PENSION BENEFITS

CIRCULAR NO. 26/64/2010/14 12-5-2010

TO ALL UNITS & MEMBERS

Dear Comrades,

Retired Employees & Pension Option

The unique feature of our Pension settlement is that not only the 2,66,000 existing employees will get an option to join the Pension Scheme, but even those who have retired/died after 1995/1996 will be given this option. More than 50,000 retirees/families will be benefited by this option.

Who are covered :

All those who were in the service of the Bank on the date of Pension Regulations in 1995/96 and

a) have retired thereafter before 27.4.10
b) or retired thereafter but died before 27.4.10
c) or died while in service before 27.4.10
d) or ceased to be in service under the Special VRS Scheme after 15 years of service.

How much they will pay to the Bank ;

All such retirees/families who give their option to join the Pension Scheme have to refund the Bank’s contribution to PF received by them along with additional 56% thereon.

How this formula :

v Total fund required for the option : Rs. 4774 crores
v PF paid to the retirees to be refunded : Rs. 1659 crores
v Balanced deficit in fund : Rs. 3115 crores
v To be contributed by Bank (70%) : Rs. 2181 crores
v To be contributed by retirees (30%) : Rs. 934 crores
v Formula : 934 Divided by 16.59 : 56 %

Procedure :

Þ IBA / Banks will make an offer to the PF opted Retirees.
Þ Within 60 days after the offer, option letter should be given to the Bank.
Þ Within 30 days thereafter, Bank will inform the retiree about the amount payable by them.
Þ While doing so, Commutation receivable will be netted and only the balance amount is payable.
Þ Commutation : will be based on present age on date of commutation.

Arrears of Pension :

Ø For those who have retired prior to 27.11.2009, arrears of pension will be paid from 27.11.2009.
Ø For those who retired after 27.11.2009 (but prior to 27.4.2010), arrears of pension will be paid from date of retirement.


Note : This arrears will be on full basic pension + DA without commutation.

Employees Retired after 1-11-2007 ( PF Optees )


Arrears of wage revision from 1.11.2007 till date of retirement will be paid.
Gratuity will be reworked & difference will be paid.
Their Pension/Commutation will be fixed based on 9th BPs.


We give below some live examples which explain the benefit of the option.

Example – 1

S. No.

(Rs.)
1
PF received from Bank 1,25,416.00
2
PF + 56% thereon 1,95,650.00
3
Commutation receivable 1,86,984.00
4
Amount payable to Bank (2-3) 8,666.00
5
Monthly Basic Pension + DA (before commutation ) for May, 2010) 8,046.00
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 64,368.00
7
Net Outgo (2 – 3 - 6) ----NIL….
8
Monthly Basic Pension after commutation 2,354.00
9
Basic Pension + DA after commutation (May, 2010) 6,870.00

Example – 2

1
PF received from Bank 6,26,181
2
PF + 56% thereon 9,76,842
3
Commutation receivable 3,02,382
4
Amount payable to Bank (2-3) 6,74,460
5
Monthly Basic Pension + DA (before commutation) for May, 2010 16,251
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 1,30,008
7
Net Outgo ( 2 -3 -6 ) 5,44,452
8
Monthly Basic Pension after commutation 6,420
9
Basic Pension + DA after commutation (May, 2010) 13,041
10
Monthly Interest @9% on Rs. 544,452 (Col. 7) 4,083
Example – 3

1
PF received from Bank 1,99,856
2
PF + 56% thereon 3,11,775
3
Commutation receivable 1,09,837
4
Amount payable to Bank (2-3) 2,01,938
5
Monthly Basic Pension + DA (before commutation) for May, 2010 5,903
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 47,224
7
Net Outgo ( 2 -3 -6 ) 1,54,714
8
Monthly Basic Pension after commutation 2,332
9
Basic Pension + DA after commutation (May, 2010) 4,737
10
Monthly Interest @ 9% on Rs. 154,714 (Col. 7) 1,160


Example – 4

1
PF received from Bank 359,869
2
PF + 56% thereon 561,396
3
Commutation receivable 266,814
4
Amount payable to Bank (2-3) 294,582
5
Monthly Basic Pension + DA (before commutation) for May, 2010 14,709
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 117,672
7
Net Outgo ( 2 -3 -6 ) 176,910
8
Monthly Basic Pension after commutation 4860
9
Basic Pension + DA after commutation (May, 2010) 12,279
10
Monthly Interest @9% on Rs. 176,910 (Col. 7) 1,326


Example – 5

1
PF received from Bank 577,750
2
PF + 56% thereon 901,300
3
Commutation receivable 391,700
4
Amount payable to Bank (2-3) 509,600
5
Monthly Basic Pension + DA (before commutation) for May, 2010 18,700
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 149,600
7
Net Outgo ( 2 -3 -6 ) 360,000
8
Monthly Basic Pension after commutation 7,400
9
Basic Pension + DA after commutation (May, 2010) 15,000
10
Monthly Interest @9% on Rs. 360,000 (Col. 7) 2,700

Example – 6

1
PF received from Bank 819,019
2
PF + 56% thereon 12,77,670
3
Commutation receivable 441,725
4
Amount payable to Bank (2-3) 835,945
5
Monthly Basic Pension + DA (before commutation) for May, 2010 20,369
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 162,952
7
Net Outgo ( 2 -3 -6 ) 672,993
8
Monthly Basic Pension after commutation 8,047
9
Basic Pension + DA after commutation (May, 2010) 16,346
10
Monthly Interest @9% on Rs. 672,993 (Col. 7) 5,047

Example – 7

1
PF received from Bank 190,000
2
PF + 56% thereon 296,400
3
Commutation receivable 229,542
4
Amount payable to Bank (2-3) 68,858
5
Monthly Basic Pension + DA (before commutation) for May, 2010 11,140
6
Arrears of Pension – from 27.11.2009 till commutation is received
(Approx. 8 months) 89,120
7
Net Outgo ( 2 -3 -6 ) …NIL…
8
Monthly Basic Pension after commutation 3,351
9
Basic Pension + DA after commutation (May, 2010) 9,465

All our Unions should take steps to contact the retirees ( PF Optees) and advise them of these benefits so that they can OPT for the pension scheme for which they have been longing for.

Yours Comradely,
C.H. VENKATACHALAM
GENERAL SECRETARY