By formulating the Tamil Nadu Assured Pension Scheme (TAPS), the DMK government has done its best to resist the temptation of returning to the Old Pension Scheme (OPS) for its employees. It has sought to strike a middle path in its implementation of a key electoral promise made before the 2021 Assembly election and the need for fiscal prudence. Apart from nearly two lakh employees under the OPS, there are around six lakh government staff under the Contributory Pension Scheme (CPS) since April 2003. It is this section that has been urging the DMK to fulfil its electoral assurance — OPS restoration. The new scheme, which blends the OPS and the Unified Pension Scheme (UPS) that is in force for central government staff for the last one year, assures pensioners 50% of the last drawn pay, while retaining the element of employees’ contribution — a feature common to the CPS and UPS. One can make out that the basis for the determination of the pension — 50% of the last drawn pay in the last month of service — and the provision of a minimum assured payout, regardless of the duration of service, are in favour of the employees. Death-cum-retirement gratuity, an OPS feature, has been included.
The announcement has been made just before the Assembly poll in April-May. There has also been a debate on the State’s outstanding debt — around 26.1% of GSDP, a ratio that has been declining over the last five years though not to the pre-COVID-19 pandemic level of around 21.5%. Besides, at least till 2033, when the last set of government staff covered under the OPS is expected to retire, the State government will have to provide for the retirement of OPS staff as well as its share of contribution for TAPS employees. The current financial year has not been very encouraging in terms of growth rate in the State’s Own Tax Revenue (SOTR), which generally accounts for about two-thirds of Tamil Nadu’s revenue receipts. In the first half (April-September) of the current year, the SOTR’s growth rate was 3.94% over the receipts in the corresponding period of the previous year, against the projected 22.6%. The State has its fingers crossed over the likely impact of the restructuring of GST (from September 22) on its finances. After the “successful” Bihar example where the ruling dispensation handed out election-eve doles, the managers of State finances now have limited space to counter any pressure from their political bosses to spend more. The employees should understand the circumstances in which the announcement has been made. The main factor against the OPS is the feature of pension reset with the implementation of recommendations of every Pay Commission. Though the principal Opposition party, the AIADMK, has pulled up the DMK for not having lived up to the poll promise, it has not promised to restore the OPS if it wins the Assembly poll. It appears that the leadership of the two Dravidian majors understand that the State should not be pushed into a perilous financial position.
Published – January 08, 2026 12:10 am IST
