New Delhi: The steel ministry has agreed to introduce a pension scheme for state-run companies such as SAIL and RINL that will benefit about 96,000 serving and 56,000 retired employees.

The scheme will put an additional financial burden of Rs 540 crore per annum on the companies as there would be no budgetary support for it.

"The ministry of steel has agreed to the proposal received from various CPSEs under its control to introduce the pension scheme with effect from January 1, 2007 for executives and January 1, 2012 for non-executives or from a subsequent date as decided by the company," the ministry said in statement.

The agreement was reached after consultation between the representatives of employees unions and officers associations belonging to SAIL, RINL, MSTC, FSNL, MECON and KIOCL and steel minister Chaudhary Birender Singh.

According to Singh, the pension scheme will benefit over 94,000 serving and 56,000 retired employees of CPSEs under the ministry of steel and put an additional financial burden of Rs 45 crore per month. The minister said the pension scheme will be subject to factors like affordability, capacity to pay and sustainability by the CPSEs.

The government budgetary support will not be provided to operate these schemes, the statement said.

"The rate of contribution will be decided by the boards of the CPSEs each year depending upon the profit made and employee cost to the company subject to an upper ceiling of 30 per cent (basic pay plus DA) of superannuation benefits," it said.

The actual details of the pension scheme and road map for the implementation will be worked out by the management of each CPSE, the statement said.

During the meeting with the minister, union representatives discussed various issues concerning them, including the introduction of pension scheme as part of the superannuation benefits, provident fund, gratuity and medical benefit.

"The minister informed them that medical benefits have already been extended to the employees of CPSEs under the ministry of steel. NMDC and MOIL have also introduced the pension scheme for its employees according to the recommendations of the Second Pay Revision Committee," the statement said.

"There has been a long standing demand from the employees of other CPSEs for introduction of pension scheme," it added.