Tamil Nadu Chief Minister MK Stalin has unveiled a major welfare initiative for state government employees with the announcement of the Tamil Nadu Assured Pension Scheme (TAPS). Issued through a formal
Government Order by Finance Secretary Udhayachandran, the scheme came into effect from January 1, 2026, marking a significant shift in the state’s pension framework.
The key provisions outlined in the order are detailed below.
Who Will Come Under The Scheme
The government has announced that the assured pension scheme will be mandatory for all employees joining the Tamil Nadu government service on or after January 1, 2026.
In addition, employees who are currently covered under the Contributory Pension Scheme (CPS), as well as those who have retired on or after January 1, will also be eligible to opt for the assured pension scheme. Employees presently under the contributory pension scheme will be given the option to decide at the time of retirement whether they wish to continue under CPS or shift to the Tamil Nadu Assured Pension Scheme.
Pension Calculation And Contribution Structure
As previously announced, the pension amount will be calculated as 50% of the last drawn monthly salary, including basic pay and dearness allowance.
For this purpose:
- 10% will be deducted from the employee’s monthly salary
- The remaining contribution will be borne by the state government
Family Pension, Dearness Allowance And Gratuity
In the event of the death of a pensioner, 60% of the last pension drawn will be paid as family pension to the eligible family member.
The government order further states that dearness allowance will be extended to all retired employees and family pension recipients, in line with the dearness allowance granted to serving officers.
In the case of death during service or upon retirement, a maximum gratuity of Rs 25 lakh will be paid, depending on the length of service.
Special Compassionate Pension
The government order also mentions that a special compassionate pension will be provided to employees who:
- Joined government service on or after April 1, 2003, and
- Served until December 31, 2025
This compassionate pension will be calculated based on the total period of service.
Pension Commutation Facility
Similar to the old pension scheme, a portion of the monthly pension, known as pension commutation, can be availed in advance as a lump sum, subject to specified conditions.
Response From Employees’ Associations
In this context, Thyagarajan, State Coordinator of the JACTO-GEO organisation, thanked the Chief Minister for fulfilling his promise.
He expressed happiness that the pension substitution system had been introduced without employees having to demand it, stating that it would be particularly beneficial for those who require a guaranteed amount at the time of retirement.
Implementation Timeline
The Tamil Nadu government has clarified that the pension disbursement process will begin once the detailed rules, eligibility criteria, and operational guidelines are finalised.
Tamil Nadu Assured Pension Scheme: Q&A
1. When will the scheme be implemented?
The assured pension scheme will be implemented from January 1, 2026.
2. For whom is it mandatory?
For all employees joining government service on or after January 1, 2026.
3. Who is eligible to join the scheme?
Employees working under CPS and those who retired on or after January 1.
4. What options do CPS employees have?
They may choose at the time of retirement whether to continue under CPS or opt for TAPS.
5. How is the pension calculated?
50% of the last drawn salary, including basic pay and dearness allowance.
6. What is the employee’s contribution?
10% of the monthly salary; the remaining contribution will be paid by the government.
7. How much is the family pension?
60% of the pension last drawn by the deceased employee.
8. How is dearness allowance revised?
Dearness allowance will be increased in line with that granted to serving officers.
9. What is the maximum gratuity amount?
Up to Rs 25 lakh, based on the length of service.
10. Who is eligible for compassionate pension?
Employees who joined after April 1, 2003 and retired by December 31, 2025.
11. How is compassionate pension calculated?
Based on the total length of service.
12. What is the pension commutation facility?
A portion of the pension can be received as a lump sum at retirement, subject to conditions.
The Tamil Nadu government has reiterated that detailed eligibility norms and implementation guidelines for the assured pension scheme will be issued separately in the near future.
