One-Rank One-Pension For All Govt Bank Employees? Family Pension Can Be Introduced
A new one-rank, one pension (OROP) scheme is under discussion for the retired PSU bank employees, wherein everyone who retires in the same rank will get the same pension, no matter the date of the retirement.
The banks have also been asked to review and revise the family pension scheme where the pension for the spouse is equal to that of the government employee.
One Rank One Pension To Be Announced For Government Employees
The OROP pension scheme has been a demand made by the veterans of the armed forces. In this scheme, the pension given to the officers of the same rank is the same, regardless of the date of retirement.
Finance Minister Nirmala Sitharaman has told the banks to do more for employees who have retired earlier in order to ensure that there is no discrimination in terms of pension. She was speaking at the IBA’s 73rd annual general meeting, which was attended by bank chiefs, including IBA chairman Rajkiran Rai.
The family pension scheme has also been asked to be reviewed by the government so that the pension for the spouse is the same as that of the government employee. The family pension scheme will most likely be announced when the Indian Banks’ Association (IBA) is scheduled to unveil the 11th bipartite wage settlement.
Why Should Pension Scheme Be Updated?
As of now, a bank employee who has retired in the 1990s gets much less pension as compared to that of a recently retired employee. The reason behind this is that the pension is linked to the last drawn basic salary, which was Rs. 10,000 highest in the 1990s.
In order to remove this difference, the pension scheme should be updated by the banks. A defined benefit pension should be given to all the employees who retire between 1986 and 2010.
In order to revise the family pension scheme, there will be an upfront cost that the banks will have to bear. Funds must be maintained by the banks in order to meet future pension liability. This also requirement keeps increasing even as interest rates fall and life expectancy increases without any actual modification to the pension scheme.