Kerala govt delays decision on Unified Pension Scheme over poor finances
Officials said that the state’s severe financial crisis also prevented the government from adopting UPS.
Officials said that the state’s severe financial crisis also prevented the government from adopting UPS.
Officials said that the state’s severe financial crisis also prevented the government from adopting UPS.
Thiruvananthapuram: The Kerala Government has taken no decision on introducing the Unified Pension Scheme (UPS) in the state, even after the Union Finance Ministry notified its implementation for Central Government employees from April 1.
Incidentally, last year’s Kerala budget had proposed the withdrawal of the contributory pension scheme and the introduction of an ‘assured pension plan’ for state government employees. However, the government is yet to finalise the details of the new scheme. Even though the committee constituted by the government to create a framework for the purpose met once, it did not take any major decision.
Officials said that the state’s severe financial crisis also prevented the government from adopting UPS.
Incidentally, the Centre introduced the UPS soon after the state government announced its new assured pension scheme, causing confusion in the Kerala Finance Department over which scheme to adopt.
Moreover, in states such as Rajasthan which had decided to replace the contributory pension scheme with statutory pension, the BJP came to power in recent elections, defeating the earlier governments which had announced the shift. According to reports, such states are likely to continue with the contributory pension scheme or implement UPS.
Officials in Kerala Finance Department pointed out that many states were facing challenges in effectively abolishing the contributory scheme, causing a delay in adopting new plans.
They also said that UPS would create an additional financial burden for Kerala. Currently, while the state government contributes 10 percent of an employee’s salary to the pension fund, it has not implemented a recommendation of an experts’ panel to increase this share to 14 per cent. At the same time, the government’s share is 18.5 per cent under UPS, which the Kerala Government says that it cannot afford.
Meanwhile, around two lakh state government employees who are covered under the contributory pension scheme are eagerly looking forward to an announcement on the new pension scheme in the state budget to be presented on February 7.