Thiruvananthapuram: The state government is set to issue an order this week clarifying the eligibility criteria for the guaranteed pension scheme. Modelled on Tamil Nadu’s system, Kerala’s scheme will provide a pension equivalent to 50 per cent of the sum of the last drawn basic pay and dearness allowance (DA). Both employees and the government will contribute 10 per cent each.

The new pension scheme will come into effect from April 1. Pensioners will be eligible for dearness relief, and provisions for family pension will also be included. An announcement regarding the appointment of a Pay Revision Commission is expected soon.

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The Finance Department is making efforts to issue all related orders before the end of this month, anticipating the announcement of the election code of conduct.

₹40,000 Crore Dearness Allowance Arrears to Be Merged with PF

Although dearness allowance has been granted to employees seven times since the present government assumed office, none of the arrears have been paid so far. The Finance Department estimates the total pending arrears at ₹40,000 crore. The Finance Minister had stated in the budget that a decision on the payment of these arrears would be announced shortly. Accordingly, an order to merge the arrears with the Provident Fund (PF) is expected soon.

However, it is yet to be decided whether the entire arrears amount will be merged at one go or in phases. A one-time merger would significantly increase the public account balance, potentially affecting the state’s borrowing capacity. The government also needs to determine from when withdrawals from the PF would be permitted.
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Employees receive their salaries for the previous month, and pensioners receive their pensions, in advance. Had the dearness allowance hike been ordered last month, pensioners would have received the increased amount this month itself.

For UGC, AICTE, and medical education teachers, the dearness allowance hike is nine per cent. Among pensioners in these categories, those whose pension revision has not been implemented will receive a nine per cent increase, while those whose revision has been implemented will receive a four per cent hike.