Let me explain about P.F. Fund and Pension Fund from my understanding.
P.F is deducted at the rate of 10% of Basic Pay from Employee.
An equal amount is contributed by bank to the P.F. account of employee
These amounts are credited to the P.F. trust account of the individual banks.
Representatives of recognised unions will find place in the Board of trustees.
They have access to the Income/Expenditure account and balance sheet of the trust.
The amounts deposited in the account are invested in various financial instruments like
Govt., Bond etc., Income generated will be utilized for giving interest to employees account.
At the time of retirement the amount (both employee contribution and Bank contribution)
standing in the concerned employee will be given to the employee
This is the procedure of Contributory P.F. system.
In case of Pension Fund what is happening?
In 1995 Pension was introduced in Banking sector.
At that time, amount lying in P.F. trust (belonging to Pension opted employees)
is transferred to Pension fund of the individual Banks.
Thereafter 10% contributions from employees were credited to P.F. Trust account.
10% Contribution by Bank was/ should be credited to Pension Fund.
The amount thus accrued in Pension Fund is invested and income generated also
credited to Pension Fund .
Out of this fund only, Pension to all retired employees who opted for Pension scheme,
Commutation amount and family pension for the diseased employees, are disbursed every month .
Now my doubts are
1. Whether union representatives are members of any governing board of Pension Fund?