| C N Venugopalan Ex-Manager Union Bank of India
| “Nandanam” Kesari Junction N Paravoor Kerala 683 513 |
| Phone: 0484 2447994 Cell:9447747994 e-mail:ceeyenvee@gmail.com | |
No.1011029 29th November, 2010
The Honourable Minister for Finance, Regd. Ack Due
Ministry of Finance,
Government of India,
New Delhi - 110 001
Most Respected Sir,
Joint Note dated 27th April, 2010 on Pension signed by Indian Banks Association and
Bank Unions and denial of Pension for the nine years by Union Bank of India
I inform that I have not been paid Pension by Union Bank of India, a public sector bank for the past nine years illegally. It has now offered to pay pension to me from 27th November, 2009 as per the Joint Note on Pension signed on 27th April, 2010 by Indian Banks Association and Bank Unions for extending a fresh option albeit my eligibility to get it from 20th April, 2001, on which date I retired from the Bank. The communication has been given vide Staff Circular No. 5690 dated 27th August, 2010 and states that sanction of the Government is accorded for implementing the terms of the Joint Note.
I had earlier brought to your kind notice the anomalies in the Joint Note vide my letter No. 100815 dated 15th August, 2010 and subsequent letter No.10095 dated 5th September, 2010 requesting to elucidate clarification from Indian Banks Association (IBA) on various items and for rectification of the anomalies. Since I am yet to hear anything from you or from IBA, I once again bring the matters for your kind consideration. .
I state in this regard that Union Bank of India, by publication in official Gazette dated 13th July, 2002, amended Regulation 28 of the Pension Regulations with retrospective effect from 1st September, 2000 and circulated the amendment vide Staff Circular No. 4904 dated 8th October, 2002 to read it as under:
“Superannuation Pension shall be granted to an employee who has retired on his attaining the age of superannuation specified in the Service Regulations or Settlements. Provided that , with effect from 1st day of September, 2000, pension shall also be granted to an employee who opts to retire before attaining the age of superannuation , but after rendering service for a minimum period of 15 years in terms of any scheme that may be framed for such purpose by the Board with the approval of the Government.”
In terms of this amendment, with effect from 1st day of September, 200, an employee going out of the Bank through any scheme framed by the Bank is entitled to pension and the condition in the Joint Note for paying pension from 27th November, 2009 only is inconsistent with the Regulation No.28 which is in force. The Joint Note between IBA and Unions can not override the Gazette Notification and hence the provision in restraint of paying pension from date of retirement to the date 27th November, 2009 is to be scrapped as it is illegal. Whereas my counterparts who retired from the pension segment are paid pension from the date of retirement, non payment of the benefit to me will be highly discriminatory and in infringement of the Constitutional ethos. The loss one officer who retired in 2001 would sustain will be in the range of `.8.00 to `.10.00 lakhs, if the pension from the date of retirement is not given. Banks that spend extravagantly on publicity and the executives drawing huge salary and perquisites are attempting to feed themselves on the pittance payable to the poor retired senior citizens who worked for banks to make what they are now. Government giving assent to the Joint Note with this condition would be going unconstitutional and as such should invariably take a strong exception of the action of IBA in denying pension from retirement date.
As per clause D of the Joint Note, it is seen that on cost considerations, IBA remained unwilling to extend fresh option for pension and brought pressure on Unions to consent to alternative proposals of sharing the pension cost. Contributory Pension has been introduced in Banks with effect from 1st April, 2010 and this makes it very vivid and underlines that the Pension Scheme in force till this date is non-contributory. Clause 1 of the Joint Notes stipulates recovery of 2.8 times revised Pay of existing employees for extending the benefit of fresh option to them. This recovery is discriminatory since identical employees in the pension segment are extended the benefit of pension without any such payment. Previously, in earlier bipartite settlements, the load factor of wage hike had been reckoned and after appropriating a portion towards Pension Fund, the balance alone was distributed among employees in pension segment and CPF segment uniformly.
Banks have not made the contributions out of the load factor for Pension after each settlement in tandem with the salary hike given and deficit, if any, in the Pension Fund was a contribution of the managements themselves. Pension Regulations states that the Pension Fund is to be built up with employer’s contributions at the rate of 10 percent of Pay and Special Allowances of members and do not envisage any contribution by the employees. As such, the attempt made through the Joint Note to raise a contribution from employees is unwarranted. The failure in making the stipulated contributions to Pension Fund and siphoning of the establishment expenses as profits for distribution as dividend is perhaps the biggest scam on Pension Funds of banks resorted to by Public Sector and Private Sector banks alike which attracts immediate investigation. Profits have been inflated to mislead the investors in stock markets, resulting in inflated share prices and public deceit. If appropriate corrigendum steps are not initiated, it may eventually lead to a banking catastrophe on a later date when petitions in various courts filed by retired employees for pension and arrears are decided in their favour.
Item No.3 (c) of the joint Note on page 3 envisages recovery of 56 percent of CPF and interest paid on retirement from the retired employees for granting them option afresh. The absence of a provision for contribution from employees in the government sanctioned Pension Scheme makes the recovery illegal and it is a heinous attempt on the part of banks that are very sound for reaching out to the bowls of the retired who are senior citizens, now devoid of employment and income for meeting their establishment expenses. When identical people who retired from pension segment are paid Pension without any recovery from them, it also results in discrimination. The collection is moreover uniform for all those retired up to March, 2010 with the result that one who retired in March, 2010 and has not at all enjoyed the benefit of money and one who retired in 1996 and has enjoyed the benefit of money for fourteen years will have to pay the same percentage of levy. Those retired earlier are burdened with `. 1.50 lakhs t`.2.00 lakhs only whereas it will work out up to `. 6.00 to `.7.00 lakhs for those retired recently. In the case of another who retired in April, 2010 or afterwards, who has to contribute 2.8 times revised pay for November 2007 only, the burden works out to less than `.1.00 lakh. This makes the Joint Note irrational altogether on implementation part and takes things to the nadir of ethics.
