One Crore – You May Gain or Lose – New Pension Scheme for Bank Employees

NPS ( New Pension Scheme )  is applicable from 2004 for Government Employees and majority of the State Governments have implemented the same.   However our Leaders dragged it till 2010, and from then on it is applicable for all  Public Sector Bank Employees recruited after 2010.

Now let’s see what NPS is all about to start with there are 7 fund managers to manage our NPS funds.

HDFC Pension Management Company Ltd.ICICI Pension Fund Management Company Ltd.Kotak Mahindra Pension Fund Ltd.LIC Pension Fund Ltd.Reliance Capital Pension Fund Ltd.SBI Pension Funds Pvt Ltd.UTI Retirement Solutions Ltd.

Tier I :  This is the compulsory contribution from each individual and also the matching grant from employer ( In case of Bank Employees the contribution towards NPS is 10% of Basic and DA and an equal contribution from Management )

Tier II : Its purely voluntary in nature. You have option to invest over and above compulsory contribution.

Further, Each Tier has 3 different Assets to be invested in

E:  EQUITY  ( Max 50% of available funds )

C: Corporate Bonds

G: Government Securities

And each Subscriber can choose Fund Manager and also the asset class ( Active Choice )to be invested in. But fortunately or unfortunately this option is not yet provided to members. Only Auto Choice is provided.

Auto Choice for different employees is as follows

For Central Government  Employees:  Funds collected from subscribers are allotted to three Public Sector Pension Fund Managers i.e  SBI, UTI and LIC.

For Corporate Employees ( Including Public Sector Bank’s) : Government has given a choice to the  banks to decide investment choice either at subscriber Level or at the Bank level on behalf of all the employees.  Even the allocating the funds amongst the three asset classes can be decided by the bank.

Now here is the catch, nobody so far bothered to know where the funds are invested, which fund house is managing them, in which asset class they are invested in  and which fund house has given the best return.

We should admit that we as bankers are poor in managing our own personal finance, but this NPS invest has to be taken seriously.

Let’s analyze the maturity value at different ROI.   Assuming that contribution of Rs.3000/- ( And another 3000/- contribution by the bank ) is made towards NPS the following are the different scenarios

                                                                                                                      Amount In Lacs

                                                                                                        Remaining years of Service ( Contribution to be Made )

ROI25 Years30 Years35 Years8%568913610%7913422412%111206377

As you can see a 2% increase on investment is more than  one Crore for a 25-year old employee.  Further,  the longer you work in the bank the more fund you can accumulate.  This is called the power of compounding.

The detailed performance of each fund house is as follows

Under Tier I Scheme E Click here Tier I Scheme E-I

Under Tier I Scheme C Click here Tier I Scheme C-I

Under Tier I Scheme G Click here Tier I Scheme G-I

Summary of performance Since Inception

 SBILICUTIICICIRELIANCEKOTAKHDFCEquity11.4—13.9614.6813.3812.80—Corporate11.5—9.7511.259.4411.2—Government10.44—8.779.118.408.71—

Total Assets managed by each fund is as follows

 SBILICUTIICICIRELIANCEKOTAKHDFCTOTALEquity3764234129262616649Corporate260252286161911439Government526203398232513738 TOTAL FUNDS116287893136570401826

Majority of the funds are managed by SBI Pension Fund and Majority of the contributions are parked in Government Securities.   We can simply assume that safety is the first priority.

Just analyze your NPS statement and compare your returns with other fund managers.   If your fund is under performing put pressure on your bank to change the fund manager or demand for Active Choice instead of Auto Choice.

Unions and associations have to play a Major Role in this.  Educate the Young Lot.   Just one bad decision can make their  fund shrink from  3.77 cr to 1.36 cr.

NPS is the one of your prime investment take care of it.  Spend some time to discuss and take wise decisions.

Just one bad decision by bank employees by not opting for Pension has cost us one Bipartite.  All the Best.

Meeting for Finalisation of Pay Structure

UFBU internal meeting on 8th May 2015 with regard to finalisation of pay structure and submit their views to IBA.   On 12th May 2015 UFBU will meet IBA.

