We reproduce below an article on pension scheme in banks.
All Pension Activists
are requested to
widely circulate this article
among working and
retiree employees.
..........................
ANSWER TO MANY QUESTIONS !
Must Read, Preserve & Circulate
With Regard to Pension updating, funding, continuity of pension Payment, safety of fund matters number of questions are being raised. We have examined all these questions in the light of Pension Agreement, 1993 and Pension Regulations, 1995 under which Pension is being paid.
Whether our concerns in these matters are genuine and relevant, we examine them in this write up.
However, 1616/1684 issue was settled through SCI judgement in a private writ and so is the case of Special Allowance since declared illegal by Court. In these matters Unions stand nowhere in scene. Despite Court Order, Special Allowance is still under discussion for reasons best known to parties. It may be with idea to show show it as Unions achievement in 11th settlement.
We don't discuss here the terms of 2nd pension option, violating Regulations, 1995, depriving due pensionary benefits to large number of people, though the Banks have had recovered huge cost from new pension optees.
All Pension Activists are requested to widely circulate this article among working and retirees employees.
SETTLEMENT DATED 29.10.1993 OVER PENSION IN BANKS -
UNDER SECTION 2(P) AND SECTION 18(1) OF THE INDUSTRIAL DISPUTES ACT OF
1947 READ WITH RULE 58 OF THE INDUSTRIAL DISPUTES (CENTRAL) RULES, 1957.
Cl. 12 of Settlement reads as under:
"12. Provisions WILL BE MADE by a scheme, to BE NEGOTIATED
AND SETTLED between the parties to this settlement by 31st
December, 1993 for applicability, qualifying service , amounts of
pension , payment of pension, commutation of pension, family
pension, UPDATING and other general conditions, etc. on the lines
as are in force in RBI."
Read above clause carefully. One sentence paragraph, according to which a Scheme was to be negotiated & settled between the parties by 31.12.1993 with regard to applicability, qualifying service, amounts of pension, payment of pension, commutation, family pension and (MOST IMPORTANT) UPDATING & other general conditions, etc., but on the LINES as are in force in RBI. Well, let us agree that these aspects were negotiated and settled between the parties, based on which Pension Regulations, 1995 was drafted. These modalities were to be worked out on the lines as were in force in RBI. So, 'No UPDATING' clause in our Regulations, 1995, is very well in line with RBI, where too no updating clause was in existence. RBI Unions raised Pension Revision Demand, despite no revision clause, and achieved through thick and thin of struggles in RBI, Courts and ultimately with Govt of India and won it. We think, it's enough to explain as to how 'revision Clause' didn't find place in Pension Regulations, 1995 and for revision it's not very relevant obstacle at all.
Further, Pension Revision is embodied in Pension Regulations, 1995 itself in terms of which Pension for periods 1.1.1986 and 31.10.1987 was revised vide Clause 35 of Regulations. So, element of 'revision' did exist from day one of Pension. Norms for revision were also laid down in appenfix-1 of Clause 35 of Regulations, 1995.
One more point, we must keep in mind, where law is not specific or silent, inferences are drawn from the usage & practices. In Pension Regulations, 1995, there might not be specific mention of 'Revision', but at the same time, there is no such mention as of 'no revision' or 'one time' fix clause as well. So, in this regard inferences are to be drawn from 'Pension Rules' prevalent elsewhere in Indian context and settle the issue accordingly.
Now, RBI revision is fittest one to draw inference because our Pension Scheme is replica of RBI Pension Scheme. In these backdrop, it is immaterial whether there is revision clause or not. Bear in mind, there was a time when Pension was not in Banking service conditions, but something new was thought of, conceptualized, fought and achieved. Improvement in service conditions is a perpetual and going on processes and for trade Unions it holds no merit to shirk from solemn responsibility to achieve something which is legitimate, genuine & in the interest of working fraternity, on baseless pretexts.
Now, look to other aspect of Funding. Cl.7 deals with composition of the Fund which reads as under:
The Fund shall consist of the following, namely-
(a) the contribution by the bank at the rate of ten percent, per month of the pay of the employees;
(b) the accumulated contributions of the bank to the Provident Fund and interest accrued thereon unto the date of such transfer in respect of the employees;
(c) the amount consisting of contributions of the Bank along with interest refunded by the employees who had retired before the notified date but who opt for pension in accordance with the provisions contained in these regulations;
(d) the investment in annuities insecurities purchased out of the money's of the Fund and interest thereafter;
(e) amount of any capital gains arisibg from the capital assets of the Fund;
(f) the additional annual contribution made by the bank in accordance with the provisions contained in Regulation 11 of these regulations;
(g) any income from investments of the amounts credited to the Fund;
(h) the amount consisting of contribution of the bank along with interest refunded by the family of the deceased employee.
