CHENNAI: With just months left for the 2026 Assembly polls, a three-member committee constituted to examine pension models for government employees has submitted its report to Chief Minister MK Stalin.
The panel, headed by senior IAS officer Gagandeep Singh Bedi, with economist KR Shanmugam as member and IAS officer Pratik Tayal as member-secretary, studied the Old Pension Scheme (OPS), the Contributory Pension Scheme (CPS) and the Unified Pension Scheme (UPS).
Details of the committee’s recommendations have not been made public. However, sources indicate that the State may consider adopting a model aligned with the Unified Pension Scheme (UPS) introduced by the Union government in January this year, instead of continuing with CPS.
The UPS, effective April 1, 2025, for central government employees, is a hybrid model that combines the guaranteed benefits of OPS with the funded structure of the National Pension System. It assures 50% of the last 12 months’ average basic pay after 25 years of service, with proportionate benefits for 10 to 25 years.
It ensures a minimum monthly pension of Rs 10,000 with Dearness Relief, along with a 60% family pension for the spouse and a lump sum payout at retirement.
The contribution ratio is 10% by the employee and 18.5% by the government. The scheme is designed to balance assured financial security with long-term fiscal sustainability.
CPS has been in force for State government employees who joined service on or after April 1, 2003. OPS was discontinued citing financial sustainability concerns. The committee held nine rounds of consultations with 194 employee unions before finalising its recommendations.
Meanwhile, pressure is mounting on the government as employees and teachers demand a return to OPS, a key promise made by the ruling DMK. The Joint Action Council of Tamil Nadu Teachers’ Organisations and Government Employees’ Organisations (JACTO-GEO) has announced an indefinite statewide strike from January 6.
The organisation said CPS offers no guaranteed post-retirement security and insisted that OPS must be restored to ensure financial stability for lakhs of serving personnel. The union has also sought filling of long-pending vacancies, pay revisions and improved service conditions.
With schools, government offices and key public services likely to be affected, JACTO-GEO has urged the State to engage in fresh talks and resolve the issue amicably. The government is expected to review the committee’s report along with its financial position before taking a final call on the pension model.
Pension & Expenditure
OPS beneficiaries: 6,94,174 pensioners & family pensioners
CPS beneficiaries: 43,912
Govt staff & teachers under CPS: 6,24,140
Govt Staff: 5,07,822
Aided school teachers: 46,621
Panchayat Union schools: 38,621
Municipal school staff: 1,793
Local body employees: 29,283
Financial Year wise Expenditure for Pension & other benefits (Rs in crore) :
2020- 21: Rs 27,115.07
2021-22: Rs 26,260.37
2022-23: Rs 32,177.50
2023-24: Rs 37,696.81
2024-25: Rs 42,509.25
OPS: Old pension scheme
CPS: Contributory Pension Scheme
Employees who have been appointed after 01-04-2003 are covered under CPS