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Pension Commutation for Bank Employees to be Refunded After 10 Years
Bank retirees, who have opted for pension are eligible for commutation of pension up to 1/3rd of their basic pension. A mere calculation basing on today’s interest rate, would throw light on this subject that the recovery of commuted portion would end up in 11 years. There is no legal sanctity to recover the same beyond that period.
Author: N Rajagopal
Published: July 16, 2024
The recent interim judgment by the Honourable High Court of Punjab and Haryana, Chandigarh in CWP – 14058 filed by M/s Chander Mohan Tandon and others as Petitioners versus Union of India and Union Bank of India as respondents is a landmark judgment that was delivered on 31 05 2024.
The said Civil Writ Petition 14058 of 2024 sought to quash clause 41(4) and 41 (5) of the Union Bank of India Pension Regulations, 1995 dated 29 09 1995 being contrary to the interests of the retired bank employees as the commuted amount of pension is being recovered in just 11 years and 2 months as per the interest rate formula but the same is continued to be recovered by the respondent bank till 15 years.
The said court had through its interim order directed the Union Bank of India to stay recovery of commutation amount from the petitioner & several others who have completed 10 years of retirement or above. The next date of hearing is posted for 21st August 2024.
Acting upon this judgment, the Union Bank of India came out with a letter to all the petitioners to this case on 29 06 2024, informing of stoppage of recovery and restoration of full pension. This is a welcome step, with a rider that the commuted pension released to these pensioners will be recovered depending upon the outcome of the final verdict.
It is also a notable intervention by the All India Bank Retirees Federation as the organization sought with IBA vide their letter dated 08 07 2024 asking IBA to direct all the member banks to stop further recovery in all cases who have completed 10 or more years of retirement in compliance of general stay granted to all the pensioners who are covered under above referred group.
Bank retirees, who have opted for pension are eligible for commutation of pension up to 1/3rd of their basic pension. A mere calculation basing on today’s interest rate, would throw light on this subject that the recovery of commuted portion would end up in 11 years. There is no legal sanctity to recover the same beyond that period.
It is the expectation of the bank retirees that the UFBU intervenes expeditiously in this regard and finds a lasting solution so that there is no recovery of commuted pension amount beyond 11 years.
[ This write-up has been originally published in bankworkersunity ]