Kerala Contributory Pension Review Committee recommends hike in Govt contribution

The report of the Contributory Pension Review Committee, which was finally released on Monday after more than two years, recommends, among other things, that the State Government should increase its contribution to the scheme.

"The committee recommends that the Kerala government should raise its contribution to the Contributory Pension Scheme subscribers from the current 10% of salary and dearness allowance to 14%, as done by the Central government and many other State governments," it states.

The report notes that the benefits from the scheme will start becoming visible in State spending around 2040.

From a long-term perspective, the continuation of the Contributory Pension Scheme will lead to a reduction in the pension outlay as a portion of the government's total revenue receipts, starting around 2040, according to its observations.

"As a result, more resources will become available for capital expenditures or spending on health, education, and other social services," it adds.

The 116-page report, submitted to the government in 2021, was not disclosed to the public. A copy of it was handed over on Monday to Jayaschandran Kallingal, the general secretary of the Joint Council of State Service Organizations, following a Supreme Court order.

Mr. Kallingal had initially requested a copy under the RTI Act, and when he didn't receive it, he approached the High Court. However, the High Court ruled in favor of the government. Subsequently, Mr. Kallingal approached the Supreme Court.

The committee has recommended that government employees whose recruitment was finalized on or before April 1, 2013, but whose joining was delayed for administrative reasons, should be given the option to join the statutory pension scheme.

Furthermore, the committee suggests that death-cum-retirement gratuity should be made available to employees who have joined the contributory pension scheme. Ex gratia pension should be paid to subscribers of the scheme with less than ten years of qualifying service. As in the case of statutory pensioners, those opting for ex gratia pension must forego service gratuity, it said.

The Joint Council of State Service Organizations, in a statement, welcomed the government's decision to provide a copy of the report. The report does not mention any legal obstacles to withdrawing the contributory pension scheme.

In fact, the report's findings are a setback to the argument that the scheme cannot be discontinued. The council urged the government to discuss the report with service organizations and reinstate the old pension scheme.