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Who is eligible for pension?
For becoming eligible for pension an employee should have opted for pension when the pension scheme was implemented in bank in the year 1995. A second option of pension was subsequently given . Employees who had given option for pension at the time of second option, are also eligible for pension.
An employee with 20 years of qualifying service is eligible for pension. An employee who has completed 33 years of qualifying service is eligible for full pension. An employee with less than 33 years of service is eligible for pro rata pension.
Following types of employees are not eligible for pension on account of forfeiture of service clause in the pension rules
1. Employees who have resigned from the service.
2. Employees who are dismissed, terminated or removed from bank’s services
3. An interruption in the service of bank employee entails forfeiture of his past services except in the cases of authorized leave of absence and suspension followed by reinstatement.
What are the types of pension?
Superannuation Pension
Superannuation pension is granted to an employee who on his attaining the age of superannuation . Presently age for retirement on superannuation is 60 years.
Pension on Voluntary retirement
An employee who has completed 20 years of qualifying service may retire from service by giving proper notice to the employer bank. The notice should be given not less than three months in advance to the appointing authority. There are certain procedures like giving three months notice, acceptance of the application for vrs etc are to be followed which are prescribed in the pension rules of the respective banks.
The qualifying service of an employee retiring voluntarily under this regulation shall be increased by a period not exceeding five years subject to the condition that the total qualifying service shall not exceed 33 years
Invalid Pension
Invalid pension may be granted to an employee who has rendered minimum ten years of service and retires from the service on account of any bodily or mental infirmity which permanently incapacitates him for the service. In this case an employee has to submit medical certificate of incapacity from a medical officer approved by the bank.
Compassionate Allowance
In the case of an employee who is dismissed or removed or terminated from the service, bank may sanction a compassionate allowance not exceeding two third of the eligible pension , if the case is deserving special consideration.
Premature Retirement Pension
This type of pension is sanctioned to an employee who retires from the service on account of the orders of the bank to retire prematurely in the public interest or for any other reason. In this case minimum service required is 10 years.
Compulsory Retirement Pension
When an employee is retired from the bank compulsorily as a penalty, a competent authority may grant him a pension at a rate not less than two thirds and not more than full pension.
What factors determine the pension fixation?
1. No of years of qualifying service
2. Average of last 10 months basic and allowances qualifying for PF (i.e. Average Emoluments) preceding the date of retirement.
What is the meaning of qualifying service?
Qualifying service of an employee commences from the date he takes charge of the post to which he is first appointed on a permanent basis. Service in probation period is counted in qualifying service. All leave during the service in bank for which leave salary is payable shall count as qualifying service. Leave on loss of pay shall not count as qualifying service barring few exceptions given in pension rules. If the period of service of an employee includes broken period less than one year, then if such a broken period is more than six months, it shall be treated as one year and if such broken period is six months or less it shall be ignored.
How to calculate / fix pension ?
Following formula is used for calculating basic pension
Basic Pension =
(Average emoluments) X ( No. of years of qualifying service (max 33 yrs))
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Following formula is used for calculating basic pension
Basic Pension =
(Average emoluments) X ( No. of years of qualifying service (max 33 yrs))
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In case of VRS five years are added to qualifying service subject to the maximum of 33 years. For example if qualifying service is 27 years , in case of vrs optees 5 years will be added to the qualifying service and it will be taken as 32 years for pension calculation purpose. In case of vrs optee having 30 years service, his qualifying service will be taken as 33 years and not 35 years, because of the maximum service clause of 33 years.
What is commutation of pension and how to calculate commutation value?
By commuting the pension the pensioner gets lump sum amount in lieu of the commuted amount of pension. Maximum amount which can be commuted is 1/3 of the basic pension. For every rupee commuted ,commutation value will be determined according to the commutation table, which gives rupee value of commuted pension according to the age on the next birthday after retirement. Following formula is used for calculating the commutation value (i.e. lump sum amount receivable on commutation)
Commutation value = Commuted amount of basic X 12 X commutation factor
( Commutation factor is given in the commutation table according to age on the next birthday after retirement)
Click here for commutation table.
( Commutation factor is given in the commutation table according to age on the next birthday after retirement)
Click here for commutation table.
Commutation is restored after 15 years i.e. deduction of commutation amount from pension will stop after 15 years and pensioner will get full basic pension.
What is dearness allowance on pension?
DA is calculated on original basic pension i.e basic pension without deducting commutation amount. DA is linked to Consumer Price Index and is revised every six months in the case of pensioners, in the months of February and November. There are different rates of DA depending upon the date of retirement. For DA rates refer to IBA circulars.
Click here for latest IBA circular on DA.
Click here for latest IBA circular on DA.
Thus a pensioner get following amount of pension
Basic - Commutation Amount + DA on Original Basic
What is Family Pension?
