Family pension: A look at how many bank employees will benefit

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With the Union government accepting a key issue raised by the banking fraternity, as many as 11 lakh bank employees of the country stand to benefit since their family pension has been hiked to 30% of their last drawn salary. This decision will have a salutary effect especially for the families of more than 1,000 bank employees who died of Covid.

The change

The immediate benefit of this hike will be an increase between Rs 4,000 and Rs 32,000 in the family pension of public sector bank employees depending upon the category the employee belonged to and the last drawn salary.

Generally, bank employees are categorised into three different categories, namely sub staff, officer and general manager, according to IBA.

The current family pension of a sub-staff is around Rs 6,781 per month, for an officer and general manager it is Rs 16,973 per month, which is a very small amount when you consider the cost of living nowadays, said an IBA member.

After the government approved IBA’s request, the new family pension would be Rs 10,791 for sub staff, Rs 24,474 for an officer and Rs 49,455 for a general manager-ranked officer. The hike is around 59%, 44% and 191% respectively for three different categories.

“Earlier the scheme had slabs of 15%, 20% and 30% of the pay that a pensioner drew at that point of time, and it was capped subject to a maximum of Rs 9,284 without other allowances. That was a very paltry sum and the finance minister was concerned and wanted it to be revised so that family members of bank employees get a decent amount to survive and sustain,” said Debashish Panda, secretary, Department of Financial Services.

Additional benefit

The government also hiked the contribution of public sector banks for employee pensions under NPS to 14% from 10% earlier. An increase in employer’s contribution will provide increased financial security to the bank employees under the NPS, said IBA.

“In continuation of the 11th tripartite settlement on wage revision of public sector bank employees, which was signed by the IBA with the unions on November 11, 2020, there was a proposal for enhancement of family pension and also the employers’ contribution under the NPS. This has been finally approved by the Finance Minister and put in place,” added Debashish Panda.

Union’s version

“It was our demand since 2019. Even in the tripartite meeting in November 2020 IBA, union and bank management also signed it. At last, the government has approved it. But it will take another 3-4 months to get the benefit,” Rajen Nagar, president, All India Bank Employees Association told Money9.

“We had placed more demands before earlier governments. But this government is not willing to listen to us. They are planning to sell off all PSB’s and our fight will last till the last breath,” added Nagar.

“The government’s decision is welcome but it is not enough. There is a lot more to do. The government should try to keep the banks alive and performing,” said Pradip Biswas, vice president, Bank Employees Federation of India.