Thiruvananthapuram: The state government is not likely to revoke or modify the contributory pension scheme soon. Instead, it might follow the Andhra Pradesh model, considering indications that the central government might revamp the scheme.
In Andhra Pradesh, the contributory pension scheme allows the pensioner to draw half of the last-drawn basic pay. Though most non-BJP-ruled states in the country replaced the contributory pension scheme with the statutory pension scheme, Andhra Pradesh preferred to take a different route.
The Center's move to modify the contributory pension scheme comes against the backdrop of the political challenge the BJP has been facing with the opposition-ruled states shifting to the statutory pension mode. Indications are that the Center would initiate the move after the elections to the five state assemblies.
A study by the Andhra Pradesh government found that pensioners would be getting only 25% of the last-drawn basic pay if the state followed the contributory pension scheme. The government decided to put in the remaining amount so that the pensioners would get half of the last-drawn monthly basic pay.
Besides adopting the Andhra model, the contributory pensioners would hugely benefit if Kerala allowed death-cum-retirement gratuity (DCRG) and ex-gratia pensions and increased the government's share of the pension fund to 14%.
Statutory Pension
The mean of the last 10 months' basic pay will be divided by two before multiplying it by the number of years in service. The result will then be divided by 30. This will be the monthly pension. This scheme will allow the pensioner to draw almost half of the basic pay that was last drawn. The pensioner will also get dearness relief twice a year.
Contributory Pension
The government and the employee in service deposit 10% each of the basic pay and dearness allowance. The employee could withdraw 60% of the amount on retirement, and the pension would be provided from the 40% in the account.
The Andhra Model
If the contributory pension amount is less, the government will provide the rest. Dearness relief of 5% each will be provided twice a year to tide over the price hike. The government will ensure a 60% family pension, and the pensioner gets a minimum of Rs 10,000 every month as a pension.
