ONGC PRBS - REASON IT OUT - BY NARAYAN SINGH RQATHORE

REASON IT OUT - BY NARAIN SINGH RATHORE

1. ONGC stopped issue of Uniforms, Stitching charges, Washing allowance and Canteen Coupons w.e.f. 01.04.1990. ONGC did not transfer monetised value of these surrendered facilities, namely Additional Contribution to the Fund of Trust for crediting individual PRBS Account of members. Circular No.PRBS-14 of 18.9.1992 duly pointed out this serious irregularity by ONGC Finance. This made the Scheme artificially sick and look Un-viable. In some cases, addl. Contr. has yet to be remitted to the Trust

2. ONGC PRBS Trust stopped settlement of Pension cases from January 1996, without assigning any reason. Member retiring on 31.01.1996 was entitled to receive Pension from 01.02.1996 but made to wait for years ? This cheating ploy was adopted to evade Pension benefit on Revised Salary w.e.f. 01.01.1992.

3. ONGC Finance did not implement Circular No.PRBS-38 dated 17.01.1996 for deduction of enhanced fixed % contribution w.e.f. 01.01.1992 on Revised Salary on account of Pay Revision-1992.

4. Some GM (Fin), ONGC, Dehradun obtained an Actuarial Valuation Report dated 02.08.1996 from M/s. KA Pandit, which brought under-mentioned vital points: -

4.1. “8. Growth in salary these days is mainly on account of hike in “costs of living Index.” Higher the inflation higher is salary, higher is long term rate of interest and lower is cost of annuity. LIC cost of annuity has gone down by 10% in four years. Long term rate of interest has gone up by 2% to 3%. Current long term rate of approved superannuation fund is 13.575%. Pension fund”

4.2. “12. CONCLUSION: The Scheme is not viable as the salary rise unexpected the salary have gone up by 78% i.e. 1000 (should be 10000) in 1996 from 5600 in 1994 i.e. an yearly increase of 34%. DA which was 1.5% of basic pay in 1992 is now 30% of basic pay.”

Comments: There seems some intentional “Ghotala” in Figures.

4.3. “13. RECMMENDATION: To make the scheme viable the fund is to be raised from the sources available. The fund position should be reviewed from time to time and especially when there is change on account of wage negotiation or the long term recruitment policy. In order to take care of the fund, additional contribution should be raised from the year in which exorbitant salary rise has been given i.e.1992 and difference with 12% interest to be paid to the Fund.”

5. Actuarial Recommendation of M/s. K.A. Pandit in their first Actuarial Report dated 17.4.1990 : -

5.1. “6. It is suggested that if the monetised value of some of the benefits (which also escalate in cost even more than the salary increase) is used to finance the pension scheme, it will be possible to operate this scheme without any initial contribution from Commission or any additional liability on them.”

5.2. “7. If it is selected to start Pension scheme in the form of transfer of monetised value of benefits, we recommend (since cost of benefits will escalate in future) the value of benefits accumulating at the same rate as that of salary escalation be transferred to the Fund.”

6. It is amply clear that both the Actuarial Recommendations ( at 4.3 & 5.2 ) point in single direction of “Escalation in Cost of Surrendered Benefits” and transfer of escalated monetised value of surrendered facilities at same rate of increase as applied to Salary increase under Pay Revisions. ONGC followed Actuarial recommendation at 5.2 upto 1996 but totally ignored most important recommendation at 4.3. above. 78% escalation in Addl. Contribution on 1.1.1992 + 11% annual escalation would have provided surplus funds to the Trust.

No other amendment was needed, including Para 28 of Rules-1991.