Thiruvananthapuram: In a significant move, the Kerala government is set to withdraw the existing Contributory Pension Scheme (CPS), replacing it with an Assured Pension System. Indications suggest that Finance Minister K.N. Balagopal will make the formal announcement in the Legislative Assembly soon.
This decision comes after the Finance Minister had initially announced the implementation of an Assured Pension System in the 2024-25 state budget. The shift is widely seen as a strategic move by the government, keeping the upcoming local body elections in mind.
The existing Contributory Pension Scheme currently covers approximately 2.50 lakh employees. The withdrawal of the CPS was a key promise made by the LDF in its 2016 election manifesto. However, despite coming to power, the promise was not acted upon, and even after securing a consecutive term in 2021, the government chose to strengthen the CPS instead of abolishing it.
Further controversy surrounded the scheme as the government reportedly raised a loan of about ₹6000 crore under the guise of the Contributory Pension Scheme. Despite strong protests from employee organizations against the government’s perceived double standards, the administration remained largely unresponsive.
While the decision to drop the CPS—albeit delayed—is now a reality with elections approaching, employees remain anxious about the details of the replacement scheme. Employee unions have been vocally demanding the reintroduction of the Old Pension Scheme (OPS) in place of the CPS, a demand the government appears unwilling to meet, opting instead for the new ‘Assured Pension System’.
