It is illegal1) one for the purposes of calculation of salary and 2) the other for calculation of pension.

V. Raghunath Sharma started this petition to Ministry of Finance and Indian Bankers Association. I refer to the landmark judgment of the supreme court in special leave petition No 20661-20668/2012 .where in the “Supreme court upholds the definition of Pay as per Bank employees’ pension regulation 1995 for calculation of pension in the judgment pronounced on 13-02-2018 vide canara bank v/s Savitri Venugopal and others. Among other things the court has observed the following which are relevant to the bank employees who retired after November 2012. : 1) There cannot be two pay scales 1) one for the purposes of calculation of salary and 2) the other for calculation of pension. In other words the pay taken for the calculation of salary should be reckoned for the purpose of pension also. In case of employees retired on or after 01-11-2012 the bank had introduced a new pay called " Special Pay" which was eligible for payment of DA etc but kept it out of the preview for calculation of pension for retirees under the 10th Bipartite settlement with a clause as under QUOTE: Special Allowance (w.e.f. 1.11.2012) With effect from 1.11.2012, officers shall be paid Special Allowance as under: Scale I-III - 7.75% of Basic Pay + applicable Dearness Allowance thereon Scale IV-V - 10% of Basic Pay + applicable Dearness Allowance thereon Scale VI-VII- 11% of Basic Pay + applicable Dearness Allowance thereon Note : The special allowance with applicable DA thereon shall not be reckoned for superannuation benefits, viz, pension including NPS, PF and Gratuity. " The said supreme court judgment has very clearly laid down that the above system of having two pay scales one for the purpose of calculating salary and the other one for calculation of pension is illegal" The special allowance which was “carved” out of basic pay portion and given a new nomenclature with intention to deprive the actual pension benefits of the pensioners ( with a view to manage the cost agreed upon and benefit only the existing staff) and is held as illegal by the supreme court. The 10th bipartite settlement signed between the unions and IBA through the above said " New Allowance", which was a part of basic pay for calculation of Salary did not find a place for calculation of Pension thereby the Banks, in agreement with IBA had two separate set of calculations for Salary and Pension. Now that the Supreme court has held that " there can not be two separate calculations for salary and pension" the banks have to include the New allowance paid for salary for calculation of pension also. The act of introducing two separate scales for calculation of salary and pension has resulted in reduction of pension payment to the retired bank employees which also resulted in recovery of pension paid to the pensioners according to the earlier settlement. Normally the revision of salary for Employees of Insurance sector is on the same patron followed in Banking industry ( as both banking and Insurance come under the same finance ministry) but strangely this injustice has been avoided in the Insurance sector wage revision. The supreme court judgement now provides relief to the pensioners. The ministry has to instruct the Indian Banks Association to take corrective measures and calculate pension for the retirees on the basis of 10 months' ‘average emoluments’, as defined in Regulation 2(d) of the Regulations of 1995, (specified that the average of the pay drawn by the employee during the last ten months of his service in the Bank) shall be taken as “Average Emoluments”, so as to work out the pension under Regulation 35(2). This in effect would mean that the bank managements have to re-calculate pension as per Pension Regulations, 1995 and pay arrears from the date of retirement. With this the retired Bank employees will get : 1) Refund of recovery made on illegal recovery of pension, 2) Get the basic pension re fixed at legitimate levels, 3) Get arrears on gratuity, commutation of pension etc. This gives great relief to the retired staff who solely depend of pension and superannuation benefits for the rest of their life. H Trust truth prevails and justice done.