Government enhances pension scheme for public-sector bank staff

Union Finance Minister Nirmala Sitaraman has announced revisions in the pension scheme for public-sector bank employees.

With the new changes, the Government has lifted the ceiling on family pensions and increased the banks’ contribution to the National Pension Scheme (NPS), from 10 to 14 per cent. Earlier, the scheme had slabs of 15, 20 and 30 per cent of the pay of the pensioner. There was a cap of Rs 9,284.

As per a government statement, the alterations in the scheme will benefit thousands of families of public-sector bank employees.

With the enhanced family pension scheme, the families of deceased public-sector bank employees will be eligible for a pension equivalent to 30 per cent of the last salary drawn by the deceased employee. The additional burden of the scheme will be borne by the banks.

Under the revised NPS, banks will also be responsible for contributing 14 per cent of the salary of their current employees to their retirement corpus.

The scheme is in continuation to the 11th bipartite settlement signed by the banks and unions, addressing wage revision.

Further, employees who have been working with the banks before 2004 will be eligible for a defined pension scheme, wherein the monthly pension will be calculated on the basis of a pre-set formula based on their last-drawn salaries.

Those who have joined after 2004 will be a part of the NPS wherein the employees and the banks contribute towards a retirement corpus.