The Central as well as state government employees’ organisations are demanding that the PFRDA should be annulled, NPS (New Pension Scheme) dropped and that the old defined benefit pension should be restored. They have called for a strike on 15th November, on demands including the above. The pension through NPS will be far less than the defined benefit pension and even is not fully assured. But the government is sticking for NPS. The reply in the Parliament shows the government’s defence of the indefensible. We fully support the demand of the central/state government employees for restoration of the old defined benefit pension scheme.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
UNSTARRED QUESTION NO. 4075
TO BE ANSWERED ON AUGUST 10, 2018/SHRAVANA 19, 1940 (SAKA)
REINTRODUCTION OF OLD PENSION SCHEME
Shri Rakesh Singh
Will the Minister of FINANCE be pleased to state:
the details of drawbacks of the New Pension Scheme (NPS) introduced for the Government officials; whether the NPS is not as beneficial monetarily as the Old Pension Scheme (OPS) and if so, the details thereof; whether the Government employees are disgruntled with the NPS and if so, the details thereof; and whether the Government proposes to reintroduce the OPS replacing the NPS, if so, the details thereof and the action taken by the Government in this regard?
The Minister of State in the Ministry of Finance
(Shri Shiv Pratap Shulda)
(a) & (b) National Pension System (NPS) has been designed giving utmost importance to the welfare of the subscribers. Government has made a conscious move to shift from the defined benefit pension scheme to defined contribution pension scheme i.e. NPS, due to rising and unsustainable pension bill. There are a number of benefits available to the employees under NPS. Some of the benefits are enlisted below:
§ NPS is a well designed pension system managed through an unbundled architecture involving intermediaries appointed by the Pension Fund Regulatory and Development Authority (PFRDA) viz. pension funds, custodian, central record keeping and accounting agency, National Pension System Trust, trustee bank, points of presence and Annuity service providers. It is prudently regulated by PFRDA which is a statutory regulatory body established to promote old age income security and to protect the interest of subscribers of NPS.
§ The pension wealth which accumulates over a period of time till retirement grows with a compounding effect. The all-in-costs of the institutional architecture of NPS are among the lowest in the world.
§ Contribution made to the NPS Tier-I account is eligible for tax deduction under the Income Tax Act, 1961. An additional tax rebate of Rs.50000 is also allowed for contributions made to NPS Tier-I under Section 80CCD (1B) of the Income Tax Act, 1961.
§ Subscribers can withdraw up to 25% of their own contributions before attaining age of superannuation, subject to certain conditions. Further, PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (First Amendment) Regulations, 2017” dated 10.08.2017 has liberalized norms for partial withdrawals which also include reduction of requirement of minimum years of being enrolled under NPS from 10 years to 3 years from the date of joining.
§ PFRDA has increased the maximum age limit from 60 years to 65 years for joining NPS-All Citizen Model and Corporate Sector Model, vide “PFRDA (Exits and Withdrawals under the NPS) (Second Amendment) Regulations, 2017” dated 06.10.2017.
§ PFRDA vide “PFRDA (Exits and Withdrawals under the NPS) (Third Amendment) Regulations, 2018” dated 02.2018 has facilitated easy exit & withdrawal in case of disability and incapacitation of the subscriber covered under NPS.
§ Transparency and Portability is ensured through online access of the pension account by the NPS subscribers, across all geographical locations and portability of employments.
(c) & (d) Representations have been received which inter alia also include the demand that the Government may revert to old defined benefit pension system. However, due to rising and unsustainable pension bill and competing claims on the fiscal, there is no proposal to replace the NPS with old pension scheme in respect of Central Government employees recruited on or after 01.01.2004.
After much protest and persuasion, the BSNL Management has restored the Medical Allowance without voucher for out-door treatment. But the management has reduced the quantum. This is not acceptable.
The Management should restore the Medical Allowance for pensioners as earlier. Otherwise it will be treated as an insult and against senior citizens as provided in the Maintenance and Welfare of Parents and Senior Citizens Act 2007.
