Tamil Nadu has announced the Tamil Nadu Assured Pension Scheme (TAPS) for state government employees and teachers, offering a pension equal to 50% of the last-drawn monthly salary. The move comes amid a long-standing demand for restoration of the Old Pension Scheme and has helped avert a planned indefinite strike by employee unions.
Key Features of TAPS
- Employees will contribute 10% of their basic salary to the pension corpus.
- The state government will bear the remaining contribution.
- Pensioners will receive Dearness Allowance hikes every six months, on par with serving employees.
- Family pension will be 60% of the last-drawn pension after the death of a pensioner.
- Gratuity of up to Rs 25 lakh will be provided on retirement or death in service, subject to service length.
Coverage and Additional Benefits
- The scheme provides a minimum pension for employees who retire without completing the qualifying service period.
- Employees who joined under the Contributory Pension Scheme and retired without pension before TAPS will receive a special compassionate pension.
- The government has said it will fully bear the cost to protect employee welfare despite fiscal constraints.
Fiscal Impact on Tamil Nadu
- The scheme is expected to impose a one-time contribution of Rs 13,000 crore on the pension fund.
- Annual additional expenditure is estimated at Rs 11,000 crore.
- These costs may rise further as salary-linked contributions are revised periodically.
- Tamil Nadu already has high committed expenditure, with salaries, pensions and interest payments forming a major share of revenue receipts.
Political and Administrative Context
- The announcement follows a committee report submitted by an IAS officer-led panel on pension reforms.
- The ruling party had earlier promised restoration of the Old Pension Scheme in its election manifesto.
- Employee unions welcomed the move after years of agitation and withdrew their protest plans.