Govt in a fix on SBI pension policy

Staff seek hike under existing defined benefits against a proposed defined contribution system.

The strike by the SBI employees for a hike in pension has become a policy headache for the government. While the government wants to implement a defined contribution system, the employees want a hike under the existing defined benefit system.

"We are meeting Chief Labour Commissioner SK Mukhopadhyay tomorrow. The government has been neglecting this issue for 14 years. Pension for SBI employees has not been brought on a par with other PSU bank staff despite the recommendations of the State Bank of India and Indian Bankers' Association," GD Nadaf, secretary, Association of State Bank of India Officers Federation said.

While the IBA said it was not involved in the matter, the Reserve Bank of India, which is the majority shareholder, said it had not made any recommendation for a hike.

The case is scheduled to come up before the Delhi High Court tomorrow. The Court has asked the federation and the government to submit the relevant correspondence.

As SBI is governed by a separate Act, the pension was not increased when a new scheme was negotiated for other public sector banks in 1992-93.

With the government working towards a defined contribution system for its employees, under which the pension amount is based on market returns, it is not in favour of a hike under the present system.

The fact that SBI employees have a contributory provident fund unlike other PSU banks is another argument the government has put forward to the employees' federation.

"Even if you consider the 10 per cent contribution to PF, the SBI employees get far less than other bank employees. While in SBI's case, the pension is capped at Rs 4,250 per month for up to section VI employees and Rs 5,600 for up to the deputy managing director level, other banks get 50 per cent of their basic salary as pension, without any cap," Nadaf said.

Further, family pension at SBI is capped at Rs 1,000 per month while in the case of other PSU banks, it is 1/3rd of pension, without any limits.

"While other banks have service gratuity which can go up to Rs 7 lakh for a general manager, in case of SBI employees, it is capped at Rs 3.5 lakh, under the Gratuity Act," Nadaf said.

A federation official said the government was trying to postpone resolution of the issue due to elections in four states and the fact that the SBI chairman's tenure is coming to an end in May.