Bank employees' family pension to rise to 30 per cent of last pay drawn: Ministry of Finance

Nirmala Sitharaman. Pic/Pallav Paliwal

Central government on Wednesday approved the Indian Banks' Association's (IBA) proposal to increase the family pension to 30 per cent of the last salary drawn, in order to provide relief to families of bank employees.

In an official statement, the Ministry of Finance said that this move would make family pension go up to as much as Rs 30,000 to Rs 35,000 per family of bank employees. This was announced by Debasish Panda, Secretary, Department of Financial Services (DFS), Ministry of Finance, at a press meet addressed by Union Finance Minister Nirmala Sitharaman in Mumbai today.

Secretary, DFS informed that 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 National Pension Scheme.

This has been approved by the Finance Minister, he said. Panda further said that "earlier the scheme had slabs of 15, 20 and 30 per cent of the pay that a pensioner drew at that point of time. It was capped subject to a maximum of Rs 9,284.

That was a very paltry sum and Finance Minister Sitharaman was concerned and wanted that to be revised so that family members of bank employees get a decent amount to survive and sustain." The Government has also approved the proposal to increase employers contribution under the New Pension Scheme to 14 per cent from the existing 10 per cent.

Thousands of families of PSU bank employees will be benefited by the enhanced Family Pension, while increase in employers contribution will provide increased financial security to the bank employees under the National Pension System (NPS).

Finance Minister, as part of her two-day visit to Mumbai reviewed the performance of the public sector banks and launched EASE 4.0 reform agenda for smart banking.

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