In chapter 7 of the Joint Note, it is stated that “officers who ceased to be in service on or after 29th September, 1995 in case of Nationalised Banks / 26th March 1996 in case of Associate Banks of State Bank of India on account of voluntary retirement under special scheme after rendering service for a minimum period of 15 years, shall be eligible to exercise option to join the pension scheme subject to terms and conditions mentioned for retiring officers opting for joining the scheme”. But the officers who went out through the Exit Option scheme floated in Associate Banks in 2006 are not extended the facility of fresh option in gross violation of this chapter. This shows clearly that the Joint Note itself is not implemented properly. Those who retired through VRS 2000 and are paid 60 months pay and allowances as special compensation are given option. But those who served for longer periods and are paid lesser compensation of 36 months salary under exit option, which is also an identical scheme floated by banks, are denied option strangely in Associate Banks of SBI. This carries great anomaly with it and is to be refined.
Individual banks including my employer Union Bank of India are allowing commutation of Pension not on the basis of age on the date of actual retirement and takes into account the age on the date of fresh option. This too is quite discriminatory and creates two types of pensioners to the disadvantage of those who are granted option now. The norms stipulated in respect of commutation of Pension are to be made uniform.
The Joint Notes entered into between IBA and Unions can confer any benefit on a third party. But it can not take away the subsisting benefit of such third party with out his consent. The retired had not at all authorized unions to negotiate on their behalf and to surrender their subsisting rights. The Government nod to the most irrational Joint Note on Pension containing brittle clauses makes the Government also a party to the discrimination and infringement of the constitutional provisions of equality and uniform treatment of people of all manners alike. In my opinion, IBA that has signed the Joint Note and obtained the assent of the Hon’ble Finance Minister has misled him through a wrong path that would result in breach of the oath of office taken by him to treat people of all manners alike since the document is pervasively vitiated by elements of discrimination.
Pension is an already sanctioned benefit which was taken away by banks through unfair and illegal means from the employees. When the final Regulations infused in it a clause providing for forfeiture of entire past service, which may entail loss of CPF as also Pension, many employees were forced to stay away from opting and when this clause was later deleted in 1999, fresh option that was legally mandatory to be extended was not given. I had exercised an option for pension on 30 09 1994 in terms of draft Regulations which the Bank revoked later notwithstanding the final and irrevocable nature of the option and want of a procedure for revocation anywhere in the Regulations. While attempting to make illegal recoveries now for the fresh option, IBA should think what banks would have done if each employee opted for Pension when initially offered.
The items to be reviewed in respect of the Joint Note that implanted fresh anomalies in Pension Regulations in the process of rectification of the single anomaly of not extending a fresh option when it was legally due in 1999 are summarized below:
- Whether Banks have, from time to time, made into the Pension Fund the stipulated contribution of 10 percent of Pay and Special Allowances as employer’s share in respect of all those who joined the Pension Fund during the period from 1995 or whether a scam on Pension Fund has taken place in Banks on this score
- Is there any justification in:
a) Raising a contribution from the work force when Pension Regulations in force do not contain a provision for it and envisages contribution from employer alone, which is in lieu of the CPF otherwise payable as per EPF Act?
b) Not paying the Pension to the retired from the date of their retirement to 27th November, 2009 when similar people have been paid such pension
c) Raising a uniform levy of 56 percent of CPF (paid at the time of retirement) when similar people are paid pension without the contribution
d) Raising 2.8 times revised pay for November, 2007 from employees now opting for pension when similar people are extended the benefit of option without such contribution
e) Denying the benefit of option to a segment in Associate Banks of SBI that went out through Exit Option Scheme which is also on all fours with the Special VRS Scheme
f) Whether IBA and Unions are having powers to agree upon and implement their Joint Note overriding the Gazette Notification dated 13th July, 2002 in relation to amendment to Regulation No. 28 thereby overstepping the Government
I request you to please once again screen the Joint Note that catapults all legal nitty-gritty forthwith and to scrap the illegal provisions in it as otherwise it brings shame to the whole governance. Necessary corrigendum steps to establish righteousness may be taken for doing away with the recovery of 2.8 times revised November, 2007 pay in the case of those in service, recovery of 56 percent of CPF and denial of pension from the date of retirement to the arbitrary and irrelevant date of 27th November, 2009 in the case of the retired etc. Pension option may be extended to all those who have requisite qualifying service of 15 years irrespective of different modes of separation which have the same effect on the employer and employee. The implementation of the Joint Notes has already given rise to writ petitions in as many as eight High Courts so far which prima facie shows the infirmities contained in it. I request that I may please be given a reply to this letter at the earliest detailing the steps initiated for removing anomalies in response to it. A direction may please be given to Union Bank of India, my employer to pay me pension from the date of retirement and extending commutation benefit based on the date of retirement and sans all illegal recoveries mentioned above. All the illegal and irrational clauses contained in the Joint Note may please be scrapped so that the prestige of the Government is not undermined by IBA.
Thanking You,
Yours faithfully,
C N Venugopalan
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