The ministry of steel on Tuesday said it has agreed to a proposal to introduce a pension scheme for employees of all steel public sector undertakings - union members as well as officers, which would benefit over 94,000 serving and 56,000 retired employees. Retrospectively effective from January 2007 for executives and January 2012 for non-executives, it would impact employees of companies like maharatna PSU Steel Authority of India Ltd, Rashtriya Ispat Nigam Ltd, MSTC, Ferro Scrap Nigam Ltd (FSNL), Metallurgical and Engineering Consultants Ltd (MECON) and Kudremukh Iron Ore Company Ltd (KIOCL).
Two other PSUs under the ministry, India's largest iron ore miner National Mineral Development Corporation and Manganese Ore India Ltd have already introduced the pension scheme to its employees as per the Second Pay Revision Committee recommendations.
"This was a long-standing demand from the employees of these PSUs," said steel minister Chaudhary Birender Singh. "It will put an additional financial burden of Rs. 45 crore per month (Rs 540 crore per annum). But it will be subject to factors like affordability, capacity to pay and sustainability of the CPSEs. There will be no government budgetary support to operate these schemes."
The rate of contribution will be decided by the respective boards of central public sector enterprises (CPSEs) each year depending upon the profit made and employee cost to the company. It will be subject to an upper ceiling of 30 per cent (Basic Pay plus DA) of superannuation benefits. The actual details of the pension scheme and road map of implementation will be worked out by the management of each CPSEs.
The global steel industry has been in the eye of a storm due to a trade war brewing between US and China. Recently, US imposed a 25 per cent tariff on imports into the country. While that is not likely to impact India directly, it has raised suspicion of dumping of steel meant for the US from China to other markets.
"There are new headwinds emerging in the market and there is no sign of imports swelling just yet," Singh said. "But we are alert and would be able to meet any challenges in future."