GAANAM HOTELS LTD
Near Ernakulam Jn.(South) Railway Station
STEERING COMMITTEE OF GOVERNMENT EMPLOYEES ORGANISATIONS ON PFRDA BILL
C/o AIRF, 4, State Entry Road, New Delhi – 110001
Thousands of State and Central government employees, Railway workers, Defence workers, BSNL, University and School teachers today participated in a massive March to Parliament against the PFRDA Bill and to submit a petition to the Prime Minister to which millions of employees have subscribed their signature. The rally was addressed by the leaders of various organizations of employees and several Members of Parliament.
A seven member delegation consisting of Coms. S K Vyas, (Convenor, Steering Committee) Shiv Gopal Mishra, (General Secretary, AIRF), KKN Kutty, (Secy. General, Confederation of Central Government Employees & Workers) S.N. Pathak, (President, AIDEF) P. Abhimanyu (General Secretary, BSNLEU) Rajendran (General Secretary, STFI) and Sukomal Sen (Sr. Vice President, AISGEF) met the Hon'ble Prime Minister today along with Com Basudeb Acharya, MP and Com. Tapan Sen, MP and General Secretary of CITU. The delegation appealed to the Prime Minister to reconsider the government's policy of privatisation of pension funds and withdraw the PFRDA bill which seeks to replace the existing defined benefit Pension Scheme of government employees. The concern and anxiety of the government employees over the financial security in the evening of their life was also brought to the notice of the Prime Minister.
The petition to the Prime minister elaborated the various reasons as to why the present bill will be neither in the interest of the employees nor will benefit the Government Exchequer (Copy enclosed).
The Hon'ble Prime Minister assured the delegation of the consideration of the petition and the feasibility of providing a guarantee for a minimum pension which the Standing Committee had recommended but unfortunately not found approval of the Cabinet. The Prime Minister informed the delegation that his Government would not do anything to harm the interest of the employees.
The rally was concluded at 2.30 PM. On behalf of the Steering Committee, Com. Vyas announced that the employees will organize two hour walk out on the next day the Parliament takes up the PFRDA Bill for consideration.
OF GOVERNMENT EMPLOYEES ORGANISATIONS
ON PFRDA BILL.
13.C Feroze Shah Road
New Delhi. 110 001
Dated: 25th November, 2011
Phone: S.K.Vyas . Convenor: 91-98682 44035.
011-2338 2286. E mail. Confederation06@yahoo.co.in
The Hon'ble Prime Minister of India,
Sub: Request for Scrapping of PFRDA Bill
We submit this Petition to bring to your kind notice and through your good office to the attention of the Honorable Parliamentarians of our country certain aspects of the re-introduced PFRDA bill, which will have adverse impact on the exchequer in general and on the prevailing service conditions of the Civil Servants. We pray that our submissions in this regard may please be caused to be considered earnestly and the implication of the provisions of the bill critically analyzed and examined and take decision to kindly withdraw the Bill from the Parliament.
We submit the following for your critical and objective analysis of the Bill :
1. The concept of old age security for civil servant in the form of pension has a very ancient
origin dating back as early as third century BC, the quantum being half of the wages on completion of forty years blemishless service to the king.
2. In the last century, one of the measures taken by the colonial rulers to attract talented personnel to the Royal service was the introduction of pension scheme for civil servants in 1920. The Royal commission through its various recommendations improved the scheme and the 1935 Government of India Act provided it statutory strength.
3. The land mark judgment of the Supreme Court in D .S. Nakara and others Vs. Union of India (AIR-1983-SC-130)(applicable to the Central and State Government employees, teachers, and all stake holders of pension system) conceptualized pension stating that pension is neither a bounty nor a grace bestowed by the sweet will of the employer, but a payment for the past services rendered. It was construed as a right step towards socio-economic justice and a concrete assurance to the effect that the employee in his old age is not left in the lurch.
4. The fifth Central Pay Commission which was set up by the GOI in 1993 to go into the wage structure and pension scheme of the Central Government employees referring to the Judgment of the Supreme Court cited, observed (Para 127.6) that
"pension is the statutory, inalienable and legally enforceable right earned by the civil servant by the sweat of the brow and being so must be fixed, revised, modified and changed in the way not dissimilar to salary granted to serving employees."
