Unwanted financial load on Bank staff by IBA & UFBU combine

9th Bipartite Settlement along with one more option for extending pension to those CPF optees who did not opt for pension has been signed in the banking Industry. The load has been determined on the basis of valuation of liability by 2 actuaries appointed by mutual consent. The funding gap was estimated as Rs.6000/- crores, the employees share being Rs.1800/- crores-30% of the gap. On the individual basis those who received the CPF on retirement have to refund the entire amount so received plus 56% of the said amount. All serving employees who desire to opt for pension have to bear the load from arrears @2.8 times of the revised pay for the month of November 2007. <<<---Detailed Pension Settlement--->>

Although this settlement is considered historic by Unions for achieving the “one more option” to PF optees who did not earlier opt for pension when offered, it is being considered as a betrayal by a section of earlier PF optees- mostly those who retired during the last 1-3 years as this section has been imposed a huge penalty of 56% when the CPF amount was at their disposal for a period of just 10-24 months ,whereas others who used the amount for say 6-8 years and more have also been subjected to the same penalty of 56%.

Let us say the figure of 56% is the sum total of interest for keeping the CPF at the employees disposal. When the interest rate for PF has never exceeded @8%/annum during the period, 56% totals to interest for 7 years (7x8%).In the circumstances, it is highly unjustified that a person who retired 1-2 years back has to repay a staggering sum of Rs 4-5 lakhs whereas an employee who retired 8 years back repays just 50-100 thousand rupees.In fact, this agreement is a boon for those who sought VRS in 2001, and a curse for those who have retired during the period wage negotiations were on after serving for 30 years and more.This means whether you keep the money for 1 year or 7 years, you have to shell out interest for 7 years.

Please wait for the actual worksheets of the gainers and losers in the next post