AIBDPA General Secretary has already taken up the case with the CMD BSNL.
Ministry of Labour & Employment
Payment of Gratuity (Amendment) Bill, 2018 passed by Parliament
The Payment of Gratuity (Amendment) Bill, 2018 has been passed by parliament today. The bill ensures harmony amongst employees in the private sector and Public Sector Undertakings/Autonomous Organizations under Government who are not covered under CCS (Pension) Rules. These employees will be entitled to receive higher amount of gratuity at par with their counterparts in Government sector. The bill was passed by the Rajya Sabha today and the Lok Sabha on 15 March, 2018.
The Payment of Gratuity Act, 1972 applies to establishments employing 10 or more persons. The main purpose for enacting this Act is to provide social security to workman after retirement, whether retirement is a result of superannuation, or physical disablement or impairment of vital part of the body. Therefore, the Payment of Gratuity Act, 1972 is an important social security legislation to wage earning population in industries, factories and establishments.
The present upper ceiling on gratuity amount under the Act is Rs. 10 Lakh. The provisions for Central Government employees under Central Civil Services (Pension) Rules, 1972 with regard to gratuity are also similar. Before implementation of 7th Central Pay Commission, the ceiling under CCS (Pension) Rules, 1972 was Rs. 10 Lakh. However, with implementation of 7th Central Pay Commission, in case of Government servants, the ceiling has been raised to Rs. 20 Lakhs.
Therefore, considering the inflation and wage increase even in case of employees engaged in private sector, this Government decided that the entitlement of gratuity should also be revised in respect of employees who are covered under the Payment of Gratuity Act, 1972. Accordingly, the Government initiated the process for amendment to Payment of Gratuity Act, 1972 to increase the maximum limit of gratuity to such amount as may be notified by the Central Government from time to time.
In addition, the Bill also envisages to amend the provisions relating to calculation of continuous service for the purpose of gratuity in case of female employees who are on maternity leave from ‘twelve weeks’ to such period as may be notified by the Central Government from time to time.
After enactment of the Act, the power to notify the ceiling of the amount of gratuity under the Payment of Gratuity Act, 1972 shall stand delegated to the Central Government so that the limit can be revised from time to time keeping in view the increase in wage and inflation and future pay commissions. (PNB dated 27-03-2018)
The apex court said pension is not a subsidy but an entitlement of a person for years of service he or she has rendered to government
The court further questioned whether the Centre was going to deny pension, a rightful entitlement, just for want of Aadhaar
The attorney general said Aadhaar was instrumental in eliminating many bogus pensioners drawing post-retirement benefits
The Supreme Court questioned the Centre on Wednesday about its decision to link Aadhaar with pensions, reasoning that it is not a subsidy but an entitlement of a person for years of service he or she has rendered to the government in discharge of official duties.
Referring to the argument of petitioners that many pensioners have been denied their only subsistence in old age due to technical and physical reasons, a bench of Chief Justice Dipak Misra and Justices A K Sikri, A M Khanwilkar, D Y Chandrachud and Ashok Bhushan asked attorney general K K Venugopal whether the Centre was going to deny pension, a rightful entitlement, just for want of Aadhaar. Venugopal said Aadhaar has been instrumental in eliminating many bogus pensioners drawing post-retirement benefits for years.
(Courtesy: Times of India)
Pension Revision for BSNL Retirees –Creating confusion for whose interests?
Our earlier write up on the issue has been much appreciated both from BSNL workers and BSNL pensioners since it is the logical and correct stand. We are thankful for their appreciation. But some comrades want to confuse the issue. Let us look in to point after point.
