Pension issues in SBI -Trustees jurisdiction?


Appended is an important communique addressed to Alex Joseph by PPR Upadhyaya, himself an ex senior executive of State Bank of India, which adequately expatiates the role of the Trustees Board in the matters of requisite decions on pension issues an essentially needful area, more so as it amply supplements the views of the Supreme Court of India. I am fully aware of their fishy deals and anomalous roles and pointed them out several times in  my capacity as the then Director of the Bank’s Central Board. The relevant text is importantly of interest and to the retiree pensioners of the Bank and is a MUST READ for the readers:

5.9.2017

Trustees’ Powers to sanction Pension to SBI Employees.

I invite your attention to the observations, particularly those which have been highlighted, made by the Supreme Court in its judgment in D.S.Nakara &ors vs Union of India, which reads thus: “Summing-up it can be said with confidence that pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio-economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and therefore, one is required to fall back on savings. One such saving in kind is when you gave your best in the hey-day of life to your employer, in days of invalidity, economic security by way of periodical payment is assured. The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from service. Thus the pension payable to a Government employee is earned by rendering long and efficient service and therefore can be said to be a deferred portion of the compensation or for service rendered. In one sentence one can say that the most practical raison d’être for pension is the inability to provide for oneself due to old age.”

  1. However, SBI, ignoring that pension is compensation for loyal service rendered in the past by an employee, and a stated allowance or stipend payable by it from a kind of saving made by him through the best of service rendered by him/contribution he had made for the growth of the organisation, in his hey- day, has/had been making provisional/ad hoc payments to its retirees in lieu of pension payable to them as per SBI Pension regulations since 1987, i.e., for almost thirty years.SBI continues to  justify its treacherous misdeeds on the plea that payment of pension to its employees need the previous sanction from the Central Government (CG). SBI’s contention is not supported by fact since the Trustees are empowered to sanction pension as can be seen from Regulation 23 (6), which reads thus: “23 (6) No pension shall be paid to a member unless it has been sanctioned by the trustees under these regulations.” Further, the wide discretion vested with the Trustees can be inferred from the Regulation 23 (16), which reads,  “23 (16) (a) Notwithstanding anything contained in regulation 15 or sub-regulation (4) of regulation 23, in the case of a member against whom disciplinary proceedings under the Rules of Service applicable to him have been continued after he ceases to be in the Bank’s service or where, for the purpose of considering whether sanction for retirement should be granted by the Executive Committee or the Local Board, as the case may be, any investigation or enquiry in respect of any act committed by the member while in service has been initiated or continued by the Bank after he ceases to be in the Bank’s service, the member may be paid at the discretion of the Trustees a provisional pension of an amount not exceeding the maximum amount of pension which would have been admissible to such member under these regulations on the basis of qualifying service up to the date he ceases to be in the Bank’s service or if the member was under suspension on such date up to the date immediately preceding the date of such suspension.

(b) The amount paid as such provisional pension shall be adjusted against the amount of final pension if sanctioned on conclusion of such disciplinary proceedings or investigation or enquiry but no recovery of such amount shall be made if the member is ultimately dismissed from the Bank’s service and the retirement benefits are forfeited.

(c) If at any time in the opinion of the Bank, such member is found not co-operating with the conduct of such disciplinary proceedings or investigation or enquiry, the payment of the provisional pension may, at the discretion of the Trustees, be stopped.”                                                                                                    2.1. It is evident from Regulation 23 (16) that provisional pension/ad hoc pension is payable at the discretion of the Trustees only for retirees against whom disciplinary proceedings have been initiated.                                                         2.2. It is hard to reconcile that the Trustees having discretion [paragraph c of Regulation 23 (16)] to decide on payment of pension to members of staff facing disciplinary proceedings do not have discretion to pay pension to retirees, whose retirements were approved in the normal course.SBI should be asked whether it is aware of the Regulation 23 (16) and if the answer is in the affirmative, it should be asked whether disciplinary actions have been initiated against all the retirees from 1987 and if so SBI should be asked to state the nature of disciplinary action initiated against them. If SBI is unable to state the details of disciplinary actions initiated against the retirees, it should be asked whether it is fair on its part to deny payment of pension as per the provisions of SBIEPFR. SBI should also be asked how it proposes to compensate the surviving pensioners for the mental anguish and monetary loss the retirees had suffered despite the valuable and loyal service rendered by them in their hey-days and how it would compensate the family members of the deceased retirees, who have also been denied payment of family pension as approved by the Supreme Court in its judgment dated 23.2.1989.                                                     

 

  1. SBI might try wriggle out of the situation by stating that for fixing the ceiling of pension it has to refer to the Central Government. SBI’s defence should be demolished by stating a) that the ceiling of pension should have been as observed by the Supreme Court in paragraph 9 of its judgment dated 23.2.1989 but was violated intentionally by the Bank, and b), in the original regulation prepared by the RBI and approved by the Central Board of SBI, the ceiling of pension was 30/60thof the average of the last three years’ substantive salary, i.e.,  50% of the average of last three years’ substantive salary, which was changed to one-half of the average substantive salary drawn during last 12 months’ pensionable service with an outer ceiling of Rs.2400/- in the revised Pension-Plan submitted by SBI to the Supreme Court in connection with the Writ Petition(Civil) 305/1987 by the IBI Pensioners, an improvement over the first regulation. Any amendment which would be prejudicial to the first regulation made by the RBI, which was improved upon in 1987 by SBI is not permissible as per sub-section 4 of Section 50 of the ACT
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One thought on “Pension issues in SBI -Trustees jurisdiction?”

  1. Dear Shri Awasthi,

    Thanks. Could you kindly provide update on the pension related court case of pre-2002 SBI pensioners who have been reduced to penury condition due to the various anomalies ? I am a February 1999 retiree and fall in this category.

    Thanks and regards,

    Kapil Sopory

    Like

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