Chairman

Sri S.R.Kulkarni President

Sri S.M.Deshpande Vice President

Sri D.A.Masdekar Sri Ashok Patil Sri J.B.Dave Sri F.Martis Sri B.Ramji Sri M.K.Jha Sri C.Gopinathan Nair Dr.R.D.Yadav Sri K.K.Guptha General Secretary

Sri S.C.Jain Dy. Genl. Secretary

Sri R.S.Desai Sri D.P.Gupta Sri S.V.Srinivasan Sri Debesh Bhatacharya Organising Secretary

Sri P.P.Karandikar Sri Kalyan Sengupta Sri V.K.M.Varma Sri M.N.Pandit Sri B.G.Raithatha Sri C.N.Prasad Sri Kishore Gujarati Sri A.L.Chandramouli Sri C.Gopinathan Nair Sri A.K.Bansal Sri Sunil Srivatsava Sri Dilip Ghosh Sri S.Velayoudam Sri Anindya K. R. Basu Sri Pratap Shukla Dr.G.S.Jog Treasurer

Sri M.S.Chourey

A L L I N D I A B AN K R E T I R E E S ’ F E D E R AT I O N D-1/1, Sector-C, Scheme-71,

Near Kasara Bazar School, Indore – 452 009.

Mobile:+91 89660 19488 E-Mail: sharbat_123@rediffmail.com Website: www.aibrf.com

Ref No:2015/ January 19, 2015 Shri Rajeev Rishi,

Chairman, Negotiating Committee,

Indian Banks’ Association, World Trade Centre,

6th Floor, Centre 1 Building,

World Trade Centre Complex,

Cuff Parade, Mumbai - 400 005.

Respected Sir,

MEMORANDUM ON RETIREES’ DEMANDS

Enclosed herewith, please find our memorandum containing bank

retirees’ demands on improvement of pensionary benefits to past

retirees for your consideration.

Also, we attach two notes on Uniform Dearness Relief and Updation of

Pension to past retirees for your perusal and ready reference.

In this regard, we request you to grant us appointment on a date and

time convenient to you and we shall be much obliged, if you kindly

arrange for a meeting of our delegation with your good self for

elucidating our demands for your consideration.

Awaiting your positive response and thanking you in anticipation,

Yours Sincerely, ( S.C.JAIN ) GENERAL SECRETARY

Enclosures: Memorandum with 2 Notes.

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MEMORANDUM SUBMITTED TO

INDIAN BANKS’ ASSOCIATION (IBA) ON

BANK RETIREES’ DEMANDS

19TH JANUARY 2015

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MEMORANDUM Shri Rajeev Rishi, Chairman, Negotiating Committee, Indian Banks’ Association (IBA), MUMBAI. Respected Sir,

RE: ON RETIREES’ DEMANDS/ISSUES

We have come to know from the communications issued by you as well as by UFBU that IBA has now improved offer to twelve and half percent and also has taken initiative to conclude the negotiation by 15th February 2015. 2. We also find that in the next rounds of discussion, one of the issues to be discussed will be improvements in Superannuation benefits. As you know, the past retirees have huge interest in the superannuation benefits, in particular, improvements in pension benefits. 3. Bank retirees have organised themselves independently in last one decade to protect their interest and to resolve pension related issues. Number of bank retirees has already crossed 3 lakhs and may go beyond 5 lakhs in the next 3 years. All India Bank Retirees’ Federation is pioneer in organising the bank retirees. It was formed in the year 1995. Today it has membership of more than 1.25 lakhs. WHY IBA SHOULD HOLD DISCUSSION WITH AIBRF ON PENSION RELATED ISSUES BEFORE FINALISING THE SETTLEMENT: We have been consistently demanding that IBA must also hold discussion with AIBRF before finalisation of the ensuing wage settlement for the following reasons: (a) As stated above retirees are important stake holders in the pension related issues; (b) They have organised themselves independently; (c) It is trend in the government, defence and RBI that retirees are recognised as separate and independent group and are given periodical audience by the authorities concerned on the pension related issues. We understand that RBI Governor has held meetings with the representatives of retirees on pension updation issue in the recent past and taking into account their views, RBI has sent proposal on updation to the government for approval. Similarly, Seventh Pay Commission has given opportunity to the representatives of government retirees to submit memorandum on pension issues;