1. “We request the respected leaders of service unions to fight for their pay revision and leave the issue of Pension Revision. Our task has become much more difficult now.” This is one main issue that has been raised in the website of one of the pensioners’ associations. It means that the unions/associations of the workers need not worry about the pension revision and that their intervention has made the pension revision much more difficult. This statement is far from truth and is an accusation against the workers and their unions / associations. This reveals a certain mindset against the unity of the workers and the pensioners. Do they think that the workers and pensioners are enemies? The fact is that it is with the constant and united struggles of the workers and pensioners that the issues of the pensioners have been settled. Let us go through some of the experiences:
a) In the first wage revision w.e.f. 01-10-2000, with conversion from CDA to IDA payscales with point to point fixation, there were two opinions amongst the unions about the wage revision for BSNL absorbed DOT employees. Com.O.P.Gupta suggested that the CDA scale pay existing in DOT should continue with Rs. 1,000/Rs.1,500 extra, which was the Federations’ agreement with government at the time of the corporatisation. He had also pointed out that many PSUs including FCI are continuing in the Central government pay scale. (They continue as such now also). But all other unions demanded for IDA scale. This was in accordance with the Rule 37A as well as relevant orders. Such an agreement was reached after much discussion and IDA scale was agreed with point to point fixation and implemented which was far more beneficial than the existing CDA scales. The workers got increase in wages and those who retired afterwards got increased pension than those who retired before 01-10-2000. It cannot be technically termed as pension revision, but it was an increased pension for all the BSNL retirees. The argument that 2000 wage revision did not get any benefit for the pensioners is far from truth. This benefit to the pensioners was got by the hard wage negotiation and struggle by the workers’ unions. In fact, there was no major pensioner organization at that time in BSNL. Not a single person, employee or pensioner opposed the wage settlement and pension increase on IDA scale for those retired after 01-10-2000. It was unanimous.
b) The second wage revision was w.e.f. 01-01-2007 after the II PRC recommendations were released and approved. Even after the wage revision agreement, the pension revision was not implemented. It was through the continuous struggle of the workers and pensioners organizations that the same was approved by the government and implemented. This time also, it was on the basis of the II PRC and on IDA scales.
c) In the case of 78.2% IDA fitment also, struggle had to be organized both by employees and pensioners. This time also it was on the basis of the wage revision of the employees.
d) For the present wage negotiation w.e.f. 01-01-2017 also the united struggle of the workers and pensioners is necessary. Once again we reiterate that “ Today’s pensioners were yesterday’s workers and that today’s workers are tomorrow’s pensioners”. We are sure that the entire workers and pensioners will accept this position.
2. We are glad that our friends, who wanted to have the CDA pension revision as per the VII CPC has now at least shifted to the position that they want pension revision in the IDA itself, but with the fitment recommended by the VII CPC. Without going in to the complicated calculations and intricacies, let us make the point clear. The fitment recommended by the VII CPC is based on the wages based on CDA scales. The pay scales in CDA as also the fitment is based on the 2016 CDA which is different from the IDA wages and IDA. The fitment is intended for CDA scales at 2016. The fitment recommended for IDA scales by II PRC is entirely different. The cost of living index calculated for IDA and CDA are different as also the period in which it is paid ie. Half yearly in the CDA and quarterly for the IDA. Pension revision for BSNL retirees in 2007 was made on the basis of the II PRC in IDA and not on the basis of the VI CPC recommendations with effect from 2006. Nobody at that time asked for CDA wage revision on the basis of VI CPC and w.e.f. 2016. It is also to be noted that these friends did not demand that the pension revision of BSNL retirees should be implemented as per the recommendations of the VII CPC, when the recommendations were released and were to be implemented w.e.f. January 2016. Why? They demanded the pension revision on the basis of VII CPC on CDA scales, when they suspected that there may not be any wage revision in BSNL w.e.f. 01-01-2017. They put so many justifications to the point that there may not be wage revision and hence no pension revision also. Thus the basis of demanding CDA pension revision on the basis of VII CPC was understood by all.
3. The mighty two days struggle on 21st and 22nd May 2015 as also the discussion with the DOT Secretary on 1st May 2015 as well as further discussion by the Joint Forum of BSNL Unions and Associations, which resulted in the removal of 60:40 condition and grant of 78.2% IDA fixation is also ridiculed as of no consequence. Well, that is their tradition to ridicule and dismiss the workers’ struggles. These friends, instead of supporting the struggles, used to have conferences and inaugurations on the same day when the strike and struggles used to take place. Naturally they are not in support of struggles, but depend on submissions and supplications. They have forgotten the legacy of Com.K.G.Bose, ‘Unity for Struggle and Struggle for Unity’.
