Tamil Nadu Restores Old Pension Scheme: Will Kerala Follow the ‘Stalin Model’ or Remain in Limbo?
THIRUVANANTHAPURAM – In a landmark move for labor rights, Tamil Nadu Chief Minister M.K. Stalin has officially implemented the rollback of the Contributory Pension Scheme (CPS), delivering on a long-standing demand of government employees.
The decision restores a structured pension system where retirees are guaranteed 50% of their last drawn basic pay. Key highlights of the restored scheme include:
- Inflation Protection: Monthly pensions will now include Dearness Relief (DR) adjustments.
- Enhanced Security: Employees are eligible for Death-cum-Retirement Gratuity (DCRG) benefits of up to ₹20 lakh.
The implementation comes as a strategic victory for employee unions, who had recently threatened industrial action across Tamil Nadu.
The Kerala Contrast: A Seven-Year Wait
While Tamil Nadu moves forward, the neighboring state of Kerala remains stagnant. Despite the first Pinarayi Vijayan government appointing a review committee to study the CPS withdrawal, the resulting 2018 report continues to gather dust.
Critics point out that while the Central Government and several other states have extended DCRG benefits to CPS employees, Kerala has remained firm in its refusal. Former Finance Minister T.M. Thomas Isaac and current Finance Minister K.N. Balagopal have consistently maintained in the Legislative Assembly that such benefits are not mandatory for those under the contributory system.
Fiscal Concerns and Pending Files
Financial data reveals that since 2022, the Kerala government has been borrowing approximately ₹2,000 crore annually specifically to cover contributory pension liabilities. Despite this mounting financial pressure, the file containing the review committee’s recommendations has reportedly been sitting on Minister Balagopal’s desk since July 2021.
As Tamil Nadu sets a new precedent with the “Stalin Model,” the pressure is mounting on the LDF government in Kerala. Employees are now asking: Will Kerala honor the 2018 recommendations, or will the state continue to delay action as pension liabilities grow?