When an employee dies –
(a) after completion of one year of continuous service; or
(b) before completion of one year of continuous service provided the deceased employee concerned immediately prior to his appointment to the service or post was examined by a medical officer approved by the Bank and declared fit for employment in the Bank; or
(c) after retirement from service and was on the date of death in receipt of a pension, or compassionate allowance;
the family of the deceased shall be entitled to family pension, the amount of which shall be determined in accordance with Pension Rules
When an employee dies –
(a) after completion of one year of continuous service; or
(b) before completion of one year of continuous service provided the deceased employee concerned immediately prior to his appointment to the service or post was examined by a medical officer approved by the Bank and declared fit for employment in the Bank; or
(c) after retirement from service and was on the date of death in receipt of a pension, or compassionate allowance;
the family of the deceased shall be entitled to family pension, the amount of which shall be determined in accordance with Pension Rules
The period for which family pension is payable shall be -
(a)in the case of a widow or a widower, upto the date of death or remarriage, whichever is earlier;
(b)in the case of a son or daughter (including widowed/divorced) till he/she attains the age of twenty-five years or upto the date of his/her
marriage/remarriage, whichever is earlier
Provided the family pension payable to
sons/daughters (including widowed/divorced) shall be discontinued/not admissible when the eligible son/daughter starts earning a sum in excess of Rs. 2550/- per month from employment in Government/private sector/self-employment, etc.
If the son or daughter of an employee is suffering
from any disorder or disability of mind or is physically crippled or disabled so as to render him or her unable to earn a living even after attaining the age of twenty-five years, the family pension shall be payable to such son or daughter for life subject to certain conditions.
from any disorder or disability of mind or is physically crippled or disabled so as to render him or her unable to earn a living even after attaining the age of twenty-five years, the family pension shall be payable to such son or daughter for life subject to certain conditions.
The ordinary rates of family pension shall be as
under
PART A
In respect of employees (other than part-time
employees) who retired during the period from 01.04.1998 to 31.10.2002, on and
from01.05.2005, the ordinary rate of family pension shall be as under: -
Scale of pay per month Amount of monthly family pension
Upto Rs.4,210
30 per cent
of the ‘pay
shall be the
basic family pension plus
30 per cent
of allowances which
are counted for making contributions
to Provident Fund but not
for dearness allowance
shall be the additional family
pension. The aggregate
of basic and additional family pension shall not be less
than Rs.1,056 per month.
Rs.4,210 to Rs.8,420
20 per cent of the ‘pay shall be basic family
pension plus 20 per cent of allowances which are counted for making contributions
to Provident Fund
but not for dearness allowance shall
be the additional
family pension. The aggregate
of basic and additional
family pension shall
not be less
than Rs.1,262 per month.
Above Rs,8,420.
15 per cent
of the ‘pay
shall be the
basic family pension plus
15 per cent
of allowances which
are counted for making contributions
to Provident Fund but not
for the dearness
allowance shall be the
additional family pension. The aggregate of basic and additional family pension shall not be less
than
Rs.1,687
per month and
more than Rs.3,521
per month.
PART B
In respect of employees (other than part-time
employees) who retired/retires from
service on or after 01.05.2005, the ordinary rate of family
pension shall be as under: -
Scale of pay per month Amount of monthly family pension
Upto Rs.5,720
30 per cent of
the ‘pay shall
be the basic
family pension plus 30 per cent
of allowances which
are counted for making contributions
to Provident Fund
but
not for dearness
allowance shall be the
additional family pension.
The aggregate of basic and
additional family pension shall not
be less
than Rs.1,435 per month.
Rs.5,720 to Rs.11,440
20 per
cent of the ‘pay shall
be the basic
family pension plus
20 per cent
of allowances which
are counted for making contributions
to Provident Fund but
not for dearness
allowance shall be the
additional family
pension. The aggregate
of basic and additional
family pension shall not be
less than Rs.1,715 per month.
Above Rs,11,440.
15 per cent
of the ‘pay
shall be the
basic family pension
plus 15 per
cent of allowances
which are counted
for making contributions to Provident
Fund but not
for dearness allowance
shall be the additional family
pension. The aggregate
of basic and additional family pension shall not be less
than Rs.2,292 per
month and more
than Rs.4,784 per month.
Note: -
i)
Family pension in
respect of employees who
retired or died while
in service on
or after 01.11.2002
but before 30.04.2005
shall also be revised
in terms of Part B above with effect from 01.05.2005.
ii) In the
case of part-time employees, the minimum amount of family pension and
the maximum amount of family
pension shall be in proportion to the
rate of scale wages drawn by the employee.
8. The
amount of minimum pension with effect
from 01.05.2005 shall be as under: -
(a) In respect of employees, other than part-time employees, who retired on or after 01.04.1998 but before 31.10.2002,
the amount of minimum pension shall be
Rs.1,060 p.m. In
respect of part-time
employees who retired during this period,
the Minimum pension payable shall be Rs.355 p.m.
in respect of
part-time employees drawing
1/3 scale wages, Rs.530 p.m. in
respect of part-time employees drawing ½ scale wages and Rs.795 p.m. in
respect of part-time employees drawing ¾ scale wages.
(b) In respect of employees, other than part
time employees, who retired on
or after 01.05.2005,
the amount of
minimum pension shall
be Rs.1,435 p.m. In respect of part-time employees, who retired on or after 01.05.2005, the minimum pension payable shall be Rs.480
p.m. in respect of
part-time employees drawing
1/3 scale wages,
Rs.720 p.m. in respect
of part-time employees
drawing ½ scale wages
and Rs.1080 p.m. in
respect of part-time
employees drawing ¾
scale wages.
Note: - Minimum
pension being paid
to retirees of
the period 01.11.2002
to 30.04.2005 may also be revised
with effect from to 01.05.2005
with reference to paragraph (b) above.