5. The guiding principle adopted in determining of pay package of civil servants is to spread out the wage compensation over a long period of time whereby wages paid out during the work tenure is low in order to effect payment of pension on retirement. As such civil service pension is rightly termed as deferred wage. While in the organized private sector the employer is required to contribute equal share to the Provident Fund of the employees, the Government neither contributes to the Provident Fund of the civil servants nor takes any pension subscription from him.
6. In an unwarranted intervention in the Statutory defined benefit Pension system, the IMF in their work paper (WP/01/125,(2001) propounded the creation of a pension fund by eliciting subscription from the Wage earners at the earliest stage of their employment so as to fetch an annuity decent enough to sustain him at the old age. In fact it was a suggestion for a retrograde change over from the defined benefit pension scheme to a defined contributory system. While suggesting so, they have categorically stated that India does not suffer demographic pressure experienced by major countries, for India's population beyond the age of 60 was about 7% in 2004 which rose to 8.6% in 2010 and is estimated at 13.7% in 2030 and 20% in 2050.
7. The New contributory pension scheme enunciated by the Government of India and adopted by most of the State Governments is covered by the PRFDA bill. The bill inter alia, envisages a social security scheme for all who desire to have an annuity at his old age which is voluntary and not mandatory. However, in the case of Civil Servants, who are recruited to Government service after the prescribed cut -off date ( 1.1.2004 in GOI service) the scheme is mandatory in as much as the employee is bound to subscribe 10% of his emoluments to the Pension Fund and the Govt. being the employer would contributes equal amount. No employee is entitled to opt out of the scheme.
8. Despite the inability to bring in a valid enactment, the Central and all State Governments other than those of West Bengal, Kerala and Tripura through illegal executive orders decided to impose the contributory pension system arbitrarily on the Central and State Government employees .While the Govt. of India notification excluded the personnel in the armed forces and para-military establishments, the Governments of the Left ruled States of West Bengal, Kerala and Tripura consciously continued with the existing defined benefit pension system.
9. The PRFDA Bill stipulates that there will not be any explicit or implicit assurance of the benefit except market based guarantee. The subscriber is thus exposed to the following risks at the exit.
a) If there is a major market shock, the subscriber to the New Pension scheme may end with no ability to purchase an annuity.
b) Since annuity is and cannot be cost indexed, the real worth of the annuity might fall depending upon the inflationary pressure on the economy.
c) As per the scheme, the subscriber is to make the choice of investment portfolio. The Civil Servant being mostly uninformed in finance and investment related matters, he might end up in making wrong choices which would eventually rob him of the old age pension.
d) The subscriber is perforce to contribute to the charges of the investment managers, whose priority often is as to how much profit they could make through investment of the huge corpus of pension fund in the volatile share market .
10. The pension fund created by the employees' subscription and the employers' contribution which directly flows from the exchequer ( which is nothing but tax revenue of the Govt.) is made available for the stock market operations which is not only unethical but also blatant diversion of public fund for private profit, both Foreign and Indian capitalists.
11. In the case of Civil Servants recruited after the cut-off date, the new scheme replaces the existing much better "defined benefit" pension scheme. In the process, the Government has created two classes of civil servants viz. the one with a defined benefit pension scheme and the other with the contributory pension scheme in which the employee is to part with 10% of his emoluments to become entitled for an old age social security subject to the vagaries of share market permits. Since in both the cases, the pay, allowances, perks, and other benefits, privileges, duties and responsibilities are the same it amounts to wanton discrimination of one against another which is not sustainable in law, rather violative of the existing constitutional provisions.
12. The wage structure presently designed for those who are recruited prior to the cut- off date and after is on the same premise and is depressed to enable the Govt. to meet the pension liability in future. By imposing the new contributory pension scheme on the employees who are recruited after the cut- off date the Govt. not only denies the statutory defined pension benefit to them but also compel them to contribute for earning an undefined annuity, which must be characterized as highly discriminatory.
13. Those who are covered by the contributory pension scheme will become entitled for an annuity, a portion of the accumulated contribution is able to purchase, basing upon the accretion to the fund from the investment. There is, however, no guaranteed minimum amount of pension for those who are covered by the new scheme, whereas the civil servants covered by the existing scheme do get a defined and guaranteed minimum pension and on his death his family members (wife, widowed and unmarred daughters and unemployed sons below the age of 25) become entitled for family pension. The discrimination factor is thus compounded.
14. The PFRDA Bill when enacted, it is rightly feared, will empower the Government to alter or even deny the present employees and pensioners the statutory defined pension benefit as has been done in the case of those who are appointed after the cut-off date.
