Are PSU Bank Employees Losing Pension Benefits Due to Service Tenure Rules? Seeking Legal Insights

Hi, like me, there are many bank employees who have joined PSU banks through lateral recruitment, with prior experience in PSU banks. Before joining the current PSU bank, we were covered under our previous bank's Pension Regulation, 1995, and had served the previous bank for many years, say 8-10 years. Now, after joining the current bank, we are again covered by our current bank's Pension Regulation, 1995 (our current joining is prior to the implementation of NPS). However, if we want to opt for VRS, only the current tenure is taken, excluding our previous tenure in another PSU bank.

The Disconnect

If we want to take VRS, then a minimum continuous period of service must be 20 years for availing the pension facility (which also includes family pension). Now, in this case, we would not get a pension if we opt for VRS since the length of service in the current bank is less than 20 years; however, if we add the experience of the previous PSU bank, then the length of service exceeds 20 years.

Our Argument

We all have served the same government, i.e., the Government of India, and the Pension Regulation 1995 for bank employees is the same across all the PSU banks, only the prefix changes, i.e., the name of the particular bank changes before the Pension Regulation. Then why is this discrimination? Our earlier years of service are wasted, and there is no weightage for the same in the eyes of the government for whom we have served.

The Query

Is there any earlier judgment by any Hon'ble court on this topic or any expert opinion on how to go about it?

Regards,
Amit

PSU Bank Pension Regulations and Past Service Reckoning

The PSU Bank Pension Regulations of 1995 provide for certain situations in which an employee's past service in a bank can be reckoned with for pension purposes. As per the Pension Regulations, as I understand, the past service of an employee in a bank can be counted for pension purposes only when the employee is transferred from the erstwhile bank to another bank either on account of a merger or amalgamation of the former bank with that of the latter. It does not appear to be so in your case, as you have joined the new PSU bank as a fresh recruit, as I gather from your post.

Terms of Appointment and Pension Benefits

Then the other avenue is to look at the terms of your appointment in the PSU bank. If the terms of appointment in the new PSU bank permit you the benefit of reckoning past service for the purpose of retirement benefits like pension and gratuity, then you can avail of that benefit. However, I have not come across any such case. It is an admitted fact that you have joined a PSU bank as a fresh recruit. You must have, therefore, resigned from your erstwhile bank and joined the new PSU bank. The Bank Pension Regulations also contain a provision that an employee forfeits his entire past service on resignation. Thus, when you resigned from your erstwhile bank, you are deemed to have forfeited your entire past service in the erstwhile bank for the purpose of a pension. When you have no past service to reckon with even for pension purposes, you cannot ask for the benefit of having it included for pension purposes when you retire from the new PSU bank.

Need for Policy Change

However, I agree with your view that this benefit of carrying forward past service in a bank for pension and gratuity purposes should be made available to employees, at least in the case of employees resigning from one PSU bank and joining another PSU bank, since it is a welfare measure and the service conditions of PSU banks are the same. However, I have not come across any case law on this issue.

Regards,
B. Saikumar