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(d) AIBRF representatives have been meeting the Officials of DFS to impress upon them to ask IBA to take retirees into confidence before finalising the wage settlement. DFS officials are in agreement with AIBRF’s demands and have assured to send suitable communication in this regard. We understand that DFS has already written to IBA to hold discussion with the representatives of retirees; (e) We have been making request to UFBU leadership and all its constituents to raise the issue of holding discussion with the retirees during their meetings with IBA. They are also in agreement with our demand and have assured us that they will take up the matter with IBA. We understand that UFBU representatives have already made the request to IBA in this regard; (f) The most important point is that holding discussions with the important stakeholder and taking them into confidence will be good HR policy minimising disputes, litigation and creating goodwill for IBA among Senior Citizens. IBA SHOULD SHED RELUCTANCE AND HOLD DISCUSSION Our experience in this area with IBA has so far been highly disappointing and many times, humiliating too. We are at a loss to understand the logic and reasoning for having very strong reservations for not giving appointments to the representatives of retirees and not bothering to even acknowledge their communications by IBA officials. We feel that this stand of IBA needs urgent review. We can assure that we would like to hold the discussion with IBA in a professional and logical manner and you will not find quality of our deliberations any inferior. In view of the above, it is our humble request to immediately hold discussion with the representatives of AIBRF before concluding negotiation on pension related issues. DEMANDS AND ISSUES OF RETIREES AIBRF would like to discuss the following issues related to improvements in existing provisions of Pension Regulations to be approved and sanctioned in the ongoing wage settlement. (1) UNIFORM DEARNESS RELIEF TO ALL PENSIONERS We demand that uniform Dearness Relief should be paid to all the pensioners irrespective of date of retirement in terms of the rates, frequency and base. Dearness Relief to those who retired before November 2002 should be brought at par with the post 2002 retirees. Present system is sheer discrimination which needs to be corrected ab-initio in this settlement and arrears for the past period should be paid. RBI has already granted uniform dearness allowance to its Pre-2002 retirees with effect from 01.02.2005 with arrears. Central Government pensioners of all categories have also been getting uniform dearness relief after the implementation of 5th Pay Commission recommendations.

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Pension Scheme operating in the banking industry is replica of the Government/RBI Schemes in terms of spirit, object and provisions. Further, it is a matter of record that IBA entered into legally enforceable settlement with Unions that DA formula for bank pensioners will be at par with RBI. This demand is pending for more than 7 years. During this long period many pensioners have left this world without getting justice. The number of affected pensioners has come down significantly in the intervening period. It is also a fact that some of Pre-2002 pensioners whose Basic Pension is below particular level are already enjoying benefit of 100 percent dearness relief. In a nutshell, those being deprived of this benefit is now limited and cost escalation due to this factor will be negligible on overall pension cost. We also enclose detailed note prepared on uniform dearness allowance analysing all aspects of the issue for your consideration. WE DEMAND HUNDERD PERCENT DEARNESS RELIEF TO PRE-NOVEMBER 2002 PENSIONERS WITH EFFECT FROM 1ST FEBRUARY 2005 AS GIVEN UNDER 8TH WAGE SETTLEMENT. (2) PENSION UPDATION OF PAST RETIREES Pension Scheme in the banking industry was introduced in 1995 with retrospective effect from 01.11.1993 covering those employees who retired after 01.01.1986. In the last 28 years, basic pension of the past retirees has not been revised despite the fact that basic pension of future retirees was determined on improved basic pay under settlement after settlement. This situation has created huge gap between basic pension of past retirees and those retired in subsequent settlements. All pensioners irrespective of date retirement draw their pension from the common Pension Fund under identical pension rules. Therefore, in all fairness, proper alignment should be made in the basic pension of past retirees while according benefit of higher pension to future retirees under new settlement. This logic has been recognised by highest court of this country and is being followed by Pay Commissions for government pensioners. We understand that RBI is actively considering updation of basic pension of its past retirees in alignment with future retirees and has already done one such exercise earlier. Cost factor and overall pension cost need to be properly aligned and fine tuned between past retirees and future retirees in this settlement. Under pension cost, passing on the benefit of higher allocation entirely to future retirees is not acceptable to AIBRF. Proper formula based on equity and social justice needs to be worked out through discussion and deliberation. We also enclose detailed note prepared on updation analysing all aspects of the subject for your consideration. WE DEMAND PENSION UPDATION FOR ALL PAST RETIREES BY MERGER OF DEARNESS RELIEF AT 4440 POINTS WITH EXISTING BASIC

