Revised Family pension With 30% Hike in PSBs - Updates

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Tuesday, 1 March 2022

Revised Family pension With 30% Hike in PSBs - Updates

Union Finance Minister Nirmala Sitaraman had announced revisions in the pension scheme for public-sector bank pensioners. This new scheme will benefit thousands of families of public-sector bank employees.

With the enhanced family pension scheme, the families of deceased public-sector bank employees will be eligible for a pension equivalent to 30 per cent of the last salary drawn by the deceased employee. 


The additional burden of the scheme will be borne by the banks. The scheme is in continuation to the 11th bipartite settlement signed by the banks and unions, addressing wage revision.


Further, employees who have been working with the banks before 2004 will be eligible for a defined pension scheme, wherein the monthly pension will be calculated on the basis of a pre-set formula based on their last-drawn salaries.

Those who have joined after 2004 will be a part of the NPS wherein the employees and the banks contribute towards a retirement corpus.


Earlier, the family pension scheme had slabs of 15-20 and 30 per cent of the pay that the pensioner drew at that point of time and it was capped at a maximum of Rs 9,284.


“That was a very paltry sum and the FM was very concerned… she wanted it to be revised so that they get a decent amount to survive and sustain,” Panda said, adding that with this, the pension can go to as high as Rs 30-35,000 per family. 

The immediate financial implication of this on banks is approx Rs 10 to 12 Crore for a bank like Punjab National Bank. It will bemuch higher in case of State Bank of India.

C H Venkatachalam, general secretary of All India Bank Employee Association, said the schemes were agreed upon already and the bank employees were awaiting the announcement. 

A defined contributory pension fund governs employees who joined banks after April 2010. This scheme will benefit 60 per cent of public sector employees, Venkatachalam said. 

On account of increase in pension contributions by banks under the new pension scheme, Punjab National Bank would incur Rs 10-12 crore per month, a bank official said. 


For the increase in family pensions of deceased bank employees, the im­p­act would be marginal for PNB as such pensioners are less, he added.

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