Wednesday, November 18, 2020

 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:

Gratuity: 20,00,000-18,44,483

Diff. (-)Rs.1,55,517

Commutation: 16,59,459-14,47,642

Diff. (-)Rs.2,11,817

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 wins๐Ÿ‘, Unions failed๐Ÿ‘Ž

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