Injustice With Retired Bank Staff

Injustice With Retired Bank Staff

Ref: 2015/208                                                             July 19, 2015

The Chairman,

Indian Banks’ Association,

World Trade Centre, 6th Floor , Centre 1 Building, 
World Trade Centre Complex,  
Cuff Parade,  Mumbai - 400 005.

Dear Sir,

Reduction of Commutation from the date of retirement                            in cases where Commutation amount is paid much later

The 10th Bipartite Settlement/7th Joint Note is signed on the 25th May, 2015 and Basic Pay and other allowances, counted for calculation of terminal benefits, including pension is also revised, as provided therein.  On account of upward revision of ‘Pay’ which is counted for pension, those retirees who have retired on or after 1.11.2012, Basic Pension is also going up.  Consequently, they are also entitled to commutation amount on the one third of increased portion of basic pension.  Banks are reducing this portion of Basic Pension, which is commuted, from the date of retirement, instead of reducing from the date of payment of this pension. Similarly, whenever there is delay in payment of a portion of Commutation, on account of decision of Courts, Errors in calculations, sanction of increments/revision in pay, etc. the Commuted portion of increased Basic Pension is also being reduced from the date of retirement.  This practice is causing a loss for such of our members who have received/are receiving a portion of commutation much later.  This portion could be reduced for a period of fifteen years only from the date of payment of commutation amount.  However, Commutation factor as on the date of retirement needs to be reckoned, as the Commutation amount has become absolute on the date of retirement and commutation of one third of ‘pay’ was sanctioned without quantifying the commutable amount. The Bank Employees’ Pension Regulations do not provide for such practice.  The Regulation 56 of Bank Employees Pension Regulations provides for reference to Central Civil Services (Commutation of Pension) Rules, 1981, in case of doubt.   Rule 6(1) b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981 clearly provide for

1. Reduction of commuted portion of increased Basic Pension, for a period of fifteen years from the date of payment of such commuted amount;

2. Commutation Factor on the date of retirement is reckoned for calculation of Commutation amount.   

Relevant portions from Bank Employees’ Pension Regulations and Central Civil Services (Commutation of Pension) Rules, 1981 have been extracted and furnished here below for your ready reference.  

Banks may also refer to their practice in respect of reduction in commuted portion of increased Basic Pension of Central/State Government Pensioners, to whom these Banks are disbursing pension, on account of revision in terms of Pay Commission Reports, Court Orders, Government Orders, etc.  Any difference in methods of reducing commuted portion of pension of Central/State Government pensioners and Bank pensioners is impermissible in view of what is provided in Regulation 56 of Bank Employees’ Pension Regulations and  Rule 6(1)b, 6(2) and 10(A) of Central Civil Services (Commutation of Pension) Rules, 1981.

Therefore, we request you to kindly advise the member banks to reduce commuted portion of the Basic Pension from the date of payment of commutation amount only and not from the date of retirement.  As member banks are parties to Bipartite Settlement/Joint Note dated 25th May, 2015, it would be more appropriate, if they are advised to revise the system immediately.

Thanking you and with regards,

                                                                          Yours Sincerely,

                                                                               (S.C.JAIN)

                                                                     GENERAL SECRETARY