Family pension for bank staff hiked to 30 per cent of last pay

The central government has approved a proposal by the Indian Banks' Association (IBA) to increase the family pension of PSB employees to 30 per cent of last drawn salary. The other big announcement is an increase in the employer banks' contribution to the pension fund of employees under the NPS from the existing 10 per cent to 14 per cent.The immediate benefit of this approval will be an increase of 30,000 to 35,000 in the family pension of public sector bank employees from a maximum of 9,284 per month, depending on the last drawn salary of the deceased bank employee.
Earlier, both the employer and employee contributed 10 per cent each of basic salary. Now, the employer (bank) will contribute 14 per cent, while the employee will continue to contribute 10 per cent to the NPS.The announcements were made after Union Finance Minister Nirmala Sitharaman's two-day visit to Mumbai to review the performance of public sector banks.
Making the announcement on Wednesday, Debasish Panda, Secretary of Department of Financial Services (Ministry of Finance) said, "In continuation of the 11th bi-partite settlement on wage revision of public sector bank employees, which was signed by the IBA with the unions on November 11, 2020, there was a proposal for enhancement of family pension and also the employers' contribution under the NPS."Based on feedback received from banks, the additional cost on account of increased contribution to the NPS will be around 1,080 crore per annum for all public sector banks (PSBs).
A special dispensation will be sought from the RBI to allow said provisions over the next five years to avoid any immediate adverse impact on the balance sheets of the banks.A total of 10,11,756 employees, including retired employees, are covered under the pension system. Of these, 3,11,700 are serving employees and 5,65,977 are pensioners as of March 31, 2021 and the total number of family pensioners was 1,55,055.General Secretary of the All India Bank Employees Association (AIBEA), CH Venkatachalam, welcomed the announcement. Public sector bank employees had been waiting for it for a long time, he said.