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PENSION AND GIVING INCREASE IN PER CENTAGE IN BASIC PENSION THEREAFTER ON THE PRINCIPLES AND FORMULA ADOPTED UNDER 6TH PAY COMMISSION. (3) IMPROVEMENT IN FAMILY PENSION Family pension applicable to bank pensioners is very low compared to Family Pension Schemes applicable to government and RBI pensioners. WE DEMAND FAMILY PENSION OF BANK PENSIONERS SHOULD BE BROUGHT AT PAR WITH GOVERNMENT/RBI SCHEME AND THIS BENEFIT SHOULD BE EXTENTED TO ALL PAST FAMILY PENSIONERS. (4) UNIFORM HOSPITALISATION SCHEME FOR RETIREES Health management is the biggest challenge for Senior Citizens and naturally, working class look for support from their employers after retirement as social welfare measure. This is the universal phenomenon and state policy in all Welfare States. At present, as you know, there is no uniform Hospitalisation Scheme for bank retirees. Only some banks are operating some Hospitalisation Schemes for the benefit of retirees, being funded out of Staff Welfare Funds and retirees’ contribution. It is seen that there is no uniformity in these schemes, very inadequate benefits and an element of uncertainty in its continuation when needed if adequate funds are not made available from Staff Welfare Funds etc. Health management of Senior Citizens cannot be dependent on such factors. We understand that Hospitalisation Scheme for employees on the model of Group Mediclaim Insurance Policy is being considered in this settlement. WE DEMAND THAT UNIFORM HOSPITALISATION SCHEME FOR RETIREES SHOULD BE MADE AVAILABLE ON THE SAME LINES AS BEING WORKED OUT FOR EMPLOYEES. WE WOULD LIKE TO DISCUSS MODALITIES WITH YOU. (5) PENSION OPTION TO LEFT OVER PAST RETIREES One more pension option was given to all existing bank employees. However while extending pension option to past retirees, certain sections of past retirees were left out from this option. WE DEMAND THAT ONE MORE PENSION OPTION SHOULD BE GIVEN TO LEFT OVER RETIREES ON THE SAME TERMS AND CONDITIONS IN THE LAST SETTLEMENT DATED 27.04.2010. (6) PENSION ISSUES OF FOREIGN BANKS AND PRIVATE SECTOR BANKS’ RETIREES In Foreign Banks such as Standard Chartered Bank, Commutation of Pension

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is not restored even after 15 years. Further there is no half-yearly change in dearness relief based on the increasing Consumer Price Index. Also, it is seen that the new management of Merging Banks fail to honour the promises and commitments made by the Merged Banks under the settlements after merger and acquisition. We would like to discuss these issues and also other related issues during the meeting. COST FACTOR As and when improvement in the Pension Scheme is demanded by the retirees, one standard and patent argument of “high cost” is advanced by IBA and the bank managements. While we agree that each improvement involves additional cost, but to brush aside the demand outrightly is not entirely based on facts and proper analysis. We have seen that Pension Fund of each bank as well as at the industry level as a whole is showing healthy growth. We find that interest income on the corpus is greater than all annual pension related obligations being met even after lapse of 20 years since introduction of pension, considerable increase in number of active pensioners after introduction of VRS in the year 2000, large number of superannuation in last 2/3 years, high inflation, higher pension to new retirees and many banks not meeting their commitment towards pension funds as per actuarial reports and AS-15 norms etc. We do not feel that there will be any big dip in the pension funds if all the demands listed above are met. Another important angle which is not examined critically from the cost point of view is the likely decrease in number of active pensioners after a few years - because on one side, there will be no new addition in membership and on the other side, decreasing number of pensioners and family pension beneficiaries due to mortality factor. As per our estimation, after expiry of next two decades Pension Funds will be left with huge funds even after meeting all pension obligations. Therefore the argument of high cost being advanced is one sided and needs to be seen in totality. Then another aspect that is to be taken into account while determining pension cost is that Pension Scheme is basically a social security measure to provide respectable and dignified life to the Senior Citizens. As such it should be fixed, revised, modified and changed in ways not entirely dissimilar to the salaries. Thus, pension hike is to be linked to rise in salaries.

