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National Institute of Personnel Management and
Management & Leadership Development Centre organized a
one day workshop on “Medical and Emergency Needs of
Retired Employees of CPSEs - Creation of Corpus”.
 Objectives
of the Workshop
Dr.
Jauhari lal, President MLDC
and Former Director(HR), ONGC & Oil India Ltd. brought
out briefly the objectives of the workshop as follows:
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 Understand
the provisions and implications of the DPE
guidelines issued vide their Office Memorandum
No.2 (81)/08-DPE (WC)-GL-XVI/ 2009 dated
8 July 2009.
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Sharing of information by PSUs on the status of
implementing the above guidelines.
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Options available to PSUs for medical facilities to
retired employees.
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Understanding “Emergency Needs” of
retired employees as stipulated in the guidelines.
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Formation of a model Scheme for creation of corpus.
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Strategy for honoring the DPE guidelines.
Workshop
Speakers
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Dr. Nitish Sen Gupta,
Chairman, BRPSE, Government of India.
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Dr. U.D. Choubey, Director
General, SCOPE & Former CMD, GAIL.
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Shri Rajendra Kumar,
Director, DPE, Government of India.
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Shri K.Ramachandran Pillai,
CMD, National Textile Corporation Ltd.
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Dr. A.K. Balyan, MD,
Petronet LNG and Former Director (HR), ONGC.
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Shri R.S.Butola, MD, ONGC
Videsh Ltd.
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Shri G.L.Tandon, Former
CMD, Coal India Ltd & Neyveli Lignite Corporation Ltd.
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Shri B.K.Bakshi, Former
CMD, Indian Oil Corporation Ltd.
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Shri R.Srinivasana, Former
Member (Per), ONGC.
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Shri R.P. Singh, Director
(Per), IFFCO.
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Shri Neeraj Jain, IFFCO
Tokyo Gen. Insurance Company.
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Dr. Jauhari Lal,
President, MLDC & Former Director (HR), ONGC & OIL.
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Ms. Jatinder Peters, Vice
Chairperson, NIPM (Delhi Chapter) & GM, ONGC.
The following
presentations were made:
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Shri M.B.Aparajit, Chief
Manager, CIL.
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Shri S.K.Singh, EA to
Director (HR), OIL.
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Ms. S. Swaminathan, Sr.
Manager (HR), BHEL.
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Shri A.K.Shah, GM (HR),
ONGC.
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Shri S.C.Mahato, Sr.
Manager, GAIL.
60
executives from 18 organizations attended the workshop
which included 10 retired executives from CPSEs. S/Sh.
A.S.Soni, Former Director (Offshore), ONGC and Shri
Ashok Anand, Former Director (Per), Oil India Ltd also
attended it. The workshop was divided into 4 sessions
i.e. 2 sessions before lunch and 2 sessions in the
afternoon.
Welfare
Steps for Retired Employees of CPSEs
Shri Rajendra Kumar,
Director, DPE made a presentation on “Welfare
Steps for Retired Employees of CPSEs”. In his
presentation he brought out the following points:-
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 2nd
pay revision committee met retired CPSEs executives
including the All India Non-Pensioned Cum Senior
Citizens Retirees’ Association, Bangalore.
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The committee observed
that while a few CPSEs provided post retirement
medical benefit, most of the retired executives had no
access to medical benefits.
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Committee recommended up
to 30% of basic pay towards superannuation benefit
after providing for PF and gratuity a buffer available
for pension and/or post retirement medical benefits.
This was available only for those who superannuated
after 15 years of service in a CPSE.
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Corpus from 1 to 1.5% of
PBT be created by CPSEs for medical and any other
emergency needs for retired executives and also those
who were not adequately covered by a pension scheme.
He further pointed out
that the recommendations of the committee were
circulated and suggestions were sought regarding
feasibility and methodology of operationalising them.
However DPE could receive only two responses without
any specific comments. Subsequently these guidelines
were issued. Creation of corpus was provided for
benefit of those who had no support system like
pension or medical benefit scheme. However for those
retiring after 01.01.07, superannuation benefits up to
30% of basic pay + DA was provided which included CPF,
Gratuity, Pension and Post Superannuation medical
benefits. He further stated that CPSEs should make
their own schemes to manage the fund or to operate
through insurance companies.
