Tamil Nadu’s latest pension scheme seeks to fill inter-generational gap
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Prelims + Mains·
Why in news
The Tamil Nadu government introduced the Tamil Nadu Assured Pension Scheme (TAPS) to address inter-generational equity by requiring government employees to contribute to their own pensions.
Background
The Tamil Nadu Assured Pension Scheme (TAPS) requires government employees to contribute a portion of their pension, unlike the Old Pension Scheme where the government bears the entire cost. The scheme is a response to Tamil Nadu's aging population and rising old-age dependency ratio.
Facts for Prelims
- SchemeTAPS: Tamil Nadu Assured Pension Scheme requiring employee contributions
- FactOld Pension Scheme: Burden of pension costs borne entirely by the government
- FactDemographic factor: Tamil Nadu faces an aging population and rising old-age dependency ratio
For Mains
Q. Discuss the fiscal implications of transitioning from defined-benefit to defined-contribution pension models in the context of India's aging population.
Dimensions to cover in your answer
- Fiscal sustainability: Reducing the long-term burden on the state exchequer from non-contributory pension liabilities
- Inter-generational equity: Balancing the pension benefits of current retirees with the fiscal space for future generations
- Demographic pressure: Addressing the rising old-age dependency ratio in states with aging populations
Keywords: inter-generational equity · fiscal sustainability · defined-contribution · old-age dependency ratio · public finance
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