We, therefore, humbly request you to take the above aspects into consideration from the view point of cost angle, before taking final decision on our demands for improvement in pensionary benefits for the past retirees. SHARING OF DATA/INFORMATION We are living in a regime of openness and transparency. Common man today enjoys the legal right to information. However, it is seen that IBA is most reluctant to share the information with an important stake holder. In this context,

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we request you to share information about pension cost and other related issues with the retirees to have a meaningful dialogue. STRUCTURED MECHANISM We also request you to evolve an apex level consultative mechanism in due course. This, we believe, will be a useful forum for holding consultation with the stakeholder i.e., the bank pensioners through the AIBRF. It will provide us an opportunity for raising concerns/problems bordering on policy matters affecting retirees directly with you across the table. Further, this will facilitate valuable feed back to you and pave way for maintaining a healthy tradition of constructive discussion on matters pertaining to the retirees. We once again request you to give us early appointment for the meeting to discuss retirees’ issues outlined in the memorandum. Thanking you in anticipation and with regards,

Yours Sincerely,

(S.C.JAIN) GENERAL SECRETARY

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A. NOTE ON UNIFORM DEARNESS RELIEF TO ALL THE PAST RETIREES: Dearness Allowance in the banking industry is linked with the consumer price index and was calculated on basic pay/ basic pension on tapered basis up to 7th settlement. The unions were demanding uniform DA rate on the entire basic pay/ basic pension known as 100 percent DA neutralisation for several years from one settlement after another. However the success on this count could be achieved almost after follow up and continuous efforts for more than two decades in the eighth settlement. However the benefit of 100 percent DA neutralisation was not extended to those who retired before effective date of 8th settlement. Past retirees who retired prior to November 2002 have been agitating and fighting on this issue at the organisational level and legally for last more than 8 years as they consider it as the gross injustice to them. This is the core issue for all the retiree organisations operating in the banking industry. We are of the firm view that this core issue must be addressed and resolved in the 10th settlement to the satisfaction of the affected retirees. Therefore it is necessary to understand the issue in its entirety. The following points are worth noting on this issue. WHO ARE GETTING 100 PERCENT DEARNESS ALLOWANCE AT PRESENT (1) All categories of employees who are in service of the bank (2) All Retirees who retired from the bank service on or after 1st November 2002. (3) All-Pre 1986 retirees on basic component of ex-gratia (4) All spouses of pre-1986 retirees on basic component on ex-gratia (As per the recent guidelines of the government) (5) Pensioners who retired between 01.01.1986 and 31.10.1992 and draw basic pension up to Rs. 1250/- (6) Pensioners who retired between 01.11.92 and 31.03.1998 and draw basic pension up to Rs. 2400/- (7) Pensioners who retired between 01.04.1998 and 31.10.2002 and draw basic pension up to 3550/- (8) Virtually all family pensioners. As per the data available to us, this group who receive 100% DA benefit constitute 80 percent of total pensioners in terms of number and share 85 percent of total pension bill. WHO DO NOT GET 100 PERCENT DA NETURLISATION The following three categories of the retirees at present do not get 100 percent dearness allowance (1) Those who retired between 01.01.1986 and 31.10.1992 and draw basic pension more than 1250/-

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(2) Those who retired between 01.11.1992 and 31.03.1998 and draw basic pension more than 2400/- (3) Those who retired between 01.04.1998 and 31.10.2002 and draw basic pension more than 3550/- This group constitutes 20 percent in terms of number and 15 percent in terms of pension bill. PENSIONERS NUMBER PENSION BILL (1) Getting 100 percent DA 80 percent 85 percent (2) Not getting 100 percent DA 20 percent 15 percent HOW MUCH LESS THEY GET At 5211.91 index which has determined DA for 6 months from August 2013 to January 2014, the above categories of retirees get the following amount of D.A. (1) Those retired between 01.01.1986 to 1.11.92 ( Slab 1152 ) Basic Pension DA at present DA at 100 Difference Diff. per Percent amount Slab Rs. 1251 to 2000 14400 15436 1036 0.90 Rs. 2001 to 2130 14894 16440 1546 1.34 Rs. 2130 to 3000 16598 23155 6557 5.69 (2) Those retired between 1.11.92 to 01.04.98 ( Slab 1015 ) Rs. 2401 to 3850 12794 13677 883 0.87 Rs. 3851 to 4100 13225 14565 1340 1.32 Rs. 4100 to 7000 15874 24867 8993 8.86 (3) Those retired between 01.04.98 to 01.11.2002 ( Slab 881 ) Rs. 3551 to 5650 11206 11946 740 0.84 Rs. 5651 to 6010 11586 12707 1121 1.27 Rs. 6010 to 10500 14223 22201 7978 9.05

