Wednesday, May 27, 2015

Pension fund and 2% load!

Pension fund and 2% load !

Let me explain about P.F. Fund and Pension Fund from my understanding.
P.F is deducted at the rate of 10% of Basic Pay from Employee.
An equal amount is contributed by bank to the P.F. account of employee 
These amounts are credited to the P.F. trust account of the individual banks.
Representatives of recognised unions will find place in the Board of trustees.
They have access to the Income/Expenditure account and balance sheet of the trust.
The amounts deposited in the account are invested in various financial instruments like 
Govt., Bond etc., Income generated will be utilized for giving interest to employees account.
At the time of retirement the amount (both employee contribution and Bank contribution) 
standing in the concerned employee will be given to the employee

This is the procedure of Contributory P.F. system.

In case of Pension Fund what is happening?
In 1995 Pension was introduced in Banking sector.
At that time, amount lying in P.F. trust (belonging to Pension opted employees) 
is transferred to Pension fund of the individual Banks.
Thereafter 10% contributions from employees were credited to P.F. Trust account.
10% Contribution by Bank was/ should be credited to Pension Fund.
The amount thus accrued in Pension Fund is invested and income generated also 
credited to Pension Fund .
Out of this fund only, Pension to all retired employees who opted for Pension scheme,
Commutation amount and family pension for the diseased employees, are disbursed every month .

Now my doubts are
1. Whether union representatives are members of any governing board of Pension Fund?

2. If not, Why? After all, the fund belongs to employees.
3. Whether Union people have access to read Income /Expenditure account and
    Balance Sheet of the fund?
4. Whether unions are aware of what is the income generated in this fund every year?
5. Whether Bank is contributing 10% of Basic Pay of all employees every month to Pension Fund?
   (or contribute some funds at their will and pleasure. )
    Whether Banks have contributed the 2/3 amount of additional cost, as accepted by in 9th B.P.S?
6. Whether UBFU is accepting the figures given by IBA , without any scrutiny.?
 Replies received under RTI act by some interested comrades, reveals that Pension Fund is not maintained as if it should be maintained.
9th B.P.S. and Pension fund!

At the time of every B.P.S , IBA will tell that “pension fund is short of funds.
 To retain its viability some sacrifice from employee side is needed “ 
In 7th and 8th some % in increase in wage revision is sacrificed/compromised.

At the time of 9th B.P.S , employees under Contributory P.F. system also want to  join Pension scheme. 
Then IBA said Pension Fund can’t bear the additional cost due to joining of more employees to the scheme. Further it said that additional cost to be shared by Banks and employees. Unions accepted for this deal. Then what will the additional cost ? IBA gave a huge figure that is far away from actual expenditure. Then BEFI intervened and produced a document containing the actual projection of additional cost.  It is much much lesser amount than what is given by IBA. All the unions in UFBU and IBA 
accepted the document after verifying the correctness of the projections.
Then it was decided that 2/3 of additional cost will be borne by IBA and 1/3 will be borne by employees.
The amount so decided are recovered only from those employee who newly joining the Pension scheme. (Thanks to one leaf of two leaves union’s change of stand at the last minute)
Thus a section of employees paid penalty for joining Pension Scheme, even though this  section  of employees suffer from lesser wage revision for the sack of employees already in Pension Scheme.

10th B.P.S. and Pension fund!

This time also IBA said that “since merger of D.A. with Basic Pay is much higher and consequent Pension disbursement will also be high. 
(Mere merging of D.A will not increase pension. Because D.A. is reduced correspondingly. Only loading in addition will make the difference.)
Pension Fund can’t bear the additional burden.
Hence restrict the loading to 2% instead of 15 % “.  Unions accepted the IBA’s argument and signed in the dotted line.
1. My question is, if any document containing the projection of additional cost due to merger of D.A to Basic Pay with 15% loading, is given to UFBU?
2. What is the additional cost mentioned by IBA?
3. Whether unions have analysed and come to a conclusion?
4. On what basis UBFU accepted the proposal of loading 2% only on Basic Pay?
  (which is not a practice in previous occasions)
Members have the right to know about this decision.
What will happen in 11th B.P.S.?
IBA will again say Pension Fund can’t bear additional cost. Therefore Pension will not be paid 
at 50% of last drawn Basic Pay. 
Only 40% of last drawn Basic Pay will be paid as Pension hereafter,
UFBU will accept and sign.
My advance condolences, to those who are going to retire from 01.11.2017.


Pramod Jain said...

Yes you are right, We should protest against this new practice, In past it has been a practice if any allowance attracts DA it has been inclded in pentionary benefits,Why not now? OTHERWISE IT WILL BE THE NEW PRACTICE FOR FUTURE SETTELMENTS

Radhe Darak said...

it is great sorrow that banking condition continuously worse to worst,but if you want to quit you penalise. present situation is so horrible that newcomers treat bank as training centre only dedication with profession has collapsed.Now a negative attitute built up in X BPS against leaving employee.Can it attract newcomers if you treat old this type snatching social security .