With regard to OM dated 8th July, 2009, Shri Rajendra
Kumar clarified that the schemes were to be formulated
only where need was felt to take care of medical and
any other emergency needs for those not covered by the
pension scheme and / or post superannuation medical
benefit scheme. Guidelines provided that not more than
1.5% of the PBT of previous year and even may be less
Depending on requirement to be earmarked for creating
the corpus. Guidelines further provided for
constituting a committee of Directors for deciding on
distribution of funds and identifying areas of medical
and emergency needs. However, there would be no
budgetary support from the Government. The CPSEs would
submit their proposals of the scheme to their
respective Ministry/Department for approval.
Sh.Rajendra Kumar mentioned that as per his knowledge,
no CPSE had framed any scheme. However, some CPSEs had
started framing the scheme to replace / supplement the
existing scheme and they were considering paying a
monthly amount to meet medical and emergency needs. He
further clarified that the intention should not be to
exhaust the funds but to provide for a reasonable
support for medical or emergency requirements and the
contribution might be flexible depending upon the
CPSEs PBT.
Formation of
Public Sector undertakings and its concept
Dr.U.D. Choubey DG,
SCOPE and former CMD, GAIL in his special address
traced the history of formation of Public Sector
undertakings and its concept. These were created
basically to modernize the process of
industrialization of Indian economy in its various
facets and also to reach the remotest and the most
backward areas of the country for development. These
were called as “Commanding heights and Modern temples
of India”. The PSUs had made major contribution in the
socio-economic development of the Country. PSUs at one
time had 24 lakh employees which reduced to 15 lakh at
present. It is because of their contribution, PSUs
were now christened as Mini-Ratna, Nav-Ratna and
Maha-Ratna companies. At present companies were
contributing about Rs.100,000 crores as net profit
every year and also contribute to Government every
year as dividend. Because of profitability, about
Rs.90,000 crores had been realized by the Government
by way of disinvestment of PSUs.
Dr Choubey added that in
view of the commitment and contribution made by the
employees of CPSEs in the formative years, these
companies were now the pride of the Nation. Therefore,
social security of retired employees was not only an
obligation but responsibility of the concerned PSU and
also the Government. He suggested that the corpus at
the national level could be created by contributing
0.1% every year of the net profit of PSUs. This could
take care of the medical needs of the retired
employees of CPSUs which were unable to meet their
medical expenses because of their financial
constraints. He recalled that a number of PSUs
including GAIL had formulated medical schemes which
were at par with the serving employees. DPE should
come out with such a mandatory provision. He assured
that the SCOPE would carry forward this issue with the
higher Government level for equality and justice.
Last Session
During the course of
subsequent discussions / interactions with the panel
speakers and the participants, the following points
were highlighted:
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 Retired
employees are not to be viewed as wasted asset but as
reserve and reservoir of valuable talent and
experience on call at any time by the Govt or the
CPSUs
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It was unfair to employ
differential concepts between the status of retired
Govt employees and the CPSU retired employees.
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The Supreme Court of India
has held in number of decisions that CPSUs fall within
the inclusive definition of ‘State’.
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The Supreme Court has also
held that the power of the Govt in the grant of any
benefit should be structured by rational, relevant and
non-discriminatory norms
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Retirement benefits in
whatever form are deferred wage in consideration of
past service rendered sacrificing the prime of youth
for the sake of the Govt (CPSU) and the benefit should
be such that the retired employee is able to lead a
dignified life maintaining, as far as possible, the
standard of living he was used to during his service
life.
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The Apex Court has held
that classification of retired employees for the
purpose of retirement benefits should comply with
article 14 of the Constitution.
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Insistence on a minimum of
15 years of service in a CPSU is further
discriminatory in as much as employees move from Govt.
to CPSU or from one CPSU to another only to serve the
larger interests of the Govt. and by the selection
process of the Govt.
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The DPE guidelines provide
for the retired employees of only profit making
companies. There are no guidelines for those employees
of PSUs which do not have PBT.
