Government grapples with financial strain as mass retirements loom; Pension age extension under consideration

Thursday 09 May, 2024 | 12:42 AM READ MALAYALAM VERSION

THIRUVANANTHAPURAM: In times of severe economic crisis, mass retirements among employees pose a significant financial burden for the government. With 16,638 people set to receive pensions in May, the government faces a daunting task of finding 9151.31 crore rupees to cover their benefits.

As the Chief Minister is currently on a foreign trip, decisions regarding the extension of retirement benefits distribution and the potential one-year increase in pension age will be made upon their return. Age-related concerns may lead to opposition against consolidation making the second option more likely.

Additionally, the government is considering deferring the distribution by treating retirement benefits as a treasury investment with higher interest. Employees would have the option to choose this route. However, there's a concern within the Treasury that pensioners might resort to legal action if benefit distribution is delayed significantly, with each person entitled to receive between 14 lakhs to one and a quarter crores as pension benefits.

Furthermore, the economic crisis has been exacerbated by strict restrictions on public credit availability imposed by the central government. The state government has yet to receive notification regarding the loans available for the year, worsening the financial situation. Efforts to unify have faced opposition, complicating matters further.

K Mohandas Pay Revision Commission has recommended raising the pension age for government employees and teachers to 57, up from the current 56. Members of the Participatory Pension Scheme can continue until the age of 60, while the pension age in state public sector institutions is 58. Although there was a previous attempt in 2022 to raise the pension age to 60 in public sector institutions, it was withdrawn due to opposition. A committee has also been appointed to study the revision of pension age for employees of KSEB, KSRTC and the water authority. Pensionable ages vary, with it being 60 years for Central Service and 58 years in Karnataka and Tamil Nadu states.

Projected number of people set to be pensioned until 2026-27

- 2023-24: 21,604

- 2024-25: 22,185

- 2025-26: 23,424

- 2026-27: 23,714

Regarding pension ages

- Common age: 56

- Public Sector Undertaking: 58

- NPS participants: 60

- Medical and Dental College Doctors: 60

- Ayurveda College Teachers: 60

- Nursing College Teachers: 60