Read above terms carefully, the source of Funding, as envisaged in Regulations. Is there any mention of employees financial obligation towards Pension Funds, other than Banks' PF portion? Then why, whenever wages were revised in past, Unions agreed with IBA for sharing 50% of increased pension cost from financial load sanctioned for employees and officers? There is no such clause that entitles IBA to recover it. It's landmark question of impropriety. As happened, in all last settlements 50% increased pension load was recovered from sanctioned load, from employees side that hammered pay rise even of those who are under NPS.
Now, let us invite your attention to Cl.11 of Regulations. It reads ss under:
11.Acturial Investigation of the Fund- The Bank shall cause an investigation to be made by an Actuary into the financial condition of the Fund every financial year, on the 31st day of March, and make such additional annual contribution to the Fund as may be required to secure payment of the benefits under these regulations.
Read this clause, which very clearly says for actuarial investigation of Pension Fund every year and calls upon Banks to make 'additional contribution to the Fund as may be required to secure payment of benefits under regulations'. Is there any financial obligation of employees? Law doesn't call for what Unions offered to IBA on golden plates. This time again it will be done.
It was a quid-pro-quo deal and as required under rules, pensioners have had to forego their right to Banks' Provident Fund contributions. There is no any other obligation at all on Pensioners with regard to Pension Funding. Onus squarely lies on management to maintain the adequacy of Funds so as to ensure last outgo of Pension.
Let us examine another aspect where people doubt about continuity of Pension payment. Cl.5, Constitution of the Fund, envisage to establish an irrevocable Trust. Fund's object is laid down for 'sole ourpose' to pay Pension in accordance with Pension Regulations, 1995. Now see legal status of Irrevocable Trusts, which have been formed in every Bank. Law defines Irrevocable Trust as under:
"Irrevocable Trust Law and Legal Definition. Irrevocable trust is a trust that cannot be modified or terminated without the permission of the beneficiary. ... Once the grantor has transferred assets into the trust, s/he has no rights of ownership to the assets and the trust."
Even if Banks don't exist, Pension Trust shall pay Pension. It can't be dissolved or taken over by Banks.
Pensioners doubt that Banks can acquire Pension Fund, which legally can't be done. Pension Fund can be specifically used as stated in Cl.13 of Regulations, 1995 for following purposes:
- The payment of benefits by the trust shall be administered fir grant of pensionary benefits to the employees of the Bank or the family pension to the deceased employees of the Bank.
It's satisfying provision that ensures, fund can only be used for payment of specified benefits only.
One more aspect to be noted. Cl.12 of Regulations, 1995 even prohibits Trusts to park their Find in their respective Banks. Look into the followings:
Cl.12. Investment of the Fund- All moneys contributed to the Fund or received or accruing after that date by way of interest or otherwise to the Fund, may be Deposited in a Post Office Savings Bank Account in India or in a current account with any scheduled Bank or utilized in accordance with the Provisions of the Indian Trust Act, 1882 (2 of 1882)
Pension Regulations, 1995 have very wider perception with regard to disputes arising out in implementation at any point of time. Cl.56 of Regulations, 1995 reads as under:
Cl.56 Residuary provisions- In case of doubt, in the matter of application of these regulations, regard may be had to the corresponding provisions of Central Civil Services Rules, 1972 or Central Civil Services (Commutation of Pension) Rules, 1981 applicable for Central Government employees with such exceptions and modifications as the Bank, with the prevision sanction of the Central Government, may from time to time, determine.
Now, interprete above clauses. Bank Pension Scheme is tagged to Central Govt Pension Rules therefore there can be a cause of dispute, whenever CCSR 1972 or CCS ( Commutation of Pension) Rules, 1981 under go change (s). On several occasions in past these rules have had undergone changes, but Unions never raised any dispute in relation to our Pension.
Pension Regulations, 1995 is the basic subordinate legislation, which can be modified positively, but not negatively. It was negatively modified in 1616/1684 matter, challenged & struck down. It was negatively modified in Special Allowance matter, challenged & struck down. 100% DA case people lost at the instance of AIBRF, but fact is that in compensation matter there can't be discriminating rules in one establishment. This entitles retirees same DA, as applicable to working staff.
If you examine Second Pension Option terms in relation to Pension Regulations, 1995, many negative modifications have been made, invalid in the eye of law, if challenged. If someone disagree to it, better he should approach a competent law officer with all documents.
Unions have never examined these issues on law point of view and treated themselves as ultimate law. Second Pension Optees can get great relief and financial benefits if they challenge the second options terms in contravention of Pension Regulations, 1995. We leave it to them. However, we are ready to guide, but not act.
(J. N. Shukla)
National Convenor,
Forum of Bank Pensioner Activists,
PRAYAGRAJ
25.11.2019
9559748834
jagat.n.shukla@gmail.com
(Permitted to be Reproduced & forwarded)
All Pension Activists
are requested to
widely circulate this article
among working and
retiree employees.
