{"id":222250,"date":"2021-09-04T18:30:04","date_gmt":"2021-09-04T13:00:04","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=222250"},"modified":"2021-09-08T05:04:14","modified_gmt":"2021-09-07T23:34:14","slug":"pension-schemes-of-the-banking-sector","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/pension-schemes-of-the-banking-sector\/","title":{"rendered":"Pension Schemes Of The Banking Sector"},"content":{"rendered":"

By\u00a0Rusiripala Tennakoon<\/a>\u00a0\u2013<\/strong><\/span><\/p>\n

\"\"<\/a>

Rusiripala Tennakoon<\/p><\/div>\n

Some clarifications are required to dispel certain doubts about the Superannuation schemes (pension schemes) operating in the banking Industry today.<\/span><\/p>\n

The pension scheme came into effect as follows; <\/span>By his Award dated\u00a0 <\/span>29<\/i><\/b><\/span>th<\/sup><\/i><\/b><\/span> November,1956, W. Thalgodapitiya Esqr., Additional District Judge as the Arbitrator in District Court case No.685\/spl. recommended for the members of the Ceylon Bank Employees Union a pension scheme set out in the award to take effect from 1.4.56.<\/i><\/b><\/span><\/p>\n

On the question as to which workers the award applies his answer was that the award is binding on the two Unions, the Ceylon Bank Employees Union and the Commercial Banks\u2019 Union being the parties to the dispute referred to him for Arbitration by the Commissioner of labour, and will apply to all workers who are in the Ceylon Bank Employees Union. But as the banks are desirous of extending the benefits of the scheme to all employees they were free to do so.<\/i><\/b><\/span><\/p>\n

Basically it has to be a non-contributory scheme and should be in addition to all\/any other superannuation scheme that is in operation.<\/i><\/b><\/span><\/p>\n

The underlying principle was what is enunciated in the famous Sastri Award (india); viz: <\/i><\/b><\/span>\u201cthe target to be reached is taking the wage in the sense of total emoluments during service and in retirement which must be sufficient to enable a man in receipt thereof to maintain himself and his family in a fair and reasonable standard o comfort in relation to the nature of his occupation and the class from which he is drawn\u201d <\/i><\/b><\/span><\/p>\n

The pension formula in the award is\u00a0 <\/span>(n+5) x G\/ 60\u00a0 <\/span>which is explained as n=number of years of service; 5 is a additional bonus service period added and G= the gross salary at the time of retirement; the denominator 60 denoted the retirement age at that time. In the 1990s the CBEU leadership managed to better this formula\u00a0 <\/span>by changing the denominator to 55 instead of 60 on the grounds that the retirement age now has been reduced to 55 years for the benefit of Private Sector bank Employees entitled to the Award.<\/span><\/p>\n

During subsequent periods the bank pension Schemes underwent several changes virtually in disregard of the basic principles underscored in this historic Award.<\/span><\/p>\n

In the State Sector banks the scheme and the formula proposed in the award was amended to fall in line with the Public Servants pension scheme principles on the grounds that the State banks were organs of the Government. As a result the State bank Employees are entitled to a pension of 90% of the Total emoluments they are in receipt at the time of retirement. As the Salaries and Wages of State Bank Employees are determined according to Collective Agreements covering the Industry (private sector& State Sector both) the salaries and the scales are very high compared to the Public sector.<\/span><\/p>\n

In the Private sector banks from time to time due to various negotiations the managements managed to induce with the support of Union leaders, to usurp the pension Scheme which was introduced as a compulsorily binding scheme, tampering the original scheme, by obtaining individual consents. Hence in many private sector banks the scheme is not in operation.<\/span><\/p>\n

In the State Banks the metamorphosis undergone with changes from time to time arbitrarily manipulated has resulted in the pension schemes developing into white elephants becoming heavily burdensome to the banks. Some retirees, a significant percentage of the employees, are drawing very high amounts as pension many times bigger than even the average salary of a public sector employee as well as a significant contradiction to the No-pension right to a majority of the private sector bank employees. <\/span><\/p>\n

Other arbitrary and controversial changes effected to the scheme in the State Sector pension schemes, such as the denial of the full Cost of Living Allowance, which they were enjoying as an entitlement has brought in several anomalies causing highly disadvantages to the retirees, while the pension schemes have also produced a millionaire class drawing huge amounts as pensions in their retired life. An ordinary person or a public sector employee would jump up in alarm to hear that quite a number of State Bank employees are drawing pensions in multiples of 100.000s going up to amounts over\u00a0 <\/span>Rs 500,000\/= as their monthly pension.<\/span><\/p>\n

The spirit and the vision in that most humanitarian historic Award of that highly respected late District Judge appears to have been molested and prostituted over the passage of time.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

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