Bank staff's family pension, employer’s share in pension fund hiked

Mumbai: In a big relief for nearly 1,25,000 family pensioners in the banking sector, finance minister Nirmala Sitharaman Wednesday approved the Indian Banking Association’s proposal to increase the family pension of a deceased bank employee to 30% of the last salary drawn by him or her.

The move would make the family pension of banking sector employees to go up to Rs 30,000 to Rs 35,000 per family as against a maximum family pension of little over Rs 9,000 at present. The decision was announced by Debasish Panda, secretary in the department of financial services, in Mumbai.

The new provision will come into effect retrospectively and it will be implemented from April this year.

Panda, who accompanied finance minister in her two-day Mumbai visit to review the functioning of public sector banks, told reporters that the decision was in continuation of the 11th bi-partite settlement on wage revision of public sector bank employees, which was signed by the Indian Bank Association (IBA) with the bank unions in November last year.

Bank employees’ family pension increased

The proposal for enhancement of family pension and the employers' contribution under the National Pension Scheme was part of the bipartite settlement between the bank management and worker unions and officer associations.  

Earlier the scheme had slabs of 15%, 20% and 30% of the pay that a pensioner was drawing at the time but it had a ceiling of maximum 9,284 rupees.  

“That was a very paltry sum and the Finance Minister was concerned and wanted that to be revised so that family members of bank employees get a decent amount to survive and sustain,” Panda told reporters in Mumbai.

Bank’s NPS contribution hiked by 40%

The Government has also approved the proposal to increase employer’s contribution under the New Pension Scheme to 14% from the existing 10%. 

“It’s an increase of 40%,” Panda said.

“Thousands of families of PSU bank employees will be benefited by the enhanced Family Pension, while an increase in employers' contribution will provide increased financial security to the bank employees under the New Pension Scheme,” said the government.

Reporting by Krishnanand Tripathi, Deputy News Editor, ETV Bharat