DA for May 15 - Jul 15

AIBEA Circular Dated 18.03.2015

Discussion held with IBA on 17.03.2015

ALL INDIA BANK EMPLOYEES' ASSOCIATION
Central Office: “PRABHAT NIVAS”
Regn. No.2037Singapore Plaza,
164, Linghi Chetty Street,
Chennai-600001
Phone: 2535 1522, 6543 1566
Fax: 4500 2191, 2535 8853
e mail : chv.aibea@gmail.com & aibeahq@gmail.com 

CIRCULAR NO. 27/97/2015/8 18th March, 2015

To ALL UNITS AND MEMBERS :

Dear Comrades,

DISCUSSIONS WITH IBA Units and members are aware that our charter of demands includes demands on improvement in various service conditions apart from increase in wages. Prior to the signing of the Minutes of Discussion on 23-2-2015, there were two rounds of discussions with the IBA on these issues. Yesterday i.e., on 17.03.2015, one more round of discussions took place, during which understandings have been reached on the following issues :

1) ENCASHMENT OF LEAVE: The benefit of encashment of Privilege Leave will be available even in the cases of resignations from the Bank after 20 years of service as well on loss of job due to punishments (other than cases of punishment of Dismissal and cases where there is loss to the Bank).

2) LEAVE: The present stipulation that Casual Leave (CL) upto 4 days can be availed continuously provided the total absence including Sundays and holidays does not exceed more than 6 days would be deleted.

3) Presently Unavailed Casual Leave (UCL) can be availed for a day without production of medical certificate. In addition UCL may be availed without production of medical certificate for 4 days at a time once in a year or 2 days at a time twice in a year.

4) Privilege Leave (PL) can be availed on 4 occasions in a year (as against 3 occasions at present).

5) 15 days’ Notice would be sufficient to avail Privilege Leave (as against 30 days’ notice at present).

6) Privilege Leave can be accumulated upto 270 days (as against the existing ceiling of 240 days). However, encashment upto 240 days would continue as at present.

7) Special Sick Leave with Salary for a maximum period of 30 days would be sanctioned to an employee while on hospitalisation for donation of kidney or any organ.

8) Maternity Leave, within the overall entitlement, would be granted for 60 days (now 45 days) in the case of hysterectomy. 

9) Maternity Leave for legal adoption of a child would be 6 months (now 2 months) 

10) The above facility of Maternity Leave would also be available to a biological mother in cases where the child is born through surrogacy.

11) Part time employees would also be entitled to Maternity Leave under (h) and (i) above.

12) Paternity Leave would be extended on the lines of Government employees i.e. 15 days at a time on 2 occasions. 

13) Study Leave upto 2 years would be sanctioned to workmen employees as available to officers.

14) Sabbatical Leave for women employees would be extended on the lines of government guidelines.

15) Sabbatical Leave for male employees would be referred to the Government for consideration.

16) Extraordinary Leave (without Pay) would be sanctioned upto a max. of 720 days during the entire service (as against the existing ceiling of 12 months).

17) Special Casual Leave for absence due to curfew would include exigencies like riots, prohibitory orders, natural calamities.

18) Special Leave for Sports activities, trekking, mountaineering, etc, would be dealt with at each Bank level.

19) INTRODUCTION OF LEAVE BANK:
System of Leave Bank would be introduced by which employees can voluntarily donate a part of their entitled leave to a common pool from out of which leave with salary would be sanctioned to employees who are compelled to be on prolonged leave due to treatment of major diseases/accidents and other contingencies beyond their control and where such employees have exhausted all their leave.

20) Diem Allowance: Diem Allowance payable while on travel on duty would be revised upwardly and quantum would be finalised in the next meeting.

21) When employees travel on duty to another station and stay in a hotel, the room rent would be reimbursed; the eligible rates would be finalised in the next meeting.

22) Transportation of goods while on transfer: An employee while on transfer from one station to another can transport his personal effects by train or road (even if the places are not connected by train) upto the stipulated weights by an IBA approved Transport Operator. 

23) Compensation for Breakages: Compensation for losses due to breakages or damage to goods while transporting would be reimbursed as under:Existing amount To be revised asClerk Substaff Clerk SubstaffOn production of receipt 1120 745 1500 1000Without receipt 745 560 1000 750

24) Travel on Duty/on transfer:Existing To be revised asNon-Subordinate employees 1st class AC 2 TierSub-ordinate employees 2nd class AC 3 tier

25) Dependents’ Income Criteria: Income limit to define a dependent would be Rs. 10,000/- per month (as against the existing Rs.3,500/- p.m.)

26) Pension for part time employees: The entire service period would be taken for arriving at eligible pension instead of pro-rata service.

Important issues like construction of revised Pay Scales, revised DA formula, HRA rates, Transport Pay, introduction of Grade Pay, revision of Special Pay, LFC, revision in other allowances, retirees’ issues, etc. and other issues/ demands would be taken up for discussions in the subsequent rounds of meetings. 

Further development on these issues will be informed to members in due course.