IBA Files Affidavit Against Updation of Pension of Bank Retirees?

It is further most respectfully submitted that Indian Banks' Association i.e. Respondent No.3 in the present Petition, as mentioned hereinabove, is an association of Banks and is neither the State nor the instrumentality of State and therefore, Petition under Article 226 of the Constitution of India is not maintainable against the Indian Banks' Association. 

IBA has confirmed through affidavit that there is no provision in Pension Regulations in 1995 (BEPR, 1995) for any Updation in the Pension of Bank Employees and Officers. That, therefore, it would neither be appropriate in-principle nor would be financially viable for the Banks to accept the Representation/Claim of the Employees for Updation of Pension at par with Central Government Employees, particularly, when there is no parity between the two set of Employees i.e. the Central Government Employees and Bank Employees, inter-alia, for the reasons that the Pension in the Banks is paid out of Pension Funds created out of the Banks contribution to the PF, whereas, in respect of Central Government Employees the Pension is paid NOT out of Pension Fund but is treated as Revenue Expenditure and paid out of Budgetary Allocation.

That Pension was not generally prevailing in Banks and that in the Bipartite Settlement signed with the Workmen Unions on 29.10.1993 and Joint Note signed with the Officers Associations also on 29.10.1993 , it was agreed for the first time between the Parties that Pension would be introduced as Second Retirement benefit in lieu of Banks' Contribution to Provident Fund. 

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The said Bipartite Settlement and Joint Note finally culminated in framing of the statutory Regulations by the respective Member Banks titled as Pension Regulations 1995 framed in exercise of the powers by the Board of Directors of the respective Member Banks under Section 19 of the Banking Companies (A & T of Undertakings) Act, 1970/1 980 with the previous approval of Central Government. These Pensions Regulations 1995 have been notified in the Official Gazette on 29.09.1995 . 



The Employees/Officers who opted for Pension in lieu of their Banks contribution of PF, within the specified period either refunded (if already paid) or authorized the respective PF Trusts (if in employment) to transfer their Banks contributions to PF to the respective Pension Funds. Additionally, contributions were also made to the Pension Funds by the employees and Banks based on the Actuarial Calculations. Hence, the Pension Funds of the Member Banks for the payment of pension therefrom have been created by the contribution from the Bank Employees and Officers and NOT from any Government Grant.

The Banks' Employees and Officers have given up one benefit of Provident Fund contribution from the Employer to get the benefit of Pension. The short fall in the Pension Fund maintained by the Banks is funded by the respective Banks based on Actuarial Calculations from their own Revenue. No contribution is made from the Government in these Pension Funds.  

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