15. It is stated that the prime objective of the introduction of the contributory pension scheme is to substantially reduce the outflow on account of pension liability. The major pension liability of Government is accounted for by Armed Defence personnel. They are however excluded from the purview of the contributory pension scheme. The personnel in the Para Military forces are also excluded from the ambit of the new Scheme. While doing so, (no doubt to attract the people to serve in the armed forces for security of the Nation) the Govt. is bound to meet the pension liability from the consolidated fund of India. The argument advanced by the Govt. to cover the Civil Servants in the ambit of the new Pension scheme has been found to be unsustainable by the study commissioned by the 6th CPC. Shri S. Chidambaram, Actuary, in his report, (Annexure to "A study of Terminal benefit of Central Government employees by Dt. K. Gayatri, Centre for Economic Studies and policy, Institute for Social and Economic change, Nagarbhavi, Bangalore) has pointed out that the Government liability on account of contributory pension scheme would in effect increase for a period spanning for the next 34 years from the existing Rs. 14,284 Cr. To Rs. 57,088 Cr. ( 2004-2038) and is likely to taper off only from 2038 onwards. The exchequer is bound to have an increased outflow for the next 34 years and will be called upon to bear the actual pension liability of defence personnel and personnel of para military forces, besides making the contribution to the Pension fund of the Civil Servants recruited after the cut off date. The specious plea that the exchequer is bound to gain due to the contributory pension scheme is therefore not borne from facts.
16. Of the present pension liability of the Govt. of India, which in 2004-05 was 0.51% of the GDP, 0.26% is accounted for by the Defence( which is 50% of the total pension liability.) The study report of the Centre for Economic Studies has concluded that the pension liability as a percentage to GDP which is just 0.5% presently is likely to decline given the growth rate of Indian economy.
17. Since most of the State Governments have chosen to switch over to "contributory pension scheme" , in fairness ( from the Study conducted by the Centre for Economic Studies and policy) it can be concluded that the pension liability of all the State Governments are bound to increase to three times of what it is today by 2038.
18. The first version of the PFRDA Bill was placed before the Parliament by the NDA Government in 2003. The 6th CPC set up the Committee to go into the financial implication on account of the increasing number of pensioners and suggest alternative funding methodology in 2006. The said Committee came to the inescapable conclusion (report submitted in 2007) that "the existing systems of pension are increasingly becoming complicated after the introduction of the New Pension scheme" and warned that "caution has to be exercised in initiating any further reforms" In the light of the conclusion of the said study report which revealed the fact of serious escalation in the pension payment outflow, the rationale of the re-introduction of the PFRDA bill in 2011 covering the civil servants is incomprehensible. Undoubtedly, the Bill when enacted into law will through the existing pensioners to a financially insecure future and the existing workers to the vagaries of the stock market. We, therefore, earnestly pray to your good-self to bring back all the civil servants including teachers irrespective of the date of entry into Government service as also those irregularly appointed within the ambit of the existing statutory defined pension benefit scheme.
We may, in fine, quoting the concluding paragraph (Page 76 of the report of the Centre for Economic Studies and Policy – Institute for Social and Economic Change) of the Committee set up by the 6th CPC
"Mainly given the fact that the future liability although may be large in terms of absolute size is not likely to last very long and does not constitute an alarmingly big share of the GDP which is also on the decline. It appears that pursuing the existing 'Pay as you go' to meet the liability will be an ideal solution."
appeal you, for the detailed reasons adduced in the foregoing paragraphs, that the new pension scheme enshrined in the PFRDA Bill may be withdrawn from the Parliament both in the interest of the Civil Servants and the exchequer.
CONFEDERATION OF CENTRAL GOVERNMENT
EMPLOYEES AND WORKERS.
Chq: Manishinath Bhawan
A2/95 Rajouri Garden
New Delhi. 100 027.
E mail. Confederation06@yahoo.co.in.
Dated: 10th November, 2011
N O T I C E
Notice is hereby given for a meeting of the National Council of the Confederation of Central Government Employees & Workers, on 16th December, 2011 at KOCHI (Ernakulam – Kerala) The meeting will commence at 10.00 a.m. and will continue till the agenda items are discussed and concluded. The following is the agenda for discussion at the meeting.
1. Review of the 25th November, March to Parliament progfamme and the signature campaign against the PFRDA Bill.
2. Finalization of future action programme to realize the charter of demands.
3. Review of progress in the matter of formation of District and State Committees.
4. Other organizational issues with special reference to payment of subscription and the venue for the next triennial conference.