Anonymous said...

Dear com.Kumar, The points you have raised are all valid and IBA / UFBU bound to answer. I would like to mention the following which stand to the credit of our union leaders. 1. This the first union that has brought down the pension of senior citizens. 2. This is the first union when the agreement is increase on existing pay slip components but increase is made on non-existant component. 3. This is the first union to say that there is no contract with pensioners.

Our leaders have conveniently forgotten that they (whether CHV or DHV etc.)command respect because of employees standing behind them. Let the union leaders enjoy the foreign tours with the brief cases awared to them. Time has come for them to learn a fitting lesson

Anonymous said...

sir,now you have come to point,these leaders of ufbu are blind.they dont research.iba backed by experts research well to cut staff cost.where unions simply bargain from 45 percent to 15 percent. one old retired officer once told now days the leaders of ufbu were retired special assts.were substaff promotee and have little knowledge unlike previous leaders who were masters.they have acumen to find faults of management in any field of bipartite negotiation,managements were though cunning but fear these leaders due to their personality knowledge and morality which is lacking now. but i have one question whether the leaders of officer assn. are also idiots and have no knowledge.another point you see less employee are doing thousand times of past work load.iba has substantial saving in staff cost.but nobody thinks about that forget about ufbu.these idiot leaders were also cut off from members as they dont work with common members

nssmanian said...

Is it true that the retirees' grievances are to be taken up separately with IBA & Govt. by UFBU and retirees associations?

Anonymous said...

Pl.recall the 8th BPS signed initially. The union fought and got some improvement even after signing for workmen. So it is not too late. We will fight, we will pressurize and let spl.allowance (grade pay) be merged with BP or let it be included for superannuation benefits. If we try, there is no force on earth to deny us the improvement.
UFBU has not apologized till date, accepting their mistake. Let them come forward to correct the settlement. For this purpose only everybody is pleading for transparency.

Anonymous said...

What is halting / diem allowancs for officers as per new agreement

gopinathan mp said...

Wage revision means increase in pay as well as pension at least by a minimum amount. Now this settlement shows a decrease in pension. This is a wonderful state of affair. So pathetic as our leaders are concerned

Siva Subrahmanyam kv said...

MAKE IN INDIA : it is a crossbreed of a horse and a donkey. Awareness in members dwindled. UFBU's supreme commanders lost their grip on several intricate issues of Officers in PSBs. AIBOC must demand Pay Commission for next wage revision. MERGER of PSBs is essential. It may be a loss to duty exempted so called leaders in PSBs. CAT is very urgently needed for officers in PSBs. UFBU leaders from now onwards must sit before the houses of mr. Vijay malya like NPA stalwarts to recover PSB's dues.w.e.f. 25052016, let the IBA give another similar 15% growth to all of us from these recoveries made by these socalled leaders of presently utterly failed UFBU. We love them. But, we love our lives too. Gyan Sangam failed to come out with real time solutions for PSBs and their Officers. Yet, UFBU succumbed. Let there be PUBLIC AUDIT of Pension Fund in every PSB. Let there be scrutiny by independent third party/audit firms.

Anonymous said...

this is cheating to all bankers as every employee will be retire and will get very low pension may be 35% or less instead of 50% when he does not get any allowance like medical etc. on the days when he have most most most need.

Anonymous said...

Dear Mr.Kumar I am having only 28 years of service. Am I eligible for full pension? Please give reply.

anu said...

Hi all new generation clerk joined bank leaving my software job and post graduation in computer applications and many other certificates. When we most btechs and post graduate s joided thinking here in banks we have unions to protect our rights and recession will never give birth to pink slips and at least one of the couple can backup family in such a crisis. As soon as I joined came came to know we are under NPS. Did not know what it means then. Now I know the real meaning is we are under No pension scheme. Thanks for all the leaders. Kumar sir thanks for analysisaand blog. And wish u dont generalize any one according to age.

Radhe Darak said...

Present position in banking industry specially in public sector is complete target og govt schemes and political leders highlights as their achievements. Promise by PM to give 2% extra increase in addition to what decided in X bipartite, But only 2% rise given in bipartite instead of 15+2=17% should if PM compliance with him promises after recorded JAN DHAN A/Cs opened by bank staff. Now about working condition: due to accute staff shortage heavy workload and late hour working many senior staff not in position to survive and opt to exit but X bipartite snatch monetary benefit from retirement benefits first time in banking history. Monthly lose more than 2300/-after commutation as well as more than 3.5 lac in commutation amount.

Raghavendra SR said...

Pay commission is best opt