Method of Pension calculation for Bank employees/Officers

Employees/Officers joining Banks on or after 01.04.2010 will be covered under the New Pension Scheme. Hence, they are not eligible for pension schemes under Bank [Employees’] Pension Regulations 1995.  The Bank employees/Officers who have opted for pension schemes under Bank [Employees’] Pension Regulations 1995 are only eligible for the regulatory pension of a bank.

A retiring employee/officer of the bank is eligible for a grant of the full amount of pension in accordance with the provisions of the Service Regulations or Settlements after completing a qualifying service of not less than thirty-three years. The amount of basic pension shall be calculated at fifty percent of the average emoluments (reckoning basic pay drawn during the last ten months of the employees’ service in the Bank).  Basic pay includes Stagnation Increment if any; and all allowances counted for the purpose of contribution to the provident fund such as Professional Qualification Pay, Increment component of Fixed Personal Pay, and Officiating allowance.

Proportionate pension:

In case of an employee retiring before completing a qualifying service of thirty-three years but after completing a qualifying service of ten years, the amount of pension shall be proportionate to the amount of pension admissible under sub-regulations (2) and (3) of pension regulation and in no case, the amount of pension shall be less than the amount of minimum pension specified.

For example, an employee/officer retiring after completion of thirty years of qualified service will get a proportionate pension of 30/33 of the amount of pension applicable to 33 years of service.

Pension on Voluntary Retirement:

On or after the 1st day of November 1993, at any time after the an employee has completed twenty years of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority, retire from service.The notice of voluntary retirement shall require acceptance by the appointing authority. Where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period. However, with effect from 1st day of November, 2000, pension shall also be granted to an employee who opts to retire before attaining the age of superannuation, but after rendering service for a minimum period of 15 years in terms of any scheme that may be framed for such pension by the Board with the approval of the Government.

Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.

Dearness relief:

Dearness relief will be granted to all types of a pensioner in accordance with the rates as per All India Average Consumer Price Index for Industrial Workers in the series 1960= 100, announced by the Labour Bureau, Government of India.  Dearness relief is allowed to full basic pension even after commutation. The Dearness Relief to pensioners will be revised twice a year (February to July and August to January) on the basis of the quarterly average of retail inflation index numbers for industrial workers as per a pre-determined formula.

Commutation of Pension:

An employee shall be entitled to commute for a lump sum payment of a fraction not exceeding one third of his pension. : In respect of the family of a deceased employee who is governed by subregulation (5) of regulation 3, of Pension Regulations, shall also be entitled to commute for a lump sum payment of fraction not exceeding one-third of the pension admissible to the employee. While commuting a fraction of basic pension an employee shall indicate the fraction of pension which he desires to commute and may either indicate the maximum limit of one-third pension or such lower limit as he may desires to commute. The fraction of commutated pension in Rupee is ignored for lump sum payment.  Click here to calculate the lump sum payable on the commutation of pension.

Counting of qualifying Service:

All leave during service in the bank for which leave salary is payable shall count as qualifying service.  The period spent by an employee on training in the Bank immediately before his appointment shall count as qualifying service. However, extraordinary leave on loss of pay shall not count as qualifying service except when the sanctioning authority has directed that such leave not exceeding twelve months during the entire service, may count as service for all purposes including pension. An employee who served without interruption as a permanent employee in another bank to which Pension Regulations apply, and permanently transferred to the present bank on a merger, amalgamation, shall qualify for the pension as applicable to other permanent employees of the bank.

Broken period of service of less than one year:

If the period of service of an employee includes a broken period of service is less than one year, then if such broken period is more than six months, it shall be treated as one full year of service for calculation of basic pension and if such broken period is less than six months it shall be ignored.

Addition to qualifying service in special circumstances:

An employee appointed for a post in the bank for which postgraduate research, or specialist qualification or experience in scientific, technological or professional fields, is essential; and to which candidates of an age exceeding the upper age limit specified for direct recruitment are normally recruited; for which the candidate was given age relaxation over and above the maximum age limit fixed by the Bank on account of his possessing higher qualifications or experience, is eligible for adding one-fourth of the length of his service or the actual period by which his age at the time of recruitment exceeded the upper age limit specified by the Bank for direct recruitment or a period of five years. This entitlement is not admissible/ available to other class of pensions or to an employee unless his actual qualifying service at the time he quits the service in the Bank is not less than ten years.

Pension in respect of a part time employee:

Employees who were employed on scale wages and on a permanent part-time basis in the service of bank and were contributing to the provident fund, such service rendered by them on a permanent part time basis from the date they became a member of the Provident Fund shall be counted as qualifying service. In respect of a part time employee who was/is initially recruited on a lower scale wage and later fitted on higher scale wages including full scale wages, the length of qualifying service shall be determined as under:

Six hours or more but upto 13 hours: Length of corresponding service will be one third of a year

More than 13 hours upto 19 hours: Length of corresponding service will be one half of a year

More than 19 hours but upto 29 hours: Length of corresponding service will be three fourth of a year

More than 29 hours: Length of corresponding service will be one year

In respect of part time employees who continue to be in the same scale wages since their recruitment, for the purpose of calculating the amount of pension, the actual service put in shall be taken as qualifying service. In such cases the actual pay drawn on scale wages at the time of retirement shall be reckoned for the purpose of average emoluments.

Military Service:

An employee who has rendered military service before appointment in the Bank shall continue to draw the military pension, if any, and military service rendered by the employee shall not count as qualifying service for pension

Period of suspension:

The period of suspension of an employee pending enquiry shall count for qualifying service where, on the conclusion of such enquiry he has been fully exonerated or the suspension is held to be wholly unjustified, and in other cases, the period of suspension shall not count as qualifying service unless the Competent Authority passing the orders under the Service Regulations or Discipline and Appeal Regulations or Settlements governing such cases expressly declares at the time that it shall count to such extent as such authority may declare.

Intrruption in the service:

An interruption in the service of a Bank employee entails forfeiture of his past service, except in certain cases like an authorized leave of absence.  However, in the absence of a specific indication to the contrary in the service record, an interruption between two spells of service rendered by a bank employee shall be treated as automatically condoned and the pre-interruption service treated as qualifying service

Period of deputation to an organization in India:

The period of deputation of an employee to another Organization in India will count as qualifying service if the organization to which he is deputed or the employee pays the pensionary contributions at the rates specified in sub-regulation (a) of pension regulation 7 of these Regulations or at rates specified by the Bank at the time of deputation, whichever is higher to the Bank.

Commercial employment:

If the pensioner takes up any commercial employment before the expiry of two years from the date of his retirement without the prior permission of the bank or commits a breach of any condition subject to such permission to take up any commercial employment, payment of his pension may be withheld. The commercial duties will be such that his previous official position or knowledge or experience under bank could be used to give the proposed employer an unfair advantage. For example, setting up practice as an advocate or consultant is ‘commercial employment’ for which prior permission of the bank is necessary.