First step to overcome Rs.37-crore monthly pension liability
The setting up of the KSRTC Employees Pension Fund Trust has been mooted as the first step to overcome the Rs.37-crore monthly pension liability of the Kerala State Road Transport Corporation (KSRTC).
The formation of the trust had been mooted in the KSRTC’s revival package and the road map that has got administrative nod by the government. The corporation is proceeding with the Life Insurance Corporation (LIC) proposal to find a permanent solution to pay pension to the 37,000 personnel who had retired by March 2013.
Official sources told The Hindu that the LIC is yet to submit the final proposal to the transport utility. The KSRTC has provided all the details, like age of the pensioners and the existing personnel on the rolls, for the LIC to fine-tune the proposal initially given by it.
The proposed pension fund trust will function under the KSRTC. The government, in its order approving the revival plan, points out that the LIC has suggested payment of Rs.500 crore this financial year, and subsequently Rs. 480 crore every year for 12 years to overcome the burgeoning liability.Financial crisis
As the KSRTC is in severe financial crisis, the government will have to pump in the first instalment of Rs.500 crore to be paid to the LIC this financial year. The government will also have to pay Rs.360 crore of the total Rs.480 crore the KSRTC will have to remit to the LIC for the next 12 years to create the fund.
The Corporation apart from the government’s financial assistance is looking towards the pension cess mooted for bus tickets above Rs.25 to mobilise resources. The transport utility hopes to generate Rs.150 crore annually from the pension cess.
The total annual pension burden of the transport utility in 2014-15 had been worked out to be Rs.486 crore. If the monthly pension payment is separated, sources said the KSRTC will achieve break-even.
The utility has 37,000 pensioners, and the payment to them and the 30,000-strong workforce in service as on April 1, 2013 will become the insurance company’s responsibility. Those who have joined the utility after April 1, 2013 had been enrolled to the contributory pension scheme.
Sources said the corporation needs Rs.21 crore to settle the pension arrears for the months of January and February.
The KSRTC has limited pension payment to Rs. 8,500 and Rs. 9,000 respectively for the last two months in view of the financial crisis.