The finance ministry has received a proposal from the four state-run general insurers to further downsize their staff. The move comes close on the heels of the government notifying a one-time special voluntary retirement scheme for 13,000 development officers of the four state-run general insurers.
The New India Assurance Company, National Insurance Company, Oriental Insurance Company and United India Insurance Company have a combined staff strength of 85,000. Removing the 13,000 DOs (class II) from the list, leaves 72,000 employees. Of this, about 20,000-odd would be entitled to proposed VRS.
"The proposal submitted by General Insurers' (Public Sector) Association, the umbrella organisation for all non-life public sector insurance units, was sent last week to the finance ministry for retiring some class-I and class III and IV employees," said Amresh Sinha, working president of Bhartiya Vima Karmachri Sena, a union for public sector insurance employees, affiliated to the Shiva Sena party.
According to the proposal, cadre-I employees in the age bracket of 50 and beyond and cadre III/IV employees of a minimum age limit of 45 have been identified for the second round of VRS in the four companies.
About 25 to 30 per cent of the staff at the four PSU companies come under the identified age bracket. Those above the age of 50 are keen to take up the VRS, as many have off late felt a lot of undue pressure from the management.
The package offers 60 days for every completed year of service or the full salary for the remaining period of service, whichever is less. The proposed benefits are almost similar to that offered under the special VRS in the banking sector.
The four PSU insurers have been asking the ministry to allow them to trim the flab in the wake of new private players having a lean set up and thereby able to keep costs at a minimum.
Interestingly, for the last 10 years there has been no recruitment at the four PSUs, resulting in which many employees are reaching the age bracket of 45 to 50 years. Sinha added that a maximum of about 500 odd new recruits have been taken on by the four companies as specialist officers.
The VRS notified for DOs has not been well received as it fails to take into account the special incentives of Rs 250,000 DOs get annually over and above their salary levels. Questioned Sharad Jhadva, a DO with New India: "Why should a DO opt to take the VRS package of about Rs 300,000 to Rs 10 lakh (Rs 1 million) and in the process lose Rs 250,000?" The last date for accepting the package is February 15.
However, the DOs can only get the annual incentive after completion of the year (March 31).
Jhadva said the offer date should be extended to mid-April. DOs get an annual incentive on the basis of a 20 per cent growth in the profitability and size of one's own portfolio, whereby he is entitled to 24 basic salary.