KERALA BUDGET '24

Kerala to implement revised pension scheme to address concerns over NPS

Thiruvananthapuram: In a bid to address the concerns among government employees about the new pension scheme, the Kerala government is planning to implement a revised scheme. Finance Minister K N Balagopal announced the decision as he presented the state budget on Monday.

“The insecurity created by the NPS has caused great concern among the employees. A three-member committee has been constituted to further examine the report of the committee appointed by the government to study its revision. The government is planning to review the NPS and implement a revised scheme that will provide security to the employees,” the minister said.

He said necessary action will be taken to get back the share given to the central government. A revised scheme will be formulated to implement an 'assured' pension system. New schemes of similar nature in other states will also be studied and necessary steps will be taken to implement in the state, he said.

The minister said Kerala is the only state which revised salary/pension for government employees/pensioners even during the Covid period. It has been revealed that Kerala accounts

for 42 per cent of the total appointments made through Public Service Commissions in the government sector in the country today, Balagopal said.

Under the Old Pension Scheme (OPS), a government employee gets a monthly pension equivalent to 50 per cent of their last drawn salary. There was no need for contribution by employees. The OPS was discontinued in the state in 2005.

Under the NPS, a state government employee contributes 10 per cent of his/her basic salary plus dearness allowance with the state making a matching contribution. The money is then invested in one of the several pension funds approved by the Pension Fund Regulatory and Development Authority (PFRDA) and the returns are market-linked.

The budget, presented amid a huge financial crisis, did not hike the social security pension amount. Social security pension is provided to approximately 62 lakh people in the state. The minister blamed the Centre for the delay in distribution of the aid.

“The Kerala Social Security Pension Company Limited, established to facilitate pension distribution, has accumulated Rs 35,000 crore, out of which Rs 24,000 crore has already been repaid. However, the central government's restrictions on mobilising funds through the pension company create obstacles, because the new policy of the Union government defines the fund mobilized by KSSPL as public debt, causing difficulties in pension disbursement. Moreover, the central government provides only nominal assistance for social security pensions, and even that is not disbursed on time,” the minister said.

He said the government will take special measures to ensure timely and accurate payment of social security pensions in the next financial year.