The employees, per se, cannot be held responsible for
the losses. There were many external reasons beyond
their control.
Nevertheless Financial position of many of such
companies is fast improving by way of “Turn around”
strategies and measures.
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The DPE guidelines are
vague on the term “any emergency needs”.
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Emergency needs may differ
from person to person and place to place. Companies
like SAIL, Coal India Ltd., BHEL having a large number
of retired employees settled all over India will find
it impossible to access the emergency needs of an
individual. No company can create an establishment for
this purpose. Moreover, this will lead to
subjectivity.
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The guidelines are not
mandatory in nature and implementation is left to the
discretion of the PSU management. The provision that
the scheme may be set up where a need is felt is
subjective in nature and is vulnerable to grossly
discriminatory interpretations.
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That no PSU has set up any
scheme, demonstrates that either there is too much
“vagueness” in the guidelines or there is sheer apathy
in the PSU management or both.
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This issue has to be seen
in a larger perspective. This is an important issue of
“social security” for which both the government and
the concerned CPSUs have congruent responsibility.
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Social security scheme
particularly the medical scheme and the financial
assistance after retirement are motivational for
retention of talents in the core disciplines and core
sectors in this era of competitive environment. There
are enough examples of European, Canadian and American
companies for ensuring “social security” of its
retired employees.
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Banking industry is very
considerate to its retired employees and has given the
second option to its retired employees to join the
pension scheme.
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A large majority of
employees who retired 5,10 or 15 years back received
meager superannuation benefits by way of CPF, gratuity
etc. and their financial position is miserable in the
absence of any financial help from their own
organization or Government.
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Guidelines talk about
meeting ‘emergency needs’ which presumably are to meet
the basic physical need of at least two square meals a
day, clothing and toiletries for two persons and
reasonable living accommodation and social needs for a
decent living.
Conclusions
and Recommendations
In the light of
discussion, interaction and deliberations the
following conclusions and recommendations were
drawn.
It was understood that these recommendations could,
for the time being, be only within the confines of
the DPE guidelines promulgated so far and the review
of the guidelines within a larger frame of greater
fairness and equity would have to be taken up
separately.
The CPSUs could be divided into 3 categories for
the above purpose :
THE RATNA GROUP
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Provide medical
assistance on par with serving employees of
equivalent designations
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Make an ex-gratia
payment as near the 30% of the minimum of the
current pay attached to the designation at which the
employee had retired or its present equivalent to
meet the other emergency needs of the employee. This
payment calculated monthly may be paid every
quarter. The surviving spouse to be eligible for
half of this amount. Additionally DA to be paid at
prevailing rates.
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This payment will be
made from the corpus created out of the 1-1.5% of
the PBT. This may be decided based on the fund
available in the corpus. The Scheme so formulated by
the Company will be reviewed periodically to ensure
its viability.
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The Corpus to be managed
by a Trust consisting of Director (Finance) as
Chairman, Director (HR), another serving Director,
two senior retired employees not lower than the
level of General Manager. The Trust will ensure that
sufficient contingent reserves are held at any given
time.
THE NON RATNA GROUP
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The Board to determine
the percentage of PBT to be transferred to the
Corpus
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Provide, on priority,
medical assistance on par with serving employees
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Make ex-gratia payment
to meet the minimum needs of the employee to live a
life of dignity which will also bring a fair name to
the PSU for its care and concern for the pioneers
and foundation makers
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The Corpus to be
administered in the same manner as above.
THE LOSS MAKING GROUP
Same action as for the Non Ratna Group as above.
Sources for fund may be as follows:
DPE CORPUS
It is suggested that
from out of the total dividends received by the Govt
from the PSUs, 1% should be set aside as a Special
Reserve to fund the needs of the retired employees
of the Loss Making Group and also the needs of the
other groups in the unlikely event of extraordinary
circumstances.
Similarly 1% of the
amount realized by the Govt by way of disinvestment
of PSUs may be transferred to this Trust.
This Special Reserve
should be administered jointly by the DPE and SCOPE.
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Completed Workshops