CHENNAI: With just months to go for the Assembly election, Chief Minister M K Stalin on Saturday announced the ‘Tamil Nadu Assured Pension Scheme (TAPS)’ for state government employees and teachers, guaranteeing a pension equal to 50% of their last-drawn monthly salary. Employee unions that had threatened to launch an indefinite strike from January 6 have now withdrawn their protest after the announcement.
As per TAPS, which comes after the 23-year struggle of government staff for restoration of the Old Pension Scheme (OPS), the employees will contribute 10% of their basic salary to the pension corpus and the state will bear the rest. Under OPS, the government was bearing the entire pension fund contribution.
“Despite financial constraints, the state government will fully bear the cost of implementing TAPS to safeguard the welfare of government employees and teachers,” the CM said in a statement, which, significantly, does not mention the date on which TAPS will take effect. However, in what could be a dampener to the unions, top government sources told TNIE that it was expected to come into force from January 1, 2027 — months after the Assembly election this year.
The financial burden on the state is expected to go up steeply under TAPS, with a one-time contribution of Rs 13,000 crore to the pension fund and additional contribution of Rs 11,000 crore every year.
The yearly contribution will also be revised periodically in line with the increase in salary. Though the DMK government had made this announcement at the fag end of its term, the labour unions have welcomed it.
Stalin, in his statement, said that pensioners will be eligible for Dearness Allowance (DA) hikes every six months on par with serving gover nment employees. In the event of a pensioner’s death, 60% of the last-drawn pension will be paid as family pension to the nominated family members. Besides, gratuity up to Rs 25 lakh will be paid on retirement or in the event of death during service, based on the length of service.
The CM said that the TAPS also ensures a minimum pension for all employees who retire without completing the qualifying service period for pension. Employees who joined service under the Contributory Pension Scheme (CPS) and retired without a pension before the implementation of TAPS will be provided a special compassionate pension.
According to the PRS Legislative Research regarding the 2025-26 state budget, the TN government is estimated to spend Rs 2,07,054 crore on committed expenditure, which is 62% of its estimated revenue receipts. This comprises spending on salaries (28% of the revenue receipts), pensions (14%) and interest payments (21%). With the implementation of TAPS, these expenditures may rise further.
Immediately after the announcement, representatives of JACTTO-GEO, including office-bearers of various unions, called on the CM at his chamber, presented sweets and thanked him profusely.
Considering the long-pending demand of employees seeking restoration of OPS, the state government had appointed a committee under IAS officer Gagandeep Singh Bedi to make suitable recommendations. The panel had submitted its report to the CM a few days ago. The DMK had promised to implement the Old Pension Scheme in its poll manifesto for the 2021 Assembly election.