Conundrum of salary, pension and settlements in Madras University

CHENNAI: After a considerable delay, University of Madras has finally begun paying terminal benefits/settlements to staff retired between April 2015 and September 2025, as per the orders of the Madras High Court.

However, the tasks of paying pensions, salaries for existing staff, and even maintaining the university's simple functioning seem to be in a deep quandary – for now and in the coming years.

Justice N Anand Venkatesh of MHC in November directed Madras University to pay the terminal benefits to 87 teaching staff, 249 non-teaching staff and 129 family pensioners, for a total amount of Rs 95.44 crore. But the university that is already facing a deep financial crisis had to resort to the 'corpus fund', raising eyebrows among stakeholders.

According to a source in the university, out of Rs 318 crore in the corpus fund, the university has so far withdrawn Rs 45 crore and the Tamil Nadu government has shared Rs 20 crore with the management to pay the pending terminal benefits ordered by the court.

Speaking to DT Next, a senior administrative staff member of the university said, "A few of the retired staff awaiting the benefits have already expired, with their children anticipating the settlement. Hence, without further delay, it is only wiser for the university to finally settle the pending amount. And, the TN government had also assured support in settling the benefits."

The corpus fund was created in the 1980s by the then professor and Vice-Chancellor Ramachandran, solely to provide a pension to the retired staff, as the university's finances were reasonably sound at that time.

As far as the corpus fund is concerned, Rs 400 crore was accumulated in the 1980s during its creation and interest earned, ranging between 9.5 per cent and 10.5 per cent, which was utilised for pension disbursement. Until 2015, the corpus fund generated approximately Rs 38 crore per annum. However, this income declined due to global reductions in interest rates.

Currently, as per sources, the fund has decreased to around Rs 318 crore, generating an annual interest income of only Rs 18 crore to Rs 20 crore per year.

"Although this amount is not sufficient to fully meet the pension requirements, it still helps reduce the burden to some extent. The corpus fund remains the backbone of pension disbursement," said K Kathiravan, the state convener of Tamil Nadu Federation of Universities Faculty Association (TANFUFA).

But, all is still not well, allege university staff and educationalists.

"Let's make it clear that the university has only paid pending benefits to a handful. But, it still faces financial difficulty to pay staff retiring in the future and even pay salaries for existing staff because the TN government is yet to pay a 'block grant' for at least eight years," said a senior professor of the university.

Though in the yearly budget a certain amount is allocated for higher education, in the case of Madras University, these funds are utilised for development and technology advancement. Hence, to pay the monthly salary, the government disperses a 'block grant' every year, which has been pending.

"Due to non-payment of block grants, the university is paying salaries for staff and professors through the fees paid by students. And, this redirection of funds affects students. Hence, it is only vital that the government takes over the finances, such as providing salary, pension and settlement from the Madras and Madurai Kamaraj University," noted Kathiravan.