November 29, 2009

INDIA: Public sector banks' 332,000 employees now eligible for pension

. MUMBAI, Maharashtra / Business Standard / Banking & Finance / November 29, 2009 Banks and unions yesterday agreed to make 332,000 serving and retired employees eligible for pension, besides settling on a 17.5 per cent hike in the salary of 702,000 public sector employees. State Bank of India employees association representatives, however, walked out of the wage settlement. The pension scheme would result in an outgo of Rs 6,000 crore (One crore = 10 million). This is the second pension option for public sector banks and would cover 272,000 serving employees and 60,000 employees who did not opt for the scheme in 1993 and have since retired. Those who join public sector banks from April 2010 would be covered by the New Pension Scheme with 10 per cent of their basic salary and dearness allowance deducted as their contribution. Banks would make a matching contribution. With public sector bank employees eligible to receive a defined benefit pension equivalent to 50 per cent of their last salary drawn, State Bank of India unions said they were at a disadvantage since they only received 40 per cent of the last salary drawn in the form of pension. Other banks, however, pointed out that apart from the pension benefit SBI employees were eligible for provident fund and gratuity, which was not available to the employees of the six State Bank associates.[rc] To read the full news report, click here Copyright: Business Standard Ltd.