Deccan Chronicle : Kochi- 24-07-2012
The state government, even while claiming that it had not seriously considered the option, is all set to increase the pension age of Government employees to 58 on July 25, the last day of the current Assembly session. Along with the pension age hike, the Government is planning to introduce the contributory pension scheme for new recruits.
The plan is to get the decisions ratified by the Cabinet on August 8. It was four months ago that the pension age was upped from 55 to 56. This session, the Chief Minister, Oommen Chandy, and the Finance Minister, K. M.Mani, dropped enough hints that the Government would go ahead with both a hike in pension age and the contributory pension scheme. “Every year, Rs.7,731 crore goes to pensions and this situation cannot go on for long,” Chandy had said.
Between 17,000 and 20,000 Government employees and teachers are expected to retire in the course of the year.If they are given another two years, the cashstrapped state government would save around Rs 375 crore this fiscal.
An employee is entitled to provident fund, gratuity and terminal surrender benefits within three months of retirement. Equally controversial will be the move to introduce contributory pension, though it is restricted to new recruits. The employee’s contribution to the fund will be matched or even bettered by the State Government’s share. However, employees’ organizations are worried that employees will have to bear risks associated with investing money in the contributory pension fund. The contributory pension fund, to be set up on the lines of the National Pension Scheme, will be invested in stocks.