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WHAT WILL BE ADDITIONAL COST IN TERMS OF PERCENTAGE FOR GRANT OF 100 PERCENT DA TO PRE NOV 2002 RETIREES -- CERTAIN FACTS (1) Those who retired between 1986 and 2002 are not getting 100 percent DA. These pensioners have completed minimum 11 years and maximum 27 years of retirement and belong to age group of 86 - 70 years. (2) Number of pensioners belonging to this group is now decreasing due to time factor and advancing age. (3) After death of pensioner, either pension is stopped or converted into family pension. In either case number of pensioner not getting 100 percent DA gets reduced. This phenomena is on increase in last a few years. (4) Basic pension of this group is comparatively almost 3 times lower than those retiring now and enjoying benefit of 100 percent DA. Therefore, financial burden for increase will be limited. Based on the data given above, we below give approximate additional cost for granting 100 percent DA to the leftover pensioners. LEFT OVER PENSIONERS 20 PERCENT OF TOTAL INCREASE IN PENSION OF LEFT OVER DUE TO GRANT OF 100 PERCENT DA 8 PERCENT APPROX LEFT OVER CONSTITUTE OF TOTAL PENSIONER IN TERMS OF NUMBER 20 PERCENT PENSION BILL OF LEFT OVER COMPARED TO TOTAL BILL 15 PERCENT OVERALL ADDITIONAL BURDEN ON TOTAL PENSION BILL FOR GRANT OF 100 PERCENT DA TO LEFT OVER ( 8*15/100) 1.2 PERCENT NEXT 5 YEARS ADDTIONAL BURDEN LIKELYTO COME DOWN DUE TO MORTALITY FCTOR BELOW 0.5 PERCENT WHY DEMAND OF 100 PERCENT DA TO LEFT OVER IS JUSTIFIED (1) Inflation affects adversely all retirees at the same degree. (2) Discriminatory in nature. (3) All Government Pensioners/ RBI pensioners from where pension regulations were drawn, have already received benefit of 100 percent DA from retrospective date.

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(4) Clause 6 of the pension settlement between unions and IBA specifically provide for grant of DA at the rates applicable to RBI pensioners. Therefore the demand has legal backing too. (5) According to unions too, the agreement arrived in 8th settlement excluding pre- November 2002 retirees was temporary arrangement to meet the cost factor of the settlement and to introduce the concept of 100 percent DA in the banking industry for which was fighting for 2 decades. (6) All constituents of UFBU have included in their charter of demands (7) Additional financial cost to grant 100 percent DA to left over is limited. OUR DEMAND ON THE ISSUE (1) 100 percent DA to ALL pre- November, 2002 retirees (2) Arrears in this respect should be paid from 01-02-2005 (3) This demand should be discussed on priority basis as and when retiree issues/ superannuation benefit are taken up for discussion during 10th settlement. (4) AIBRF should be consulted and taken into confidence before reaching any agreement on the issue. (5) Any improvement brought in DA formula for employees/ future pensioners in 10th settlement should be made applicable to all the past retirees too without any discrimination. (6) Review of DA for pensioners should be on quarterly basis or at the interval made applicable for the employees in this settlement.