..........................
ANSWER TO MANY QUESTIONS !
Must Read, Preserve & Circulate
With Regard to Pension updating, funding, continuity of pension Payment, safety of fund matters number of questions are being raised. We have examined all these questions in the light of Pension Agreement, 1993 and Pension Regulations, 1995 under which Pension is being paid.
Whether our concerns in these matters are genuine and relevant, we examine them in this write up.
However, 1616/1684 issue was settled through SCI judgement in a private writ and so is the case of Special Allowance since declared illegal by Court. In these matters Unions stand nowhere in scene. Despite Court Order, Special Allowance is still under discussion for reasons best known to parties. It may be with idea to show show it as Unions achievement in 11th settlement.
We don't discuss here the terms of 2nd pension option, violating Regulations, 1995, depriving due pensionary benefits to large number of people, though the Banks have had recovered huge cost from new pension optees.
All Pension Activists are requested to widely circulate this article among working and retirees employees.
SETTLEMENT DATED 29.10.1993 OVER PENSION IN BANKS -
UNDER SECTION 2(P) AND SECTION 18(1) OF THE INDUSTRIAL DISPUTES ACT OF
1947 READ WITH RULE 58 OF THE INDUSTRIAL DISPUTES (CENTRAL) RULES, 1957.
Cl. 12 of Settlement reads as under:
"12. Provisions WILL BE MADE by a scheme, to BE NEGOTIATED
AND SETTLED between the parties to this settlement by 31st
December, 1993 for applicability, qualifying service , amounts of
pension , payment of pension, commutation of pension, family
pension, UPDATING and other general conditions, etc. on the lines
as are in force in RBI."
Read above clause carefully. One sentence paragraph, according to which a Scheme was to be negotiated & settled between the parties by 31.12.1993 with regard to applicability, qualifying service, amounts of pension, payment of pension, commutation, family pension and (MOST IMPORTANT) UPDATING & other general conditions, etc., but on the LINES as are in force in RBI. Well, let us agree that these aspects were negotiated and settled between the parties, based on which Pension Regulations, 1995 was drafted. These modalities were to be worked out on the lines as were in force in RBI. So, 'No UPDATING' clause in our Regulations, 1995, is very well in line with RBI, where too no updating clause was in existence. RBI Unions raised Pension Revision Demand, despite no revision clause, and achieved through thick and thin of struggles in RBI, Courts and ultimately with Govt of India and won it. We think, it's enough to explain as to how 'revision Clause' didn't find place in Pension Regulations, 1995 and for revision it's not very relevant obstacle at all.
Further, Pension Revision is embodied in Pension Regulations, 1995 itself in terms of which Pension for periods 1.1.1986 and 31.10.1987 was revised vide Clause 35 of Regulations. So, element of 'revision' did exist from day one of Pension. Norms for revision were also laid down in appenfix-1 of Clause 35 of Regulations, 1995.
One more point, we must keep in mind, where law is not specific or silent, inferences are drawn from the usage & practices. In Pension Regulations, 1995, there might not be specific mention of 'Revision', but at the same time, there is no such mention as of 'no revision' or 'one time' fix clause as well. So, in this regard inferences are to be drawn from 'Pension Rules' prevalent elsewhere in Indian context and settle the issue accordingly.
Now, RBI revision is fittest one to draw inference because our Pension Scheme is replica of RBI Pension Scheme. In these backdrop, it is immaterial whether there is revision clause or not. Bear in mind, there was a time when Pension was not in Banking service conditions, but something new was thought of, conceptualized, fought and achieved. Improvement in service conditions is a perpetual and going on processes and for trade Unions it holds no merit to shirk from solemn responsibility to achieve something which is legitimate, genuine & in the interest of working fraternity, on baseless pretexts.
Now, look to other aspect of Funding. Cl.7 deals with composition of the Fund which reads as under:
The Fund shall consist of the following, namely-
(a) the contribution by the bank at the rate of ten percent, per month of the pay of the employees;
(b) the accumulated contributions of the bank to the Provident Fund and interest accrued thereon unto the date of such transfer in respect of the employees;
(c) the amount consisting of contributions of the Bank along with interest refunded by the employees who had retired before the notified date but who opt for pension in accordance with the provisions contained in these regulations;
(d) the investment in annuities insecurities purchased out of the money's of the Fund and interest thereafter;
(e) amount of any capital gains arisibg from the capital assets of the Fund;
(f) the additional annual contribution made by the bank in accordance with the provisions contained in Regulation 11 of these regulations;
(g) any income from investments of the amounts credited to the Fund;
(h) the amount consisting of contribution of the bank along with interest refunded by the family of the deceased employee.
