Thiruvananthapuram, February 05, 2024 : Amidst purported concerns among government employees over the New Pension Scheme (NPS), the Kerala government has revealed its intention to introduce a revamped pension scheme. The announcement came from Finance Minister K N Balagopal during the unveiling of the state budget on Monday.
Committee Formation for Revision
Expressing the concerns raised by employees due to the insecurity caused by the NPS, Minister Balagopal revealed that a three-member committee had been formed to further analyze the report submitted by a previously appointed committee studying the need for revision. The government is actively considering a comprehensive review of the NPS to introduce a revised scheme aimed at providing greater security for employees.
Recovery of Central Government Share
To strengthen the proposed revised scheme, necessary measures will be taken to reclaim the share provided to the central government. Minister Balagopal assured that the government is committed to formulating an ‘assured’ pension system through the revised scheme. The state plans to study similar schemes implemented in other states and take necessary steps to incorporate them.
Kerala’s Initiatives
Highlighting Kerala’s commitment to its employees, Minister Balagopal emphasized that the state is unique in revising salary and pension even during the challenging Covid period. Kerala currently accounts for an impressive 42% of total government sector appointments made through Public Service Commissions in the country.
Old Pension Scheme vs. New Pension Scheme
Under the Old Pension Scheme (OPS), government employees received a monthly pension equivalent to 50% of their last drawn salary without any contribution required from them. However, the OPS was discontinued in 2005. The NPS, introduced thereafter, mandates a 10% contribution from state government employees, along with a matching contribution from the state. The funds are then invested in Pension Fund Regulatory and Development Authority (PFRDA) approved pension funds, with returns being market-linked.
Challenges in Social Security Pension Distribution
Despite the financial crisis, the state budget did not see an increase in the social security pension amount. Approximately 62 lakh people in the state benefit from social security pensions. Minister Balagopal attributed delays in aid distribution to the central government’s restrictions on mobilizing funds through the Kerala Social Security Pension Company Limited (KSSPL). The central government’s categorization of the funds mobilized by KSSPL as public debt has created obstacles in pension disbursement.
Future Measures for Social Security Pensions
Looking ahead, Minister Balagopal assured that the government would implement special measures in the next financial year to ensure the timely and accurate payment of social security pensions. The focus will be on overcoming challenges posed by the new policies of the central government and providing much-needed support to the beneficiaries.
