Election defeat became eye-opener; farewell to contributory pension, assured pension to replace old scheme

THIRUVANANTHAPURAM: The state of Kerala will withdraw from the Contributory Pension Scheme implemented for government employees and teachers. The government was forced to take a decision on the issue that had been postponed for ten years due to the huge setback it faced in the local body elections. The Assured Pension Scheme implemented by the Central government last April will replace the old pension scheme. Finance Minister KN Balagopal clarified that the process is in the final stages.

The central model-assured pension was implemented by the states of Maharashtra, Haryana and Uttarakhand. Last month, Tamil Nadu launched its own specific scheme, which is a hybrid model. It was a statutory pension till 2013. The Contribution Pension Scheme was implemented considering statutory pension to be a huge liability. The minimum amount in the statutory pension was Rs. 5,000 and the maximum amount was half of the average salary received in the last ten months. There is no such thing as a minimum pension in the Contribution Pension. The pension is based on service. There are even some who get a monthly pension of Rs. 455. Most people in the state enter service at the age of 35-40. They reach pension age after 15-20 years and retire. This is what has caused dissatisfaction with the Contribution Pension.

Minimum pension of Rs 5,000 will be ensured

It is indicated that a minimum pension of Rs 5,000 on the statutory pension model and a pension of 30 to 40% of the salary received in the last ten months are being considered. Gratuity will be less than the contributory pension and more than the statutory pension. The current gratuity is Rs 17 lakh for statutory pension and Rs 25 lakh for contributory pension.

Steps are underway to implement the assured pension. It was announced in the last budget. It will be a big relief for the employees "

KN Balagopal,

Finance Minister