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B. NOTE ON PENSION UPDATION TO PAST RETIREES: WHAT IS PENSION UPDATION? There are three components in the pension scheme applicable to bank retirees (a) Basic Pension (b) Dearness Allowance (c) One- time payment of commutation on optional basis. Updation exercise is related to component no (a) i.e. BASIC PENSION. It is universal practice that while reviewing pay and allowances of the employee the first and foremost exercise carried out is RE-SETTING OF THE BASIC PAY according to the movement of inflation in the intervening period , business growth of the employer and general economic environment of the country. The similar exercise need to be carried out periodically in the case of pensioners too as pension is nothing but deferred salary payable after the retirement. The basic pension need to be re-set in tune with the increase given to the employees in the basic pay in the wage settlement. Government of India has been doing exercise of updation of basic pension for its past retirees in each pay commission since 5th Pay Commission in view of the historical decision of the constitutional bench of Supreme Court in the famous case of D.S.NAKARA Vs UNION OF INDIA. The another important point to be noted is that whenever we talk of pension updation it necessarily relates to the past retirees. As far as employees are concerned their basic pension gets automatically updated with each wage settlement and with each increase on basic pay. Pension updation is nothing but to realign the basic pension of the past retirees with the basic pension of future retirees. It should not happen that two members of the pension funds holding similar positions in the organisation are discriminated in fixation of the basic pension on the basis of their date of birth and date of retirement. WHAT IS THE POSTION OF PENSION UPDATION IN BANKING INDUSTRY AND FINANCIAL SECTOR ( HUGE BACK LOG ) Pension scheme under the provisions of Pension Regulations 1995 was introduced in the banking industry with retrospective effect of 1st January,1986. As all of you know the exercise of pension updation has not been carried out for last 28 years since 1986 despite the fact that it is quite long time period , CPI representing inflation has increased 10 times , salaries of the employees have been revised 5 times, banks net profits have gone up 10 times country’s GDP has gone up 8 times. Therefore there is a very strong case for updation of pension for past retirees. This situation has created huge backlog in respect of pension updation for the past retirees in the banking industry as can be seen from the following data

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Retired Between CPI merged in Present CPI Difference Basic Pension 1986 - 1992 601 5501 4900 1992 - 1998 1149 5501 4352 1998 - 2002 1684 5501 3817 2002 - 2007 2190 5501 3211 2007 - 2012 2664 5501 2957 After 2012 4400 5501 1101 This position can be further understood from the following data Category of Retiree B. Pension B. Pension Difference Under 5th BPS Under 9th BPS Sub-staff 760 5500 4740 Clerk 1430 9150 7720 Officer MM I 2010 12850 10840 Officer MM II 2195 14050 11865 Officer MM III 2455 15750 13295 Officer SM IV 2675 18100 15425 Officer SM V 2975 20200 17226 Officer TM VI 3275 23400 20125 Officer TM VII 3500 26000 22500 It can be seen from the above statistics that in last 28 years basic pension has gone up by 6 times and the gap will further increase unless updation exercise is carried out for past retirees before conclusion of 10th settlement. WHY THIS SITUATION? It becomes highly depressing and frustrating for the past retirees to see that while their basic pension remains stagnant without any review, basic pension of future retirees get automatically updated with every wage revision. They have been

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therefore agitating on this count and have been demanding updation of basic pension in this settlement with clearance of backlog of all the past settlement. Let us analyse the reasons for this situation. As all of you know that the pension option was exercised by only 40 percent employees originally in 1995 and majority of employees did not find the pension scheme very attractive on the basis of their own analysis, inputs received from certain quarters and some systematic propaganda carried out against it. It took almost 15 years for the unions to correct this situation. Up to 9th settlement the priority for the unions was not updation exercise for the past retirees but to ensure one more pension option for the leftovers. Therefore for delay in updation exercise, to large extent, employees and retirees can blame themselves. However, there is qualitative change in the position after one more pension option given to the leftover under 9th settlement and today more than 98 percent retirees are pensioners. PRESENT ENVIROMENT TOWARDS PENSION UPDATION We are happy to mention that today the overall environment towards pension updation for past retirees is favourable and positive in view of the following facts (1) More than 98 percent retirees are pensioners and now agenda for all concerned is improvement in pension including updation of pension. (2) All retiree organisations as well as all unions under the banner of UFBU have been demanding pension updation (3) It is seen that it is being discussed with all seriousness by IBA and UFBU . (4) RBI Retirees’ Federation with full support of the unions are agitating for pension updation. We understand that RBI Governor, in the meeting with union leaders has given assurance to carry out pension updation exercise in near future. (5) LIC & GIC retirees are also demanding pension updation in their organisations and are agitating for it. LIC comrades are fighting legal battle for pension updation. (6) We have come to know from unconfirmed sources that Labour Minister and Department of Personnel in Home Ministry have prepared detailed note on pension updation in financial sector to be placed before the new government. (7) United Forum of Bank Unions ( UFBU ) have been relentlessly taking up the matter at IBA/ Government level for solution in the ensuing wage settlement. (8) AIBRF has been continuously fighting for solution of the issue and last organisational action in this regard was highly successful dharna programme at Jantar Mantar Delhi on 7th March 2014 (8) Recently three major retiree organisations which represent more than 85 percent of bank retirees including AIBRF have come together on the issue of pension updation and on some other common demands and have issued joint appeal.

