The central government has removed the cap on the family pension of a deceased bank employee in favour of a uniform 30 per cent slab to be calculated on the last salary drawn by the employee.

This move will increase the family pension from a previous maximum of Rs 9,284 per month to even between Rs 30,000-Rs 35,000 per family, depending upon the last drawn pension amount.

The Department of Financial Services (DFS) secretary Debasish Panda explained that the pension contribution by the employer (banks) under the National Pension Scheme (NPS) has also been increased from the current 10 per cent of the basic salary to 14 per cent of the same now.

He also underscored that the pension hikes are in continuation of the 11th bipartite settlement on wages, which was signed by the IBA and bank unions on 11 November 2020.

“There was a proposal in it for enhancement of the family pension and also the employer’s contribution under the NPS. This has been approved by the FM and the benefits would now accrue to the family pensioner,” Panda’s statement was quoted in a report by the Business Standard.

The bureaucrat said that the earlier slab on family pension, which was capped at 15 - 20 and 30 per cent, was limited to a maximum of Rs 9824 per month and that it was a ‘very partly sum’.

Apparently, Union Finance Minister Nirmala Sitharaman was very concerned about the same and wished to revise the same in order to ensure that the families obtain a decent amount to “survive and sustain”.