• If the Ministry so desired, the approval could be given a post facto. It is further understood that the ministry also conveyed that this up-dation of pension by RBI might prompt retirees from other institutions to raise similar demand resulting in greater pension outgo.•
Under the direction of the Government, the Reserve Bank management withdrew the aforesaid Administration Circular No. 2 dated September 1, 2003, vide its circular dated October 10, 2008 and reverted the basic pension to the level originally sanctioned, prospectively from the month of October 2008.
• The pension scheme of the Bank is entirely funded by the Bank and, unlike the pension scheme of Government employees, is not a burden on the exchequer.
• RBI pension fund is self-sustaining. The entire CPF of those employee who had opted for pension scheme in 1990 and again in 1995 when the option was again re-opened had to be surrendered and the bank made a contribution and the Pension Corpus was thus created. While pension has been made available to Central Govt. employees, Bank and Insurance employees in lieu of their PF @ 8.33%, the sacrifice is more for RBI employees, as they were entitled to 10% CPF. However, instead of making this differential to be factored in while computing pension benefits of RBI staff as and when they retire, the RBI employees were forced to accept this withdrawal decision.
• We also understand that various legal opinion the Bank had sought from the legal experts on the issue did not find any illegality in updation of basic pension by the Bank .
• The 5th pay commission clearly stated that an autonomous institution like RBI can have their own pension scheme provided their fund permits.
• The 6th pay commission clearly stated that the salary structure designed by them applies to all including regulatory organisations. This paves the way open for RBI to devise a truly independent pay, perquisite and superannuation structure.
• This has altered the basic nature of the scheme unilaterally although the original scheme was introduced after elaborate deliberations with all recognized Associations / Unions of the employees of the Bank. The assurances given by the Bank have been seriously compromised.
• All present employees will be adversely affected as and when they retire.
• Existing employees are undergoing a trauma as the basic premise of their superannuation calculations are now found to be completely missing.
• For all future retirees, pension updation is critical since
(i) we are certainly going to retire,
(ii) cost of living will continuously go up,
(iii) future rate of interest though unpredictable, is likely to be low, may be even lower than today,
(iv) as retirees, we don't have fresh earnings.
(v) salary structure is not so high as to enable existing employees to plan a suitable investment policy creating a personal old age insurance in the form of annuity payments.
• In case of Central Government pensioners, however, pensions are upwardly revised after every pay commission and the pay commission had introduced certain other welcome features also like gradual increase of basic pension with retirees' age. Some of the benefits to central government retirees after the Pay Commission are briefly:
***** Maximum and minimum pension raised from Rs. 33,075/-and Rs.2813/-to Rs. 52.200/-and Rs. 4060/-respectively.
***** Full pension after 20 years of service.
***** The recent 6th pay commission have even recommended gradual increase of basic pension with the retirees' age even suggesting that if a pensioner reaches the age of 100, his/her basic pension will be doubled.
***** Family pensioners will get full pension for first 10 years
***** The altered pension scheme of the Bank is now substantially inferior to the Government scheme even excluding the recent improvements, even though the employees of the Bank had to make larger sacrifice to get the same.