THIRUVANANTHAPURAM : The Centre’s rigidity on pension updation is forcing employees and officers of the Reserve Bank of India (RBI) to react and go on a two-day mass leave on September 4 and 5.
“We have waited patiently for long and persuaded various authorities quietly and in a peaceful manner,” the United Front of Reserve Bank Officers and Employees (UFRBOE) said.
Successive RBI Governors and its Central Board have been sympathetic and have repeatedly taken up the pension updation issue with the Centre but of no effect, UFRBOE leaders Samir Ghosh, Suryakanta Mahadik, Keshav Jagtap and Ajay Kumar Sinha said in a statement.
RBI has a pension corpus fund of about ₹16,000 crore, borne out of its contribution on account of employees’ provident fund. This is sufficient to defray the expenses of pension updation and one more option, without any cost to the exchequer, unlike in the case of Central Government retirees.
In 2011, RBI had formally requested the Centre to allow it to extend one option for retirees willing to switch over to pension, in view of the improvements in pension regulations and wage revisions.
In 2014, RBI had formally proposed that the pension amount of old pensioners, who are suffering, be improved, the UFRBOE leaders said. Last year, the Parliamentary Committee on Subordinate Legislation had unanimously recommended that RBI be allowed to extend one more option of pension.
It termed the Centre’s conduct in this regard as ‘arbitrary’, ‘illegal’ and ‘whimsical’. RBI is within its powers to improve its pension scheme. The report was submitted to the Centre, but was returned.
In October 2017, the RBI Governor formally wrote to the Centre, quoting extensively from the Parliamentary Committee report that the central bank would like to improve pension and provide option.
The Centre’s argument is that agreeing to RBI’s proposal will increase expenses and give rise to ‘contagion effect’, which is absolutely untenable, UFRBOE argued.
Firstly, the amount will be entirely borne by RBI from its own pension fund, whereas the Centre’s pension updation scheme for its pensioners is burdening the exchequer and adding to the fiscal deficit. Besides, the Centre recently updated the pension of 25,000 professors and non-teaching staff of UGC sponsored Universities.
The Centre has also introduced pension for 94,000 serving and 55,000 CPSE retirees. Being the largest employer, the Centre itself creates the contagion effect by periodically updating the pension of 55 lakh Government retirees.
Having given this benefit to its own pensioners, it cannot stand in the way of extending the same benefit to a few thousand RBI pensioners, whose entitlements in view of rapidly increasing costs are absolutely meagre, UFRBOE said.
Providing a brief backgrounder, UFRBOE said that pension was introduced in RBI with effect from January 1, 1986, in lieu of contributory provident fund (CPF).
An assurance was given that it shall generally be on the lines of Central Government Pension Scheme (CGPS) and any improvement in the latter will be extended to RBI pensioners.
As the Centre improved pension periodically with every pay revision, the pension in RBI was also brought in alignment with the pay scale of 1997–2002 covering pensioners up to October 2002. This was, however, objected to by the Ministry of Finance which forced the withdrawal of the same in 2008, despite a Bombay High Court directive.
The policy had to be jettisoned under the Centre’s directive, resulting in stagnant basic pension for pensioners despite intermittent wage revisions for staff. When employees were given the option for a switchover from CPF to pension, a few employees could not opt. After giving four such options up to the year 2000, the Centre put an embargo on any further options.
This excluded about 2,600 employees, many of whom, having retired now, have been in penury as the market interest rate has plummeted to an abysmal low. Their paltry retiral amount of CPF now fetches almost nothing.