impractical AIADMK general – AIADMK general secretary Edappadi K. Palaniswami’s refusal to commit to the reinstatement of the Old Pension Scheme (OPS) for state government employees and teachers reflects his realization that it is not sustainable in the long run.
Speaking to reporters in Salem on Pongal day (January 15), Mr Palaniswami was asked whether he would go back to OPS in the event of his party’s victory in the Assembly elections. His response was that a decision would be taken “depending on the situation”.
He said his party would make “only those promises that are feasible”. Also, he criticized the ruling DMK for not living up to its 2021 election assurance on OPS. Chief Minister M.
K. Stalin had announced a few weeks ago that his government would implement a mix of Tamil Nadu Assured Pension Scheme (TAPS), OPS, the central government’s Unified Pension Scheme (UPS) and Andhra Pradesh Guaranteed Pension Scheme (APGPS). TAPS, which envisages payment of a monthly pension, has retained the element of contribution, as found in the Contributory Pension Scheme (CPS) or the National Pension System (NPS).
About 10 days ago, the Tamil Nadu government issued an order that the new scheme will come into effect from January 1. Over the past five years, there has been a trend in some states to revert to OPS. States like Rajasthan, Jharkhand and Chhattisgarh have announced return to OPS.
However, the Reserve Bank of India and many economists have generally cautioned state governments against reverting to the old scheme, arguing that the move would result in increased unfunded liabilities in the coming years. Moreover, as pointed out in the Tamil Nadu government white paper presented in August 2021, the government had in the past resorted to borrowing even for non-discretionary expenditure items, including pension payments, which was one of the important components of committed expenditure. With increasing life expectancy, the number of pensioners and family pensioners in the state has been stabilizing at around seven lakh for some time now.
Demographic data on pensioners shows that between 2017 and 2025, the number of pensioners aged 80 and above increased by 1. 7 times – from 41,489 to 1,13,380. It’s no surprise that year-over-year growth in pensions and other retirement benefits has generally been in double digits.