Payment of Pension Arrears – Bank Management takes legal shelter to delay the payment.

Circular No.1/2010                                            Date : 24.03.2010

Dear friends,

Payment of Pension Arrears –   Bank Management takes

legal shelter to delay the payment.

The Hon’ble Supreme Court’s decision in favour of VRS 2000 optees, with regard to extending the benefit of additional 5 years of service while reckoning pension, is implemented in several banks.  But in our bank, the Management, which is known for its indifferent attitude, taking shelter of pending SLP in the Supreme Court to delay the payment.  The details of the entire issue are as under:

The Supreme Court on 27.03.2009 in a historic judgement, while disposing of 16 Civil Appeals (No.1942 of 2009 to 1957 of 2009), ruled that the Banks’/IBA’s/Govt’s decision to withdraw clause 29(5) of Pension Regulations, which permits additional qualifying service up to 5 years to the pension optees of VRS 2000 for reckoning pension, is against the law and advised the banks concerned to revise the pension and also pay arrears of pension from the date of retirement to all of their pensioners of VRS 2000.  On the basis of this judgement of the Court, we had addressed a letter to the Chairman & M.D. of our Bank on 30.04.2009 and requested him to honour the Hon’ble Court’s Order and pay the arrears of pension.  The Indian Banks’ Association also issued a communication on 17.08.2009, advising all the public sector banks to implement the order of the apex court. The leaders of our parent organization, AIVBOA also raised the issue with the Management in their JCC meeting held on 22.09.2009. The Management informed them in the JCC meeting that an SLP filed by the bank on the similar issue is pending before the Apex Court.  We later collected the information that in a writ petition filed in the Bombay High Court on the same issue by Smt.Neela Arun Mohile and others, who have retired from our bank under VRS, the Court decided in favour of the petitioners on 28.04.2009.  This ruling was passed by the High Court without any reference to the Supreme Court’s decision of 27.03.2009.  Against the judgement of the Bombay High Court, our bank management filed an SLP before the Hon’ble Supreme Court in July 2009.  The management is therefore referring to this SLP.

Legally, the  bank management  may  be right in referring to the SLP.

But, after knowing the apex Court’s decision of 27.03.2009, the management could have withdrawn the SLP, and paid the arrears of pension to the eligible pensioners.  But, it is too much to expect such a “generous” action from the present management of the bank.  Can we expect that the management, which denies compensation to the dependents of the employees who dies in harness, for the simple reason that the application for compensation was received after 6 months of the employees’ death, will consider withdrawing of SLP to pay pension arrears to the pensioners?  We cannot dream of such wishful thinking!

The SLP filed by the bank came up for hearing on 31.08.09, 07.09.09, 19.10.09 and recently on 09.03.2010.  It is now adjourned for 09.04.2010.  Knowing very well that the only way to expedite the payment is to seek the legal remedy, we have decided to implead in the said SLP filed by the bank, as a body of Retired Officers of the bank.  We have already engaged an eminent Advocate for the purpose and an application to implead in the case is being moved by our Advocate in the Hon’ble Supreme Court.

We shall keep you informed of the developments.

AIBOC demands improvement in Pension Regulations –

All India Bank Officers’ Confederation, the majority organization of serving Bank Officers, has demanded certain improvement in the pension Regulations in the light of the recommendations of V Central Pay Commission.  A copy of AIBOC letter No.1452/85/10 dated 05.03.2010 addressed to the Chairman of IBA is reproduced below for

the information of the members.

With greetings,

Yours sincerely,

(K B Shetty )                                                (K Balachandra Shetty)

President                                                      General Secretary

Association Office is moved to –





PHONE NO.080-22117537



State Bank Buildings, St. Mark’s Road, Bangalore 560001

No.1452/85/10                                                               05-03-2010

The Chairman,

Indian Banks’ Association,

Stadium House,

Vir Nariman Road,

Mumbai- 400 020

Dear Sir,


We invite your kind attention to the Recommendations of V Central Pay Commission, wherein the Govt. of India in partial modification of Rule 54(3)a of CCS (Pension) Rules, 1972, has decided that the payment of family pension at enhanced rates will be payable for 7 years or till the Government servant/pensioner would have attained the age of 67 years against the existing provision of 65 years.  This was necessitated in the wake of increase in the age of retirement from 58 to 60 years.  These provisions have not been implemented in the Banking Industry although the age of retirement has been revised from 58 to 60 years.

2.     In view of the foregoing, we suggest the following amendments to Pension Regulations 1995 for Bank employees, with regard to payment of Family Pension:

1)     Enhancing the Age upto 67 years for the purpose of Family Pension:

As per the Bank Employees’ Pension Regulations 1995, Regulation 39 Sub-rule 3(i)(ii), in the event of death of an employee after retirement, the Family Pension as determined under clause (a) of this sub-regulation shall be payable for a period of seven years or for a period upto the date on which the retired/deceased employee would have attained the age of 65 years, had he survived, whichever is less.

It may please be noted that the upper age of 65 years was fixed when the normal retirement age was fixed at 58 years.  For all the Bank employees in the Banking Industry the retirement age is increased to 60 years and hence, the payment of family pension should be for 7 years or till the Bank employee would attain the age of 67 against the existing provision of 65 years.

2)     Revision of rate of family Pension to be at par with Government  Employee:

As per the Bank (Employees’) Pension Regulations 1995, Regulation 39, Appendix III, the ordinary rate of family pension shall be determined as per scale of pay.  For example, the employees, who retired/died on or after 01.11.2007 family pension payable is as follows:

Upto Basic Pension of Rs.5720/- 30% with a minimum of Rs.1,435.00
Basic Pension of above Rs.5720/- and below Rs.11,440/- 20% with a minimum of Rs.1715.00
Basic Pension of above Rs.11,440/- 15% with a minimum of Rs.2,292/- and a maximum of Rs.4,724/-

The family of an employee, who unfortunately dies during the fag end of his career, gets a low family pension which is not sufficient even for sustenance and hence there is an urgent need to revise the family pension rates which is already in vogue as per the family pension scheme 1964.  As per the family pension

scheme 1964, family pension shall be payable at a uniform rate of 30% of Basic Pay in all cases, instead of the slab system as per Bank (employees’) pension Regulation 1995.

3)     Revision in the Commutation Value:

As per the Bank (employees’) Pension Regulations 1995, an employee shall be entitled to commute for a lump sum payment of a fraction not exceeding one third of his basic pension i.e., 33% whereas in the case of Government employees, they are entitled for lumpsum payment of an amount not exceeding 40% of his basic pension.  Therefore, there is a need to amend the rule relating to entitlement of commutation in case of Bank Employees.

The foregoing suggestions are in tune with the Recommendations of the V Central Pay Commission and we request you to arrange for a bipartite Meeting to have a threadbare discussion on the issues.  A positive consideration of the above suggestions will benefit a large number of families of Bank employees/officers.

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