News
Govt. pensioners in quandary over retirement gratuity
Government employees are left confused as the controversy surrounding the payment of gratuity continues despite President Mahinda Rajapaksa’s directive to revert to the old system.
Last week a circular was issued by Director General of Pensions abolishing the controversial circulars but there was also another letter sent by Treasury Secretary P.B. Jayasundara to secretaries and state banks endorsing the controversial bank system.
Pensions Director General S.S.Hettiarachchi in a circular No.05/2014 issued on Thursday stated circulars No.04/2014 and No.04/2014 (amendment I) issued in March and May respectively have been anulled.
The previous circulars introduced the alternative method to pay the gratuity through state banks, namely, the Bank of Ceylon, People’s Bank and National Savings Bank.
With heightening criticism and unions determined to continue their protests with a campaign later this month, President Rajapaksa ordered the Treasury Secretary to revert to the old system of paying gratuity payments.
The Sunday Times learns that though the President’s orders were to revert to the old system where the Pensions Department is the sole body that releases pension gratuity, Treasury Secretary P.B. Jayasundara issues a letter dated June18, No. BD/GPS/253/9/1 which states that if payments are made via state banks, the banks should deduct the gratuity paid within 10 years with a maximum deduction of 10 percent. The balance that cannot be claimed from the pensioner will be settled by the Treasury to the banks.
Secretary Jayasundara in his letter to the President’s Secretary, Cabinet Secretary, Pensions Department Director General and General Managers of Bank of Ceylon, People’s Bank and National Savings Bank stated that if the pensioners wish to obtain the gratuity through the banks, they can do so and that the Pensions Department will pay the banks the interest on the capital payment through the annual budget.
The letter states if the pensioner dies, the Government will bear the balance payment.
However, circular No. 05/2014 issued by the Director General of Pensions stated that the previous circulars will be annulled, but those who have obtained their gratuity through the bank will not be affected. Those who obtained the gratuity through the bank system had to pay it back in 18 years, according to the annulled circular.
“If the previous circulars were annulled how is the bank system still in place? Our trade union actions were against the bank system as the gratuity was going to be a loan and if the state fails to make the payments with time these payments will be loans forcing the pensioner to pay interest,” said Teachers’ Union President Joseph Stalin.
He said, the circular by the Pensions DG states that a detailed payment procedure will be forwarded later.
Education and health sectors have the highest number of state employees. Health Services Trade Union (HSTUA), President, Saman Ratnapriya, said that 18,000 pensioners are still awaiting their gratuity payments for over a year.
“The massive trade union action along with political parties later this month has been postponed as the circular is to come with more details. But if they fail to pay the gratuities within a month’s time, we vow to continue our protests, he said.
He said amidst criticism, protests by Government sector trade unions and fears that the bank gratuity will be given as a loan, the system continues with about 1,000 desperate pensioners, who have been resorting to receiving their pensions from state banks.