Britannia pensioners to up the ante

India’s largest food company, Britannia Industries, was recently directed to pay out interim pensions to its retired officers and managers by City Civil Court in Bangalore. However, the pensioners are set to up their ante to the next level.

Britannia’s Pensioners Welfare Association (PWA) has said its claim for the pending triennial pension adjustments due from April 2004 and the next installment from April 2007 for close to 270 pensioners will most likely be filed at the court on April 18.

“The next hearing for the ongoing pension case is likely on April 18, when we intend pressing the court to give its decision on the pension dues based on rules - that we had claimed, so that the balance pension amounts may be released. Additionally, our claim for the pending triennial pension adjustments will also be filed at the court, as directed by the Honorable judge earlier,” said PWA representative Ashit Sarkar.

 

The City Civil Court had ruled on January 1 that Britannia must pay the pensions from the date of their entitlement and go on paying till ordered otherwise in the case.

Britannia, on its part, said: "The court has accepted (our) proposal for payment of pension based on accumulated contributions made on behalf of the pensioners during their service. While the matter is still sub-judice, the interim order is in line with the company's contention that the pension is payable based on defined contribution."

The pensioners have been fighting against Britannia for "defined benefit" while the company has been stating on "defined contribution".

In a defined benefit scheme, it the employer underwrites the vast majority of costs, so that if investment returns are poor or costs increase, the employer needs to either make adjustments to the scheme or to increase levels of contribution.

In a defined contribution scheme, the contributions are paid at a fixed level and therefore it is the scheme member who shoulders the risks. If they fail to take action by increasing contribution when investment returns are poor or costs increase, then their retirement benefits will be lower than they had planned.