The Kerala Government has planned to bring in Contributory Pension Scheme for employees joining the State service from 2013.

The State Government has decided to take the step as the liability of the exchequer by way of pension payment was set to mount hugely in coming years if the Statutory Pensions Scheme was continued.

Countering the opposition LDF’s charge that such a decision would mean denial of long-enjoyed benefits to employees, Finance Minister K.M. Mani told the Assembly today that the switch over was not only essential to arrest fiscal collapse but also to safeguard the security of employees in the future.

Reeling out statistics, Mani said currently the State had a total of 5.50 lakh pensioners against 5.37 lakh serving employees and the gap was set to widen every year.

In 2001-02, the state required only Rs 1,838 crore to meet the annual pension commitment, which now stood at Rs 8,700 crore. This would steeply go up to Rs 41,180 crore in 10 years and to Rs 2 lakh crore in 20 years.

Rejecting the opposition charge that the government was running away from its responsibility by bringing in CPS, Mani said, in fact, the government would have to make an additional allocation of about Rs 72 crore a year as its contribution to the pension fund.

Under the proposal 10 per cent of the contribution would be made by the government and a matching quantum by the employee, he said.

(This article was published on December 11, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.