Fighting to hike pensions

The recent strike by the State Bank of India employees underlines the disturbing inequalities in pension benefits in the private and public sectors. Shubha Khandekar investigates.

In early April, over 2 lakh employees of the State Bank of India (SBI) — which serves 30 per cent of the country’s banking customers across 9,000 branches — went on strike to demand a hike in pension. During the week-long strike, some 50,000 cheques got piled up for clearance; people whose salaries and pension accounts are with SBI faced hardships; and the entire banking industry was thrown into disarray.

The government’s main worry was that if it acceded to  their demand, employees of other nationalised banks would start asking for the same. The government did give in finally, raising the cut off point for pension from Rs8,500 to Rs21,800. Those drawing a salary less than Rs21,800 will now be entitled to pension that amounts to 50 per cent of their income. Those with an income above Rs21,800 will be eligible for 40 per cent.

In the meantime, UTI Mutual Fund recently launched a scheme that gives lifelong pension cover to members of the Shree Mahila Seva Sahakari Bank.

These women earn an average annual income that is less than that of an SBI retiree’s monthly pension. The Cricket Board of India recently extended the cut off date of pension benefit for test cricketers from 1975 to 1993. This makes several cricketers eligible for lifelong pension that ranges from Rs25,000 to Rs35,000 per month.

Also, thanks to sustained efforts by women’s organisations, the Maharashtra government is considering introducing a bill that will give 14 lakh women working as domestic help, the status of workers. They will also be ensured lifelong pension.

The issue
The SBI employees’ claim that the bank is in a position to pay higher pension must be verified by transparent evaluations of pension liabilities conducted annually.
There are gross inequalities in the banking sector and the public sector as far as pension benefits are concerned. Discrepancies also exist in pension benefits offered to organised and unorganised sectors.
Union activism by employees of important institutions can increase the hardships of those who receive benefits from that institution.
The government’s move to hand over pension funds to private players under the New Pension Scheme is causing anxiety.

Recommendations
All senior citizens must be entitled to old age pension. No one should remain uncovered.
The government should take steps to reduce the huge pension disparities in the public and private sectors, the banking sector, and the organised and unorganised sectors.
Pension amounts should be upgraded for the vulnerable sections of society to a basic minimum, so they have enough resources to lead a life of dignity and self-respect.

Voices
"The government wants to outsource pension servicing to private agencies by handing over to them the pension corpus consisting of thousands of crores of rupees. This must be resisted at all costs."
—SR Kulkarni, general secretary, All India Central Bank Retirees Federation

"In India, one is fortunate to be employed and to get pension cover. With a limited income, a senior citizen can survive only on interest from investments. While the government has reduced the rates of interest, pension has remained constant and prices only continue to shoot up."
—MP Namjoshi, retired deputy chief officer, Central Bank of India

"When the cost of survival is ever-increasing, pension is the only source of income for retirees. The government must upgrade the pension amount so that elders can live with their families and in society with self respect."
—Dinesh Shroff, general secretary, Central Bank Employees Union, Kandivli