THIRUVANANTHAPURAM: Finance Minister K N Balagopal on Thursday said Kerala has continued to grow despite what he described as severe neglect and financial suffocation by the central government. Presenting the budget in the state assembly, the minister announced a series of major benefits for government employees, including the introduction of an assured pension scheme.
Balagopal said a new pay revision commission will be constituted soon, and its report is expected within three months. He announced that the existing contributory pension scheme will be replaced with an assured pension scheme. The minister also said that all pending dearness allowance (DA) and dearness relief (DR) arrears will be fully cleared, with the first instalment to be paid in February and the second along with March salaries.The assured pension scheme will come into effect from April 1, and related government orders will be issued shortly. Under the new system, employees will be guaranteed a pension equal to 50 percent of their last drawn basic pay. The major setback suffered by the LDF in the local body elections pushed the government to take a decision on this issue, which had been delayed for nearly ten years. The central government had implemented the “Assured Pension” scheme last April. States like Maharashtra, Haryana, Odisha, and Uttarakhand had adopted it earlier. Tamil Nadu switched last month, too.The contributory pension scheme was introduced in 2013 after the statutory pension system was found to be financially burdensome. Under the statutory pension system, the minimum pension was Rs 5,000, with a maximum of 50 percent of the average salary of the last ten months of service. In contrast, the contributory scheme had no minimum pension, resulting in some retirees receiving as little as Rs 455 per month. Most government employees in Kerala join service between the ages of 35 and 40, and retire after 15 to 20 years of service, leading to inadequate pensions under the contributory system.The new assured pension scheme aims to address these concerns by ensuring a minimum pension of Rs 5,000 along with 30 to 40 percent of the average salary of the last ten months. Gratuity under the new scheme will be lower than that provided under the contributory pension system, but higher than the statutory pension scheme. At present, the maximum gratuity is Rs 17 lakh under the statutory system and Rs 25 lakh under the contributory scheme.
