East Indian Railway: 1906 History of the EIR - Chapter XXII
Note: This is a sub-section of the East Indian Railway
The History of the East Indian Railway by George Huddleston. Published 1906 by Tracker, Spins and Co
CHAPTER XXII. PROVIDENT INSTITUTION.
THE establishment of the East Indian Railway Provident Institution was the outcome of a desire, on the part of the Board of Directors, to assist their employees to make some provision for the period of their old age after retirement from the service, or for their families in the event of their premature death, and in a general way it followed the idea of the Superannuation Funds connected with the various English Railways.
The Institution was formally inaugurated with effect from 1st January 1868 and from that date membership was made a condition of service, men already in the service being allowed the option of joining or not, as they pleased. In the first instance the membership consisted of two classes - A and B - the one representing employees of European domicile and the other those representing other classes of employees drawing salaries of not less than Rs. 30 per mensem. The subscriptions were 5 per cent and 2.5 per cent of salaries respectively, and the Company undertook to add annual contributions thereto, provided the annual net earnings attained a certain limit, such contributions being distributed to members in proportion to the total amount standing at their credit on the books. The anticipations as to the net earnings of the railway were not realized at the outset, and it was not until 1874 - the year of the Tirhoot Famine - that the first contributions were received. In the meantime, the disappointment referred to had led to considerable dissatisfaction amongst the staff, and in consequence of representations made to them the Board of Directors allowed all members the option of withdrawing from the Fund.
This was availed of to a large extent, but with the prosperous outlook in 1874 there was a general desire for admission to the Fund, both on the part of those who had previously withdrawn from it and of others who had throughout refrained from exercising their option of joining, and in August 1874 the Board of Directors, as an act of grace, again threw open the door of admission to all who were eligible under the rules, reserving only the condition, that such option must then be exercised once for all and adding as a further concession that all members might subscribe as from 1st January 1874, in order to participate in the expected contribution for that year. This act of grace resulted in a large accession to the membership of the Fund and as it was immediately followed by a contribution equivalent to 87 per cent. of the total amount at credit of each member on the books on 31st December 1874, there was a universal feeling of gratification throughout the service, more especially among those members who had adhered to the Fund from the date of its inception and whose tenacity and loyalty were thus so substantially and unexpectedly rewarded.
The position continued in this state until 1880 when the first contract of the undertaking expired, and the then Agent, Sir Bradford Leslie, represented that the division of the membership into two classes and the limitation of subscriptions to salaries of not less than Rs. 30 per mensem created an undesirable distinction, which pressed hardly upon a large body of the Company's employees This representation was accepted by the Board of Directors, and from 1st January 1881, the previous class distinctions were abolished, and membership was eligible to all employees drawing a monthly salary of Rs.15 and upwards, the general rate of subscription being fixed at 5 per cent. This rate was made compulsory, and as a further incentive to thrift, each member was permitted to add an additional subscription limited to a maximum of a further 5 per cent on salary, such optional subscriptions ranking for participation in the contributions by the undertaking - which at this time were declared half-yearly instead of annually as before - to the extent of the available surplus after all compulsory subscriptions had been credited a sum equivalent to cent. per cent. thereon.
The introduction of these new rules involved the division of contributions on the sum of the annual subscriptions, instead of, as heretofore, on the sum of the gross holdings of members, thus placing old and new members on the same footing, without regard to length of service and accumulations in the Fund. This action was resented by a large body of the older members whose profits were thereby considerably diminished. The opinion of Actuaries was taken, and after a full consideration of the ease of the older members, the Board accepted the view that their legal rights had been to some extent invaded and allowed them a grant of Rs. 1,50,000 as compensation.
From this time - 1st January 1881 to 30th June 1903 - the annual contributions by the undertaking admitted of the addition to members' accounts, of sums equivalent to their annual subscriptions and a further considerable addition in respect of optional subscriptions.
In the meantime, some other Indian railways had adopted a fixed compulsory rate of subscription of 8 per cent. of salary; optional subscriptions being at the same time permissible, practically without limit, up to the extent of salary, but debarred from participation in any share of the contributions, and it was found. on studying the cases referred to, that the basis of contribution, if authorized for adoption on the East Indian Railway, would admit of larger contributions, even though the actual amount of monthly subscriptions were reduced from 10 to 8+ per cent.
On a representation of the circumstances, the Board of Directors and the Secretary of State for India sanctioned the application of these new rules to the East Indian Railway, and they were accordingly adopted with effect from 1st July 1903; the result to members who accepted them being that they have since that date received as an annual contribution to their assets in the Fund a sum exactly equivalent to one month's pay - neither more nor less - and with the growing prosperity of the East Indian Railway undertaking there seems to be every prospect of this state of things being prolonged indefinitely.
No statement of the history of the East Indian Railway Provident Institution would be complete which omitted mention of the fact that it has already proved an invaluable boon to hundreds of retired East Indian Railway employs and their families, and that it deserves the fullest and most grateful recognition on the part of those who may confidently look forward to the benefits which it ensures on retirement. Still it does not do to trust to the Provident Fund alone as a sufficient provision for tide in the case of those who retire out of India, and many hold that something more is needed to put railway servants on a par with those who retire from Government service on a pension.
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