4. These friends correctly have stated that in many PSUs, pension revision is made on the basis of the CPCs. Correct. These are organisations like Door Darshan, FCI etc. which has opted for the CPC CDA scales from the initial stage itself.
5. Let us assume that the government accepts pension revision of BSNL retirees on the basis of VII CPC CDA scales instead of III PRC IDA scales. From which date it will be implemented, from 2016 or 2017?
6. Any fixation on VII CPC fitment will result in further discrimination. Already there is discrimination between the DOT Pensioners and the BSNL Pensioners. Another anomaly will come between those retired before 2016/2017 and those retired after. Those who retired before 2016/2017 will get CDA pension revision as per VII CPC, while those who retire after 2016/2017 will get pension on the basis of their salary in the IDA scales. This will be a very serious anomaly, which will divide the entire BSNL pensioners.
7. Have these friends ever thought that what will happen if pension revision on VII CPC CDA scale is implemented. Notional calculation of pension w.e.f. from 2000 onwards on the basis of the V, VI CPC and again on the VII CPC will seriously and adversely affect the existing pensioners.
8. The latest diversion these friends have made is that they are not demanding pension revision on CDA but only on IDA, but on the basis of VII CPC. VII CPC never recommended any pension revision on IDA. Now they say that it is only the fitment factor that they have demanded. How is the fitment calculated? It is on the basis of calculating the fitment factor based on the price index for the CDA. The fitment for the PSU workers is calculated on the price index for the IDA. The years are different, the percentage is different and the salaries are different. When the demand is raised on the basis of the pension revision on CPCs, what will happen to the pension increase in 2000 and pension revision in 2017, which have been much beneficial to the pensioners? The pension and pension revision is granted on the basis of CCS Pension Rules 1972 and for BSNL employees and pensioners amended Rule 37A is also to be considered. As per Rule 37A, recommendations 0f CPC like pension fixation formula, minimum pension, commutation, gratuity, additional pension after 80 years etc. are applicable, except pension and medical allowance. Before Rule 37 A Amendment, CG employees absorbed in PSUs had two options. They can opt for higher pay scales in PSU and opt for CDA Pension. In that case, for the pension purpose, they will be brought back to CDA scale notionally and fix pension accordingly. There is no provision for granting CDA fitment as per CPC to IDA scales.
9. When the massive Parliament March by the BSNL Unions and Associations which was participated by hundreds of pensioners of AIBDPA on 23rd February 2018 was going on these friends wrote: “In effect, the government has rejected both pay revision and pension revision”. They were under the impression that the government will never agree for wage revision in BSNL. But the situation has now changed and the Communications Minister has assured as follows as per the post of the Unions and Associations:
“3rd Pay Revision: So far, the DoT has been maintaining that BSNL employees are not eligible for 3rd Pay Revision. In today’s meeting the Hon’ble Minister agreed that the issue of 3rd Pay Revision of BSNL employees would be processed and would be taken for the approval of the DPE and the Cabinet.” On the pension Revision also the position is the same. It is not rejection now as these friends thought, but processing of the matter.
10. So the question of criticizing and attacking the workers and their organisations is fully unjustified.
11. Now coming to the demand. AIBDPA as well as National Co-ordination Committee of Pensioners Association (led by late Com.S.K.Vyasji and at present by Com.K.K.N.Kutty) has demanded that BSNL wage revision should take place, but the government should order pension revision of BSNL retirees on the basis of the recommendations of the III PRC on the IDA scale. What are the justifications? Consider the following points:
a) Pension increase was ordered in 2000 on the basis of the wage agreement on IDA scale
b) Pension Revision was made w.e.f. 2007 on the basis of the wage agreement on IDA( not on the basis of the fitment formula of VI CPC from 2006)
c) Later, after serious struggle, the 60:40 condition on payment of pension has been removed and the full responsibility for payment of pension to BSNL absorbed DOT retirees have been taken by the government. Hence on the basis of the III PRC, Pension Revision should be ordered with 15% fitment, without waiting for the wage revision. Such a pension revision will be on the basis of IDA pattern, will be similar to the pension increase in 2000 and pension revision in 2007 and will not create the large number of serious anomalies, if it is done on the basis of the VII CPC.
