How much an employee looses and how much Bank saves by Spl.Allowance concept?
(i.e. spl.allowance is given separately instead of adding to Basic pay itself )
A Special Assistant retiring with Max. B.P+Spl.Pay+PQP+FPP will be as follows with Spl.allow. and with Spl.allow. added to Basic Pay:
Pension after commutation: 38259-33375
Diff. (-)Rs.4884 per month
If we assume life expendency as low as 70 years it will be 4884×120=Rs.586000
(Excluding D.A.increase every six months)
For officers loss will be more as their B.P. is much higher.
For employees under NPS , contribution by Bank will be lower by 16.4% every month for 35 years of service.
As NPS contribution is based on B.P+D.A there will be no increase in NPS contribution even though D.A increases, on Spl.Allow. portion.
Future increments also already reduced by 16.4%.
Therefore Contribution on future increments will also be reduced by 16.4%.
If the concept is continued this percentage will go on increasing by every 5 years due to wage revision.
In this way Accumulation of NPS corpus will be affected at the time of retirement.
This concept is not a Govt.Policy like introduction of NPS.
This concept is accepted in Banking sector only.
Hence, IBA wins👍, Unions failed👎
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