AIBOC CIRCULAR NO. 147 DATED 29TH OCTOBER 2010

AIBOC issued its circular No. 147 dated 29th October 2010 on introduction of new pension scheme. We are reproducing the same here for our readers.

CIRCULAR NO: 147                                         29TH OCTOBER, 2010

TO ALL AFFILIATES/MEMBERS:

NEW PENSION SCHEME – INTRODUCTION

Our members are aware that, the New Pension Scheme will be effective from 1st April 2010.  The employees who are recruited after this date will become members of the New Pension Scheme introduced by the Banks as per the understandings reached between the UFBU and the IBA at the time of settling the 2nd option on Pension in the industry.  As we were busy in ensuring the speedy implementation of this agreement, we could not take up the issue of details on New Pension Scheme.  We have to-day sent a communication to IBA on the subject.  A copy of our communication is enclosed.

All our affiliates/members are requested to await further developments in the matter.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No.1410/356/10                                                      Date: 29.10.2010

To,

The Chairman,

Indian Banks’ Association,

MUMBAI.

Dear Sir,

NEW PENSION SCHEME

The agreement on 2nd Option on Pension included New Pension Scheme with effect from 1st April 2010 as one of the conditions in the Banking Industry.  The Confederation was busy in regard to the follow-up and implementation of the 2nd Option. In the meanwhile, the recruitments, which took place with effect from 1st April 2010, was made subject to the introduction of the New Pension Scheme.

The provision in regard to the introduction of the New Pension Scheme has omnibus clause generalizing the understanding that the New Pension Scheme will be introduced in terms of the Scheme under the Pension Fund Regulatory and Development Authority of India.  We were expecting a separate meeting on the issue and the finalisation of the guidelines to be issued to the banks by the Indian Banks’ Association to ensure that the interest of the workforce in the Banking Industry is protected and the Pension Scheme is properly administered. The members of our organisation want to know the various features of the scheme and the procedure for its implementation in the Banks.

We have gone through the New Pension scheme framed under the PFRDA. The implementation of the Scheme in Banks requires the completion of several formalities. Since, the scheme is concerning a Social Security measure of an employee who will be staying life time in the organization and would like to fall back on the scheme for his livelihood on superannuation, it is a sacred duty of all of us to ensure that, there is total comfort to our workforce in joining the scheme and protecting the social security measure. The scheme is still a nascent one. We understand that the Central Government and their Departments are taking several precautions to ensure that the money collected, invested properly and the administration of the fund is a secured one.  Some of the requirements for the introduction of the scheme, is as follows:-

a)       Formulation of appropriate guidelines by the institutions and conveying the same to their employees.

b)       The appointment of Central Record Keeping Agency to look after the details of the collection and its transfer to the Pension Fund Managers;

c)       Choosing of the Pension Managers, the sharing of the information about the various schemes as per the Government guidelines;

d)       The payment of interest/income on the fund collected from the members and contributed by the institution until the funds are properly invested with the Pension Managers etc.,

There are several other conditions that required to be fulfilled. The Government of India has decided that, until the scheme takes off and appropriate authorities are appointed, they have made the Central Pension Payment Office responsible for the management of the scheme in the interregnum period.  It is in this background, we are of the opinion that the IBA should play its role to ensure appropriate comprehensive guidelines are issued, after holding detail discussions with the Confederation.

We therefore request you to kindly fix-up an urgent meeting on the subject to draw up an action plan and issue the detailed guidelines. In the meanwhile, we would request you to kindly ensure that the contributions collected from employees as well as the employers are properly deployed to ensure that the members are not put to loss of interest on the funds accumulated.

Please treat the matter as urgent.

Thanking you,

Yours faithfully,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY