those covered under employer group health insurance policies or family floater policies may port to an individual health cover. However, they first need to switch to a plan offered by the current insurer. Switching to a new insurer of the policyholder’s choice is permitted only after one year.

Before making the final switch, it is recommended that you understand the product being ported to and its differences with the previous policy in terms of sum insured slabs, pricing, entry age restrictions, renewal limit, sub-limits, capping, waiting period, co-payment and pre-existing diseases clauses, hospital network, etc.

'Disclaimer: The sole purpose of this blog is of  creating 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.