Thiruvananthapuram: Kerala is examining Tamil Nadu’s new pension model, the Tamil Nadu Assured Pension Scheme (TAPS), as it moves towards introducing an assured pension system that guarantees a fixed pension amount for government employees. Finance Minister K N Balagopal had the other day announced that the state would implement an Assured Pension Scheme in place of the existing contributory pension system. Under Tamil Nadu’s model, employees contribute only 10 per cent of their basic pay and dearness allowance combined, while being guaranteed a pension equal to 50 per cent of their last drawn salary.

A team, led by Additional Chief Secretary (Finance) K R Jyothilal, is currently preparing the pension framework. The preliminary outline of the scheme may be announced by Minister Balagopal in the state budget to be presented on January 29. The scheme will be implemented after the rules are notified.

The state is also studying the Centre’s Unified Pension Scheme and Andhra Pradesh’s assured pension model. According to internal assessments, the Tamil Nadu model appears more beneficial for employees.

At present, Kerala government employees contribute 10 per cent of their monthly salary towards the contributory pension scheme, which is deposited in the NPS. Key decisions still need to be taken, such as whether employees who exit the contributory scheme will receive their accumulated contributions back, how those funds should be managed, and from which date the new pension scheme should apply. Even if Kerala adopts the Tamil Nadu model, several changes will be necessary to suit the state's financial situation. If employee contributions are taken into the Public Account, it would impact the state’s borrowing limits.

Tamil Nadu model explained

TAPS is the abbreviation for the Tamil Nadu Assured Pension Scheme, introduced in place of the previous contributory pension system. It guarantees a pension amounting to 50 per cent of the last drawn salary (basic pay plus dearness allowance). Employees must contribute 10 per cent monthly, while the government bears the remaining cost required to ensure the assured pension.

In case of the pensioner’s death, the family will receive 60 per cent of the last pension drawn as family pension. The maximum gratuity admissible under the scheme is ₹25 lakh.