Finally, it seems the banking industry is close to finding a solution to the contentious issue of pension payments to the retiring employees.
A panel of actuaries comprising D Basu of Kolkata and AP Sharma of Chennai, appointed by the Indian Banks Association (IBA) in agreement with the United Forum of Bank Unions (UFBU), an umbrella organisation of nine trade unions, has submitted its report and said the total pension liability for the banking industry would be over Rs 6,000 crore.
However, when the meeting between UFBU and IBA took place to finalise the report, the later was apprehensive about whether banks can genertae such a huge amount of resources at one go and suggested that the amount can pooled in five instalments.
Accordingly, IBA had asked the two-member actuaries panel to work out the amount banks need to pay in each instalment. A total of 2,60,000 bank employees are likely to get benefited from the new pension settlement move.
Sources said the actuaries panel had already sent the clarifications, sought by IBA on November 06. The amount, if disbursed by the banks in five equal annual installments, will have to be higher than Rs 6,000 crore as the interest amount will also be added to it.
However, IBA didn?t respond to the panel?s request for the furnishing the data relating to those employees that are eligible for the pension benefit but have left their jobs and joined somewhere else during the period and those who are not on the bank’s roll. It is expected that the meeting between IBA and UFBU would like to take place during month end to discuss both wage and pension settlement proposals in details.
IBA feels if paid in lumpsum the Rs 6000 crore liability will put a big burden on the banks. Some of the assumptions on which the pension liability calculations have been done by the panel include mortality after retirement, and the salary increases in future.
A copy of the panel?s report has been handed over to the UFBU too. In fact the four-hour long meeting the IBA had with the representatives of the UFBU on the issue for the third time in Mumbai on November 6 remained inconclusive.
When contacted TS Narayanasami, IBA chairman and the Bank of India CMD, said, ?We will put the panel?s report for discussion during our forthcoming managing committee (MC) meeting later this month?. The next MC, held monthly , is slated for November 28.