d) The next point raised is that BSNL may be privatized and then what will happen? Whether there will be any wage revision? So far it has not been privatized and even disinvest could be stopped by the united struggles of the workers. When such a situation comes, it is not only pension issue but about loss of jobs and many other issues. The workers and pensioners will have to organize serious struggles to tide over the crisis, if and when it comes.
“UNITY FOR STRUGGLE, STRUGGLE FOR UNITY AND UNITY and STRUGGLE FOR PROGRESS”
WFTU statement on the extend of the retirement age limit of civil servants to 80 years in Japan
21 Feb 2018
The government of Japan decided to extend the age limit for retirement of the civil servants to 80 years. This policy is decided with pretext the financial management of the state budget and is supposedly promoted as a optional measure.
The reality is the Japan holds the worst record on rate the pensioners who lives in the poverty limit among the development countries. Almost one out of 5 pensioners (19%) lives in the limit of the poverty. The lack of adequate funding of the pensions and the pensioners’ needs, is taking place at the same time that the government is moving on the review and increase of the army budget.
The high rates of poverty and the low standard of living of the Japanese pensioners will force them to choose the supposedly optional measure of postponing their retirement. The World Federation of Trade Union, representing more than 92 million workers demands the immediate support of Japanese pensioners and the implementation of dignified pensions and standard of living for the retires simultaneously with a low retirement age limit.
AIBDPA fully supports the WFTU and demands the Japan government not to increase the retirement age.
Non linking of Aadhaar with Pension Account and Payment of Pension
In a reply to a question the Minister of State in the Ministry of Finance has stated in the Parliament that payment of Pension should not be stopped due to non-linking of the pension account with the Aadhaar number. And it is informed that in case if it is not possible to have Digital Life Certificate either through finger prints or through Iris scanning, the physical life certificate submitted by the pensioner may be accepted to avoid any harassment to the pensioner.
AIBDPA leaders Com. V.A.N.Namboodiri, Advisor and Com. R.A.Nair, Treasurer met Shri Anupam Shrivastava, CMD BSNL on 26th October 2017 and discussed about the urgency of revising the pension of the BSNL retirees on the basis of the accepted recommendations of the III Pay Revision Committee with 15% fitment. They pointed out that they have already discussed the matter with Secretary DOT and requested the CMD also to take up the matter. The justification of the demand was fully explained and the CMD appreciated the point.
They also pointed out that early wage revision in BSNL will further help in implementation of the Option I / III for the BSNL pensioners.
Coms.V.A.N.Namboodiri, Advisor, K.G.Jayaraj, General Secretary and R.A.Nair, Treasurer, AIBDPA had a fruitful meeting with Smt.Aruna Sundararajan, Secretary, DoT on.25-10-2017. The delegation handed over a detailed letter on Pension Revision of BSNL retirees with 15% fitment on IDA pattern. They also pointed out that since the pension is being fully paid by the government, the same need not wait for the wage revision of the workers. The Secretary agreed to do the needful in the matter.
The representatives also brought to her notice a very heart breaking case in Tamil Nadu Circle wherein the Principal CCA has returned the files of 687 Pensioners for 78.2% IDA pension revision with the directive to resubmit by deducting the extra increment already calculated for pension revision on 68.8%.The Secretary stated that she will examine the case.
The recently published book “P and T Trade Union Movement – A Saga of Struggle and Sacrifice” written by Com. V.A.N.Nambbodiri was presented to her which she appreciated much.