Read above terms carefully, the source of Funding, as envisaged in Regulations. Is there any mention of employees financial obligation towards Pension Funds, other than Banks' PF portion? Then why, whenever wages were revised in past, Unions agreed with IBA for sharing 50% of increased pension cost from financial load sanctioned for employees and officers? There is no such clause that entitles IBA to recover it. It's landmark question of impropriety. As happened, in all last settlements 50% increased pension load was recovered from sanctioned load, from employees side that hammered pay rise even of those who are under NPS.
Now, let us invite your attention to Cl.11 of Regulations. It reads ss under:
11.Acturial Investigation of the Fund- The Bank shall cause an investigation to be made by an Actuary into the financial condition of the Fund every financial year, on the 31st day of March, and make such additional annual contribution to the Fund as may be required to secure payment of the benefits under these regulations.
Read this clause, which very clearly says for actuarial investigation of Pension Fund every year and calls upon Banks to make 'additional contribution to the Fund as may be required to secure payment of benefits under regulations'. Is there any financial obligation of employees? Law doesn't call for what Unions offered to IBA on golden plates. This time again it will be done.
It was a quid-pro-quo deal and as required under rules, pensioners have had to forego their right to Banks' Provident Fund contributions. There is no any other obligation at all on Pensioners with regard to Pension Funding. Onus squarely lies on management to maintain the adequacy of Funds so as to ensure last outgo of Pension.
Let us examine another aspect where people doubt about continuity of Pension payment. Cl.5, Constitution of the Fund, envisage to establish an irrevocable Trust. Fund's object is laid down for 'sole ourpose' to pay Pension in accordance with Pension Regulations, 1995. Now see legal status of Irrevocable Trusts, which have been formed in every Bank. Law defines Irrevocable Trust as under:
"Irrevocable Trust Law and Legal Definition. Irrevocable trust is a trust that cannot be modified or terminated without the permission of the beneficiary. ... Once the grantor has transferred assets into the trust, s/he has no rights of ownership to the assets and the trust."
Even if Banks don't exist, Pension Trust shall pay Pension. It can't be dissolved or taken over by Banks.
Pensioners doubt that Banks can acquire Pension Fund, which legally can't be done. Pension Fund can be specifically used as stated in Cl.13 of Regulations, 1995 for following purposes:
- The payment of benefits by the trust shall be administered fir grant of pensionary benefits to the employees of the Bank or the family pension to the deceased employees of the Bank.
It's satisfying provision that ensures, fund can only be used for payment of specified benefits only.
One more aspect to be noted. Cl.12 of Regulations, 1995 even prohibits Trusts to park their Find in their respective Banks. Look into the followings:
Cl.12. Investment of the Fund- All moneys contributed to the Fund or received or accruing after that date by way of interest or otherwise to the Fund, may be Deposited in a Post Office Savings Bank Account in India or in a current account with any scheduled Bank or utilized in accordance with the Provisions of the Indian Trust Act, 1882 (2 of 1882)
Pension Regulations, 1995 have very wider perception with regard to disputes arising out in implementation at any point of time. Cl.56 of Regulations, 1995 reads as under:
Cl.56 Residuary provisions- In case of doubt, in the matter of application of these regulations, regard may be had to the corresponding provisions of Central Civil Services Rules, 1972 or Central Civil Services (Commutation of Pension) Rules, 1981 applicable for Central Government employees with such exceptions and modifications as the Bank, with the prevision sanction of the Central Government, may from time to time, determine.
Now, interprete above clauses. Bank Pension Scheme is tagged to Central Govt Pension Rules therefore there can be a cause of dispute, whenever CCSR 1972 or CCS ( Commutation of Pension) Rules, 1981 under go change (s). On several occasions in past these rules have had undergone changes, but Unions never raised any dispute in relation to our Pension.
Pension Regulations, 1995 is the basic subordinate legislation, which can be modified positively, but not negatively. It was negatively modified in 1616/1684 matter, challenged & struck down. It was negatively modified in Special Allowance matter, challenged & struck down. 100% DA case people lost at the instance of AIBRF, but fact is that in compensation matter there can't be discriminating rules in one establishment. This entitles retirees same DA, as applicable to working staff.
If you examine Second Pension Option terms in relation to Pension Regulations, 1995, many negative modifications have been made, invalid in the eye of law, if challenged. If someone disagree to it, better he should approach a competent law officer with all documents.
Unions have never examined these issues on law point of view and treated themselves as ultimate law. Second Pension Optees can get great relief and financial benefits if they challenge the second options terms in contravention of Pension Regulations, 1995. We leave it to them. However, we are ready to guide, but not act.
(J. N. Shukla)
National Convenor,
Forum of Bank Pensioner Activists,
PRAYAGRAJ
25.11.2019
9559748834
jagat.n.shukla@gmail.com
(Permitted to be Reproduced & forwarded)
