In a major relief to lakhs of government employees and teachers, Tamil Nadu Chief Minister M K Stalin on Saturday (January 3) announced the implementation of the Tamil Nadu Assured Pension Scheme (TAPS), a new pension plan designed to provide benefits equivalent to the old pension scheme (OPS).
The announcement ends a two-decade-long demand from state employees who have been under the Contributory Pension Scheme (CPS) since 2003. The timeline for the new scheme’s implementation was not announced immediately.
Govt following Kalaignar’s path: CM
Describing government employees as the “wheels of the administration vehicle” that deliver welfare schemes to the last mile, Stalin emphasised on the Dravidian Model’s commitment to their welfare. “This government, following the path of Kalaignar Karunanidhi, has always prioritised the well-being of government servants and teachers,” the Dravida Munnetra Kazhagam (DMK) chief said.
What TN’s new TAPS pension scheme provides
- 50 per cent of the last drawn salary as assured pension
- Government to bear the full additional contribution beyond employees’ 10 per cent share
- Dearness Allowance hike every six months, matching serving employees
- 60 per cent family pension to nominees upon the pensioner’s death
- Gratuity up to Rs 25 lakh
- Minimum pension for those retiring without full qualifying service
- Special compassionate pension for those who retired under CPS without benefits
The TAPS scheme, which guarantees, among other provisions, 50 per cent of the last drawn salary as assured pension; government bearing the full additional contribution beyond employees’ 10 per cent share; hikes in the Dearness Allowance (DA) every six months, matching the serving employees; and gratuity up to Rs 25 lakh, will cost the state an initial Rs 13,000 crore, with an annual commitment of around Rs 11,000 crore (which is likely to rise).
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The government has committed itself to the full funding of the scheme despite various fiscal challenges, including reduced shares in central tax and Goods and Services Tax (GST).
DMK govt’s pro-employee initiatives since 2021
The DMK government has implemented several employee-friendly measures since assuming power in 2021, which they include: Restoring DA hikes on a par with the Centre; reintroducing earned leave encashment from October 2025; Unique insurance, which includes Rs 1 crore for death in accident, and Rs 10 lakh for natural death; enhanced educational and marriage advances; higher house-building advance (up to Rs 50 lakh); increased retirement gratuity to Rs 25 lakh and medical insurance to Rs 10 lakh for pensioners; and extending maternity leave to 12 months.
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A committee headed by Tamil Nadu Additional Chief Secretary Gagandeep Singh Bedi studied the issue and submitted its report, leading to high-level consultations before the final decision. Stalin appealed to employees and teachers to extend full cooperation for the smooth implementation of the scheme.
Employee unions welcome scheme
Employee unions, including JACTTO-GEO (Joint Action Council of Tamil Nadu Teachers’ Organisations and Government Employees’ Organisation), had threatened an indefinite strike from January 6, demanding full restoration of the OPS. Leaders of JACTTO-GEO have now thanked Stalin, saying the new initiative puts an end to the uncertainty faced by those with no pension.
While some unions expressed optimism about the latest announcement, others may still review whether TAPS fully meets their demands. Talks with unions were held recently, and the government hopes the new scheme averts industrial action.
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The unions hailed the new scheme as a fulfilment of their long-standing demand, effectively ending a 23-year struggle against the uncertainty of the CPS.
Unions look forward to implementation
Leaders of JACTTO-GEO told The Federal“Our 23-year-long agitation has come to an end today. We thank the chief minister for putting a full stop to the pension-less retirement scenario. We welcome the government’s announcement wholeheartedly. As expected, the CM has delivered, and even beyond expectations by guaranteeing 50 per cent of the last drawn salary as pension.”
They also expressed delight over provisions for special compassionate pensions for approximately 48,000 employees who either retired or passed away under CPS since 2003, without benefits.
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“We believe the new assured pension scheme will be implemented in this financial year itself,” they added.
The unions also expressed hope that the chief minister would address their remaining demands in the near future.
New pension scheme ahead of state polls
With Assembly elections due in a few months, the announcement has addressed many of the ruling party’s headaches. Protests by government employees, teachers, and sanitation workers had intensified in recent months.
Political observers believe the move, despite financial pressures from reduced central funds and GST impacts, will garner strong support among over six lakh government staff members and their families, strengthening the DMK’s position against anti-incumbency challenges.
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