Kerala mulls contributory pension for new government employees

The Oommen Chandy government in Kerala is mulling introducing a contributory pension scheme for new government employees to ease the mounting financial burden on the exchequer.

Finance Minister K.M. Mani told the state assembly Monday that an explosive situation prevailed in the state as there were more state government pensioners than serving employees.

One way out of this, he said, was to introduce the contributory pension scheme and even increase the retirement age to 60 years. The government employees retire at 56 years.
At 74 years, life expectancy in Kerala is the highest in the country. The national figure stands at 63.5 years.

"We will shortly call a meeting of the youth organisations and also the organisations of the state government employees to discuss the introduction of a new contributory pension scheme to replace the present pension scheme. The proposed contributory pension scheme would be only for all new government employees who will join service," said Mani.

Currently there are more than 5.50 lakh state government pensioners, while the number of serving employees is 5.34 lakh.

"Kerala is the only state in the country where the retirement age is the lowest and may be we can consider to raise it to 60," said Mani.

With contributory pension, the liability of the state government comes down.
If this proposed scheme becomes a reality, then the employees will have to contribute a fixed sum every month and an equal or a scaled up amount would be put in by the state government.

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