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CONSIDERING THE ABOVE, WE ARE QUITE OPTIMASTIC THAT ISSUE OF UPDATION WILL BE ADDRESSED IN THE FORCOMMING SETTLEMENT. HOWEVER, IT IS HIGHLY COMPLEXED MATTER AND NEED TO WORK FOR THE SOLUTION WHICH SATISFY ALL CATEGORIES OF RETIREES. OUR DEMANDS ON PENSION UPDATION Our demands in this regard are as under (1) Dearness Allowance should be merged at CPI 4440 as being done for employees under 10th wage settlement for all categories of past retirees. (2) Date of effect for updation should be 1st November, 2012, the date agreed for extending benefit to employees under 10th wage settlement. (3) While constructing new basic pension after merger of DA at CPI 4440, formula given under 6th pay commission for updation should be applied. (4) Concept of higher basic pension to the super senior citizen as given to government retirees under 6th pay commission should be introduced for bank retirees under 10th wage settlement. (5) Basic pension should be restored after 12 years instead of present 15 years for commutation. (6) Pension Regulations should be suitably amended to make specific provisions for pension updation for past retirees at the time of each wage settlement as originally envisaged in the settlement signed for introducing pension scheme in the banking industry. (7) The matter should be discussed with AIBRF and other retiree organisations and they should be taken into confidence before finalising the settlement. THE ABOVE DEMANDS ARE REALISTIC AND REASONABLE. WHAT WE ARE DEMANDING THERE IS NOTHING NEW IN IT. THESE BENEFITS ARE ALREADY BEING EXTENDED TO THE RETIREES IN THE GOVERNMENT SECTOR FROM THE YEAR 2006. COST FACTOR The biggest argument coming against pension updation is paucity of funds. Therefore it is necessary to examine the issue from this angle. We would like to place some facts in this regard as under: (1) We have examined data of pension funds of previous years in respect of some banks received under RTI. It is observed that there is no undue strain on the balance sheets of pension funds during last 15 years despite the fact that dearness allowance has increased by almost 800 percent during this period, one more pension

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option given to almost 4 lakhs employees/ retirees in 2010 and high increase in commutation amount for new retirees due to inflation factor. (2) we below give data of pension fund of one bank collected under RTI in support of our contention given above. (a) Growth in pension fund- From 174.36 crores in 1996-1997 crores to 8767 crores at the end of March 2014. It has increased by about 5000 percent in last 19 years after meeting all pension liability. The major growth in this fund is mainly due to the interest income and statutory contribution received in lieu of provident fund. (b) The receipts and payment position of Pension Fund in this bank during last 5 years are as under (Amount in crores) Year Receipts Payments Surplus ( Int. + Contribution) ( Pension+Commutation) 2008-09 110.46 36.59 73.87 2009-10 93.79 41.84 51.95 2010-11 455.59 100.03 355.56 2011-12 863.80 168.05 695.75 2012-13 944.98 194.41 750.57 (3) Position of pension funds in other banks too is more or less on similar lines and they have shown healthy growth in last 28 years. (4) We are of the view that present accounting system of funding pension liability need to be re-looked and it should be made simple and on the lines of government pension funding. Today, total corpus under pension fund in the banking industry is about Rs.1.10 lakhs crores. Legally speaking, this money does not belong to the members of pension fund. But these are basically provisions made by banks for meeting future pension liability in smooth and in uninterrupted manner. Imagine, in case this amount of Rs. 1.10 lakhs crores is transferred to the capital account of banks and pension liability is met out of profit and loss accounts on the lines of employee cost, it can change whole balance sheets of banks and improve their capital adequacy ratio and Indian banks may be re-rated. It can become win-win situation for all concerned, though it will need lot of changes in the present legal provisions. On the basis of above analysis, we can say that fund position should not become constraint in the way of carrying out long pending pension updation exercise. Further, the retirees have legitimate claim for sharing profits and additional funds, if required for this purpose, should come from growing profits of banks.