NOTE ON ONGC PRBS
by Narayan Singh Rathore
Erstwhile Oil & Natural Gas Commission (ONGC) now renamed as Oil and Natural Gas Corporation Limited (ONGC), had introduced a benevolent welfare Pension Scheme for its Executives effective from 1st April, 1990. The noble objective of ONGC PRBS was to take care of Post Retirement needs of the Oilmen of ONGC to enable them a reasonable dignified standard living. This Scheme envisaged an income of 44% of the revised Last Salary drawn at Superannuation and or Death/Permanent Disablement while in service of ONGC, under Calculation Formula “44/33 * Reckonable Service = % of Last Salary. Subsequently altered as “40/33 * Reckonable. Service = % of Last Salary drawn, with (+) / (-) for more or less reckonable service in ONGC. The Scheme was approved by the Board of ONGC and the Central Govt. A Trust was created within ONGC to manage the operations of the Fund of Trust. Trustees were nominated by the Chairman of ONGC with one nominees of Association of Scientific and Technical Officers (ASTO). The Pension Benefit was to be paid through LIC of India against advance payment by ONGC PRBS Trust of Corpus to match the Value of Annuity.
2. ONGC’s PRBS Trust granted pension in full compliance of the Provisions of the Scheme/Rules duly approved by Central Govt. upto 31.12.1991. Pension was granted in part compliance of the Scheme, upto December 1995, on Pre-revised Salary, awaiting Pay Revision-1992, subject to Re-settlement on Revised Salary when Govt. Notification for Pay Revision-1992 was received (10th January 1996). To evade Re-settlement on revised salary w.e.f. January 1992 and also to avoid grant of pension benefit on revised salary to Executives due for Superannuation after January 1996 as well as employees suffering from Death/Permanent Disablement, ONGC stopped finalization of Pension, perhaps in expectation of some legal wrangle to arise and disrupt the smooth operations of this welfare Scheme. And rightly so happened.
3. Some GM (Fin.) of ONGC Dehradun obtained an Actuarial Valuation Report dated 2nd August 1996 and some 185 members of the Scheme from MRBC, Mumbai filed a Writ Petition in Bombay High Court, on 18th August 1996, primarily challenging the Viability of the Scheme. Other terms & conditions of the Scheme/Rules were not challenged. Hon’ble Bombay H. C. issued Ad-interim Order on 5th November 1996 with direction for ONGC and ASTO to enter into negotiations to raise/generate additional funds to save the Scheme otherwise the Scheme was liable to be scrapped altogether.
4. It is contended by ONGC that healthy negotiations were carried out during Nov. 1996 to February 1998 and a Memorandum of Understanding was signed on 3rd Feb. 1998, in “Good Faith” for financial viability of the Scheme, without examination of Assets / Liabilities of the Fund arising from April 1990.
5. The Memorandum of Understanding, signed in good faith on 3rd Feb. 1998 created a History of un-matched betrayal of faith. The Annuls of History would not witness any other Unique MOU of this kind, where Executives entered into negotiations to jeopardize & disrupt the Welfare Scheme. ONGC management contends that Employer can reduce existing benefits in larger interest of the Organisation, ignoring the fact that PRBS Trust was its own part. Some of detrimental, derogatory, prejudicial, unfair, unreasonably harsh, unconstitutional and discriminatory clauses of the MOU of Feb. 1998 exhibits the following facts: -
(a). ONGC re-defined salary for the purposes of (i) deduction of members’ Fixed Percent Contribution on Notional Salary and (ii) grant of pension on Notional salary. It is an established fact that Notional Salary was 40-60% of Actual Salary and therefore the Fund of the ONGC PRBS Trust suffered recurring loss and the Scheme was pushed in the direction of ascertained un-viability and ultimate liquidation. This was in utter violation of the Court Order. Similarly, existing Pension benefit was also reduced by 40-60%. There would not be other example of such Negotiations where the Association of Officers negotiated for 40 to 60% reduction in existing Pension benefit and that too when the Govt. approved Actuary had clearly shown 78% rise in Salary w.e.f January 1992. The ONGC PRBS does not have any Provision for review of normal entitlement under professed Formula “40/33 x Reckonable Service = % of Last Salary as Pension”.
(b). ONGC’s PRBS Trust had issued an Office Order (Circular No.PRBS-38) dated 17th January 1996 with direction for ONGC Finance to deduct Fixed Percent Contribution on revised Salary w.e.f. January 1992 on a/c. of Pay revision. This was nullified by the MOU of Feb. 1998. This deprived Trust’s Fund of enhanced Contribution of revised salary on a/c. of Pay revisions of 1992, 1997, 2007 and all times to come. This was also opposed to the direction of Hon’ble H. C. to raise/generate additional funds.
(c). The “Additional Cash Contribution” against monetised value of surrendered facilities (Uniform items, Stitching charges, Washing allowance and Canteen subsidy) was required to be raised / adjusted in accordance with prevailing consumer Price Index of Commodities. The recommendation made by the Actuary in Report dated 2nd Aug. 1996 was not heeded by ONGC PRBS Trust, which inter alias read as under:
“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.”
Any reference to “Additional Contribution” meant the monetised value of existing perks surrendered by members. Since members’ Fixed Percent Contribution was to remain “Unaltered / Constant” it was Additional Contribution alone which could be reviewed by Trustees from time to time, to match Consumer Price Index.
6. Since the MOU was signed without examination of Data / Statistics, the recommendation made in the MOU was simply an hoax:
“8.xv.(a). To appoint a reputed professional to collect and process the complete data pertaining to PRBS and complete by January 1999.
8.xv. (b). Management will ensure the viability of the Scheme on the basis of periodical review of the Scheme….”
7. If viewed in totality, the MOU did not comply with Court Order to raise/ generate additional funds. On the contrary, it caused reduction in existing sources of the Fund/ Pension. It opened Pandora of discriminations & misinterpretations. Provisions of the MOU violated fundamental rights of members, including Right to live with dignity. Trustees treated members on different scales, with unmatched discretion & discriminations. ONGC the Maharatna “Company that Cares” was expected to give its retired Executives what was offered and became due to them at retirement, death, permanent disablement. MAY GOD HELP THE WEAK.