Tamil Nadu Announces Assured Pension Scheme for State Employees

With Assembly elections approaching, Tamil Nadu Chief Minister M K Stalin on Saturday announced the Tamil Nadu Assured Pension Scheme (TAPS), guaranteeing a pension equal to 50% of the last-drawn monthly salary for state government employees and teachers. The announcement led employee unions to withdraw their proposed indefinite strike, which was scheduled to begin on January 6.

Key Features of the Tamil Nadu Assured Pension Scheme

Under TAPS, government employees will contribute 10% of their basic salary to the pension corpus, while the state government will bear the remaining cost. This marks a partial return to the benefits of the Old Pension Scheme (OPS), under which the government alone funded pensions. Pensioners under TAPS will also receive Dearness Allowance hikes every six months, in line with serving employees.

Benefits for Pensioners and Families

The scheme provides for a family pension equal to 60% of the last-drawn pension in the event of a pensioner’s death. It also assures gratuity of up to ₹25 lakh upon retirement or death during service, based on years of service. Importantly, TAPS guarantees a minimum pension even for employees who retire without completing the qualifying service period. Special compassionate pensions will be extended to employees who joined under the Contributory Pension Scheme (CPS) and retired without pension benefits.

Financial Implications for the State

The implementation of TAPS is expected to significantly increase the state’s financial burden. The government is estimated to make a one-time contribution of ₹13,000 crore to the pension fund, along with an annual contribution of around ₹11,000 crore, which will be revised periodically with salary increases. According to PRS Legislative Research, Tamil Nadu already spends about 62% of its revenue receipts on committed expenditure, including salaries, pensions, and interest payments, a figure likely to rise further.

Imporatnt Facts for Exams

• TAPS guarantees pension at 50% of last-drawn salary.
• Employees contribute 10% of basic pay under TAPS.
• Pensioners receive DA hikes twice a year.
• The scheme increases committed expenditure of Tamil Nadu.

Political Context and Union Response

The announcement follows a 23-year demand by employee unions for restoration of the Old Pension Scheme. A committee led by IAS officer Gagandeep Singh Bedi had recently submitted recommendations on the issue. Although the DMK had promised OPS restoration in its 2021 manifesto, the government has opted for TAPS instead. Union representatives under the JACTTO-GEO banner welcomed the decision and met the Chief Minister to express gratitude, even as sources indicated the scheme may come into effect from January 1, 2027, after the upcoming Assembly elections.