5. Participation in the common T.U Programmes chalked out by the joint platform of trade unions
6. Continuing impasse in the settlement of issues slated for discussion at the National Anomaly Committee.
7. Any other matter with the permission of the Chair.
All National Council Members. Please make it convenient to attend the meeting. Another communication will follow from the Kerala state Committee about the arrangements made for the conduct of the meeting, boarding, lodging etc. However, all N.C members are requested to kindly book the ticket in advance to and fro as there would be terrific rush in connection with the Sabarimala pilgrimage.
CAMPAIN AGAINST PFRDA BILL
KERALA SETS AN EXAMPLE FOR OTHERS TO EMULATE
Collects nearly 7 lakh signatures!
The following campaign program has been implemented in Kerala State in phased manner.
1. A well organized state level convention was organized at Ernakulam (Kochi) on 09-07-2011. About 1000 employees participated. Com Sukomal Sen, Sr Vice President, All India State Govt. Employees Federation inaugurated the convention.
2. District level conventions were organized in all district Head-Quarters on 16-07-2011 and 17-07-2011. State committee members of the confederation attended the district conventions.
3. Evening Dharna was organized in every district and Taluka head quarters on 28-07-2011 and 29-07-2011 at prominent locations. Average 200 members participated in each dharna. Various trade union and service organisation leaders addressed the dharnas.
4. Signature campaign was organized in three phases.
a. First Phase :
Inaugural function of the signature campaign was organised at all District head quarters on 25-08-2011 with big public meetings addressed by unions leaders. Important personalities were invited to sign the memorandum during the inaugural function. Wide media coverage was given.
b. 2nd Phase :
Members of the organisations of steering committee visited all offices and institutions and collected signatures throughout the state from employees and workers.
c. 3rd Phase :
Members of the organisations of the steering committee approached the public throughout the state and collected signatures. Booths for collecting signatures from public were erected in front of all important offices like post offices, state Govt. offices, Bus stands and other public places.
5. Signature campaign was continued up to 13-09-2011. Total 6.5 lakh (Six and half lakh ) signatures have been collected during the period from 25-08-2011 to 13-09-2011 (20 days)
6. A train Jatha was organised on 13-09-2011 and 14-09-2011 from northern end of Kerala (Kasargod) to southern end (Trivandrum). State level leaders travelled in the train from Kasargod to Trivandrum, district level leaders handed over the bundles of signatures collected after conducting big demonstrations at all important railway stations at district head quarters. The program was widely covered in the media. The state level leaders were finally received at Trivandrum railway stations (State capital) with big rally.
7. March to Rajbhawan was organized on 16-09-2011. About 7000 (seven thousand) employees and workers participated. The march was inaugurated by Com. Pinarayi Vijayan, State Secretary & Politburo member of CPI (M).
8. Efforts are being made to ensure participation of maximum number of delegates in the November 25th Parliament March from Kerala state.
Confederation Charter of "Demands – Campaign "
1. Campaign week was observed from 01-09-2011 to 05-09-2011 throughout the Kerala State. Gate meetings and demonstrations were held in front of all important Central Govt. offices and charter of demands was explained to the membership.
2. District level conventions of central Govt. employees were organized in all the DISTRICT ON 19-09-2011 AND 20-09-2011. Com. K.K.N.Kutty, Secretary General , Confederation , who was taking rest after his surgery ,inaugurated the district convention of Malappuram District near his residence on 20-09-2011.
3. Dharna was organised at every District Head quarters on 28-09-2011. On an average 200 Central Govt. employees participated
4. Program of march to the office of Chairman , Central Govt. welfare co-ordination committee was organised on 20-10-2011. A big procession was conducted from AG's office to GPO, Trivandrum. About 1000 Central Govt. employees participated. The march was inaugurated by Com. P.K.Sreemathi Teacher , Ex. Health minister of Kerala .
CONFEDERATION OF CENTRAL GOVT. EMPLOYEES & WORKERS.
