Dear Sir,
This letter of Mr Ramachandran appeared in an anti-pensioners web site in 2011. The coloured portion will testify to "the Commitment and contribution" of Mr Ramachandran in the attempt of anti-pensioners to sabotage ONE MORE Option.
I hope this letter will help you understand the motives and the crocodile-tears of Mr Ramachandran!
Perumal Maruthu
CLICK BELOW
Major
Irregularities in the Second Option for Pension to PSU Bank Employees
and Denial of Pension Option to Senior Citizens Who Are VRS Optees Under
Regulation 19 (1) of Officers’ Service Regulation by
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The United
forum of Banks’ Unions (UFBU) representing workmen and officers in banks
had been requesting the Indian Banks ’Association(IBA) to allow another
option to those who were in the service of the bank prior to 29
September 1995 in case of Nationalised banks and prior to 26 March 1996
in case of associate banks of SBI and continued in the service on or
after that date and did not opt for pension as per the scheme. The
previous Chief Executive Officer of IBA, Mr. H.N.Sinor, turned down the
request for second option for pension to 280,000 remaining employees on 1
December 2007 on the grounds that the additional burden of Rs. 26000
crore approximately, in addition to foregoing around Rs. 9500 crore by
banks’ contribution to PF for these employees would be on PSU banks.
However, no sooner Mr. Sinor retired, than the present CEO, Mr. K.
Ramkrishnan again entrusted the work of
re-calculation of pension cost to 337,000 employees (272,000 serving +
65000 retired) to two new actuaries at the request of employees’
organisation in 2008 and supplied basic data as on 31 March 2008. These
actuaries worked out the cost of second pension option to 337,000
employees at Rs. 6381 crore as against Rs. 26000 crore approximately for
280,000 employees as estimated by the earlier actuaries.
Based on the above calculation, the joint note was signed by
the IBA on behalf of public sector banks with employees’ organisation on
27 April 2010 to grant second pension option to employees (existing +
retired) who did not earlier opt for pension as per 1995 pension
regulation. However, it is a matter of surprise that when the settlement
was put to implementation, the actual cost went up to Rs. 24381 crore
approx. as per the figures published in the audited balance sheets of 19
public sector banks as on 31 March 2011.
Thus
it will be seen that pension cost has gone up by Rs. 18000 crore
approx. (Rs. 24381 crore – Rs. 6381 crore) , i.e. by nearly 382% more
than as per settlement amount which is unheard of in any wage
settlement. This amount of Rs. 24381 crore would have gone up further,
had the Hon’ble Finance Minister agreed to IBA’s recommendation to pay
pension arrears from 31 March 2008. However, Hon’ble Finance Minister
agreed to pay the arrears only from 28 November 2009,i.e. he cut down
the period of pension arrears by 20 months. Further as against 65000
expected retired employees, only 45000 retired employees opted for the
pension as per the information given by the IBA to RBI.
All
the above clearly indicates that the present management of IBA who
signed the above settlement on behalf of all PSU banks clearly joined
hands with the employees’ union and the actuaries and deliberately kept
the expected liability at Rs. 6381 crore, a very negligible amount as
all the working top management officials of the nationalised banks, some
of whom are part of IBA team, were equally interested in getting the
second pension option cleared from the Finance Ministry. As such, this
dubious role of present management of IBA tantamount to committing a big
financial fraud on PSU banks totally ignoring Government of India’s
interests, which owns the PSU banks.
The IBA further managed to get the approval from the RBI to
amortise the additional amount of liability over a period of 5 years to
enable them to show more profit, though this is contrary to pension
settlement, as 70% of the liability was to be borne by the banks in one
go and 30% by the employees. While banks were allowed to amortise the
liability over 5 years, the employees’ contribution was recovered in one
go. This action of amortising the pension liability over a period of 5
years has resulted in putting the Employees Pension Fund Trust into big
financial loss permanently as they have lost the opportunity to invest
the funds of Rs. 18000 crore in a profitable manner. Hence it is
suggested that banks should provide these funds by dipping into general
reserves instead of amortisation by obtaining RBI / Government approval
and till such time compensate the Pension Trust Account @ 12% p.a.
interest.
When I asked IBA ‘how all above mismatch has taken place’,
IBA has washed off its hands on the plea that they are not covered under
RTI Act 2005 and did not reply to my queries. When I reported this
matter to Governor, RBI, the DBOD department replied that they are not
party to this settlement, which is a very casual reply. Hence I am
unable to understand how the learned chairmen of PSU banks have not
questioned the IBA management for the above big financial fraud
committed on PSU banks and have not sought clarification as to how work
of pension settlement was entrusted to IBA without any accountability /
responsibility on the part of IBA and its officials, especially when the
liability has fallen on PSU banks
The major burden of second pension option i.e. 82% is on account of
working employees and only 18% on account of retired employees (as
against 20-25% is on account of retired employees as reported by IBA to
RBI).
In spite of this small quantum of pension liability on
account of retired employees, the IBA has played mischief of exclusion
of VRS optees (other than those who opted for VRS under the 2001 VRS)
from second pension option who are hardly 2500 in number and the total
net liability on account of these retired senior citizens would be
hardly Rs. 1500 crore, which is very negligible as compared to the
benefit granted to working employees. This mischievous action of IBA is
against all canons of equity and natural justice and clearly proves that
it succumbs only to pressure without any concern for the miniscule
minority of VRS optees( other than the optees under special VRS 2001).In
this context, the IBA and the managements of PSU banks would do well to
recall that this miniscule minority did not have the benefit of the
“Golden Handshake” and to add insult to injury, have now been denied the
second option too. Apart from this, they have granted
second pension option to special VRS optees of 2001 who were sent out
by the PSUs under the `golden handshake scheme’ which was designed with
the purpose cutting out the flab of the PSU banks. The IBA chose to
reward those who were considered unwanted in 2001 and punished those who
had taken VRS without any additional benefit. The barest minimum the
IBA could have given to the normal VRS optees is the second pension
option. This action clearly indicates the discriminative policy adopted
by the IBA management scheme against the normal VRS optees.
This action of IBA in excluding the normal VRS optees who
retired under the scheme formulated by the the banks’ board, approved by
Govt of India and the RBI, which is a statute, has resulted in the
filing various writ petitions in various high courts by these VRS optees
who are mostly senior citizens. Since the writ petitions in the high
court’s is likely to take a number of years to be heard , by which time
many senior citizens may not be alive to opt for the pension, it is high
time that the finance ministry looked into the issue urgently and
helped the senior citizens by instructing the IBA to grant them second
pension option without any delay, effective from 28 November 2009 to
ensure justice and fair play.
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