Finally, Life Insurance Corporation (LIC) employees will see their wages being revised with effect from 1 August 2022. The last revision happened back in 2017. This revision will mean that LIC will end up spending about Rs 29,000 crore on wages every year. This is an increase of 17 per cent in the annual wage bill, that is, pressure of about Rs 4,000 crore more per year.
As part of the revision, a one-time ex-gratia payment will also be made to LIC pensioners, which will benefit over 30,000 pensioners and family pensioners.
The wage revision was notified by the Finance Ministry and will benefit over one lakh employees. The notification was issued by the Department of Financial Services (DFS) under the Finance Ministry, with approval from the Election Commission.
Wages for LIC staff are revised at an interval of five years.
Whether this increment in staff expenditure will affect investments and profits margins remains to be seen.
In early February 2024, the employee unions of LIC had dismissed the company’s proposed 14 per cent salary increase. At the time, s statement released by the unions revealed that all LIC unions had declined the given offer from LIC management, deeming it inadequate in recognising the dedication and commitment of LIC employees to the institution.
It is pertinent to mention here that in the third quarter of the current fiscal year (FY24), LIC reported a substantial 49 per cent year-on-year (Y-o-Y) increase in net profit, reaching Rs 9,444.42 crore from Rs 6,334.19 crore. The Value of New Business (VNB) margin, a key profitability metric, rose to 20.01 per cent in the quarter, compared to 14.62 per cent in Q3FY23.