SCI retirees a worried lot, PSU yet to execute medical scheme planned in 2008

2021-03-27 09:42:53

MUMBAI: Naresh Ranjan (name changed on request), a 77-year old Shipping Corporation of India (SCI) retiree ran up a medical bill of Rs 22 lakh after a two week long recent stay in a private hospital for a cardiac aliment.
The retired executive had to dig into his family’s savings because neither does SCI pay employees who retired prior to 2007 a pension, nor does it have a medical scheme that offers adequate compensatory cover, said K Madhavan, a member of ShipIndia Retired Employees Association, a group which represents a majority of SCI retirees.
Last week, finance minister Nirmala Sitharaman said that the rights and perks of employees of public sector units being privatised will be protected. But in case of SCI, its pre-2007 retirees have been losing their battle for rights and perks on the government turf itself.
To help PSU retirees like Ranjan who do not receive a pension, the government had issued guidelines in 2008 under which the company concerned transfers a tiny fraction of its annual profit into a corpus to take care of medical needs of such retirees.
But the DPE guideline’s efficacy banks entirely on the conscientiousness of the PSU concerned.
For, the case of SCI pre-2007 retirees proves that the DPE guidelines have failed in their purpose. The reason? In the past 13 years SCI has hardly made any contribution to this corpus in the years it was in profit, that is, from 2007-2008 to 2010-2011 and then from 2014 to 2016, said Madhavan.
“Like Ranjan, there are around 800 of us across the country, SCI executives, officers, peons, clerks and workers who retired prior to 2007. The youngest among us is now 74 years of age. Will SCI ever grant us our rightful medical entitlement?,” said Madhavan.
The medical scheme for pre-2007 retirees is an outdated one. It puts aside a lumpsum amount for lifelong cover.
For instance: A chairman and managing director is granted a sum of Rs 10 lakh to cover all the medical expenses incurred by him and his spouse from the age of 60 till death. The lowest category worker gets Rs 4 lakh. Ranjan was entitled to Rs 8 lakh, he spent Rs 6 lakh on treatments for his spouse and himself in the last 14 years, which left him with Rs 2 lakh to foot the bill of Rs 22 lakh.
“Department of Public Enterprise’s 2008 guide lines inter-alia states that PSEBs are to contribute 1% to 1.5% of profit before tax (PBT) to take care of medical and any other emergency needs of those who retired prior to 2007. Now, 1.5% of PBT cumulatively for the six years that SCI made a profit (out of the nine financial years 2007-08 to 2015-16) amounts to Rs.56.87 crores. But SCI contributed only Rs 15.82 crores in the financial year 2016-17, which is the PBT of the year 2008-09 alone,” said Madhavan. He added that SCI made no contribution after that.
Therein lies the problem with the DPE guidelines. The new ‘post-retirement medical scheme’ (PRMS) was put in place to offer financial help to PSU retirees who receive no pension, but that plan appears to have largely been relegated to paper in organisations like SCI.
“Had SCI implemented the new PRMS keeping in mind the spirit and intent of the DPE guidelines then pre-2007 retirees would have got much higher medical benefit,” he said . TOI sent a query to the SCI spokesperson two weeks ago and is yet to receive a response.
“What is worse, while contributing Rs 15.82 crores in the financial years 2016-17, SCI adjusted about Rs 12 crores towards expenditure incurred in the last decade.
But from the financial year 2012-13, the audited balance sheet of the PRMS trust did not show any liability to SCI. That was because, in the FY 2011-12 all the carried forward liability, which amounted to Rs 4.37 crore was adjusted as well as the liability of the relevant year. Therefore, as stated above the balance sheet from 2012-13 did not show any liability,” countered Madhavan.
This is a clear violation of the normal accounting procedure and we have taken up this matter with the Institute of Chartered Accountants of India and are awaiting their response, he added.
Not that the retirement benefits is the only grievance of the SCI retirees. SCI owes `Lease rentals’ worth Rs 16.62 crore, payable from November 2008 to July 2015, to 400 employees, said a member of the Association. SCI also hasn’t formed a trust yet in order to transfer the PRMS corpus in respect of employees retired post January 2007.

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