A-2/95,Manishinath Bhawan,Rajouri Garden, New Delhi-110 027
Tel: 011-2510 5324: Mobile: 98110 48303
Conf/ 22 /2011
We invite your kind attention to the declaration adopted by the National Convention held at Mavalankar hall, New Delhi on 7th September, 2011 in which delegates of all Central Trade Unions and Federations participated. (Copy appended hereunder for ready reference.) As you are aware, despite the protest and resistance movement organised by the working class, the UPA II Govt. had continued with the neo liberal policies unabated. The prices of all commodities especially the food articles had been constantly increasing and the Oil companies were permitted to increase the price of petroleum prices often. During its regime, the Govt. permitted the Oil companies to raise the prices of Petrol sixteen times and the Prime Minister has now threatened that his Govt. would soon take the decision to deregulate the administrative price mechanism in respect of cooking gas, kerosene and diesel very soon. For him the inclusive growth is only a phrase to be used to garner votes. In so far as the government employees are concerned, the next session of the Parliament would be crucial in as much as the Govt. Is bent upon enacting the PFRDA Bill to ensure the privatisation of Pension funds.
Even though the struggles against the Neo liberal policies were launched initially by the Left Trade Union and Left parties, the experience of the workers in the last ten years has compelled all Trade Unions to be part and parcel of the struggle against these policies. Whereas INTUC became the partners in the common struggles last year, the BMS has decided to join the common platform now. The Delhi Convention of 7th September, 2011 has called upon the workers to organise a Jail Bharo agitation on 8th November,2011. We do appreciate the constraints of the Government employees to court arrest. But that should not deter us from ensuring the active participation of our rank and file members in this historic struggle. The State Committees and affiliates must make all efforts to enlist participation of large number of our members in the rally on 8th November, 2011 at all places.
The National Convention of Workers being held on 7th September 2011 at Mavalanker Hall, New Delhi noted with serious concern that despite several rounds of all in united protests by the entire trade union movement of the country, the Govt has remained totally unresponsive to major concerns of the working people.
Practically no step has been taken by the Govt to address the basic demands of the workers being pressed through joint memorandum by the Central Trade Unions to honourable Prime Minister and the Lok Sabha Speaker and various other joint countrywide programmes.
Rather, aggressive moves are being taken to further aggravate the rise in prices through frequent hike in prices of petrol, diesel, LPG and kerosene. Disinvestment of shares of Public Sector Units is being actively pushed through by the Govt to facilitate phased privatisation of the highly profit-making PSUs. Existing labour rights including right to form union and to social security and pension are being sought to be curbed through various legislative and administrative moves. Mass scale contractorisation of the regular work is continuing in all the workplaces including in PSUs and Govt. establishments. Contract workers are not being paid in most of the places even the statutory minimum wages which is very low to meet the basic requirements for a human living .
The National Convention also expresses its serious concern over the flaring up of rampant corruption all around and huge black-money-generation in the economy and seeks to draw the attention of the Govt to the widespread popular discontent and disgust over the issue of corruption demanding concrete legislative and administrative measures and change in the economic policy regime to eradicate and prevent corruption and bring back the black money stashed abroad.
The National Convention calls upon the working people of the country to further widen the unity achieved through united struggle and launch united protest against the unresponsive approach of the Govt through intensified countrywide struggles.
While reiterating the five point demands formulated jointly by the Central Trade Unions and Federations for
1) Concrete measures to contain price rise,
2) Concrete measures for linkage of employment protection with the concession/incentive package offered to the entrepreneurs,
3) Strict enforcement of all basic labour laws without any exception or exemption and stringent punitive measures for violation of labour laws,
4) Universal social security cover for the unorganized sector workers without any restriction and creation of a National Social Security Fund with adequate resources in line with the recommendation of NCEUS and Parliamentary Standing Committee on Labour and
5) Stoppage of disinvestment in central and state PSUs.
The National Convention of Workers also demands immediate action by the Govt of India to ensure:
• No Contractorisation of work of permanent/perennial nature and payment of wages and benefits to the contract workers at the same rate as available to the regular workers of the industry/ establishment
• Amendment of Minimum Wages Act to ensure universal coverage irrespective of the schedules and fixation of statutory minimum wage at not less than Rs 10,000/-. • Remove all ceilings on payment and eligibility of Bonus, Provident Fund; Increase the quantum of gratuity.
• Assured Pension for all
• Compulsory registration of trade unions within a period of 45 days and immediate ratification of the ILO Conventions nos 87 and 98
To press the above demands and to prepare for higher level of united action, the National Convention decides to hold Countrywide multiple forms of action such as SATYAGRAHA/JAIL BHARO, MASS SQUATTING etc. in all the state capitals and industrial centres on 8th NOVEMBER 2011.
The National Convention also calls upon all the trade unions and workers and employees in general irrespective of affiliations to hold statewise and industrywise conventions to make the above programme a total success and prepare for countrywide General Strike as early as possible in the next phase.