Tamil Nadu Assured Pension Scheme (TAPS)

TAPS Explained: 50% Assured Pension, Fiscal Cost and Political Context in Tamil Nadu

With Assembly elections on the horizon, Tamil Nadu Chief Minister M K Stalin has announced the Tamil Nadu Assured Pension Scheme (TAPS) , a major policy shift aimed at addressing long-standing demands of state government employees and teachers. The move prompted employee unions to withdraw their proposed indefinite strike scheduled from January 6, signalling immediate political and administrative relief for the government.

What is TAPS?

TAPS guarantees a pension equal to 50% of the last-drawn monthly salary for eligible employees. Under the scheme, employees will contribute 10% of their basic pay to the pension corpus, while the state government will finance the remaining portion. This represents a partial rollback towards the Old Pension Scheme (OPS), which was fully government-funded, while retaining elements of contributory discipline.

Benefits for Pensioners and Families

Pensioners under TAPS will receive Dearness Allowance (DA) revisions twice a year , aligned with serving employees. In case of a pensioner’s death, the family will be entitled to 60% of the last-drawn pension . The scheme also assures gratuity up to ₹25 lakh , depending on years of service. Importantly, a minimum assured pension is guaranteed even for those who fall short of the qualifying service period. Employees who joined under the Contributory Pension Scheme (CPS) and retired without pension benefits will also receive compassionate pension support.

Fiscal Impact

The financial implications are substantial. The state is expected to make a one-time contribution of ₹13,000 crore , with an annual outgo of around ₹11,000 crore , subject to revisions. According to PRS Legislative Research , Tamil Nadu already allocates nearly 62% of its revenue receipts to committed expenditure—salaries, pensions, and interest—leaving limited fiscal space.

Political Context

While the ruling DMK had promised full OPS restoration in 2021, TAPS reflects a calibrated compromise. Unions under the JACTTO-GEO banner have welcomed the decision, with indications that implementation may begin from January 1, 2027 , after elections.

Important Facts for Exams

• Pension assured at 50% of last-drawn salary

• 10% employee contribution under TAPS

• DA hikes twice yearly

• Higher committed expenditure for Tamil Nadu