Tamil Nadu Assured Pension Scheme: Who gains, how it works, and from when

Tamil Nadu Assured Pension Scheme will provide state government employees with a guaranteed monthly pension of 50% of their last-drawn salary alongside inflation-linked dearness allowance benefits

Tamil Nadu has replaced its two-decade-old pension framework with a new system that promises assured retirement income while retaining employee contributions. The Tamil Nadu Assured Pension Scheme (TAPS), which was announced earlier this month, seeks to combine features of the Old Pension Scheme (OPS) and the National Pension System (NPS).

 

TAPS will give state government employees a guaranteed pension linked to last-drawn salary, along with dearness allowance (DA) benefits.

 

Why Tamil Nadu introduced TAPS

Tamil Nadu had been following the Contributory Pension System (CPS) since April 1, 2003, even after the central government introduced NPS. After the central government rolled out the Unified Pension Scheme (UPS) from April 1, 2025, the state constituted a committee to examine pension alternatives.

 

 

The panel reviewed OPS, CPS and UPS, and submitted its report in December 2025. Based on its recommendations, the state government decided to introduce TAPS, formally replacing CPS.

 

When will TAPS take effect?

TAPS will apply to Tamil Nadu government employees from January 1, 2026. However, payments will begin only after detailed rules are notified and statutory and accounting processes are completed.

 

Key features of TAPS

The scheme offers several defined benefits:

 

Assured pension: Eligible employees will receive a monthly pension equal to 50 per cent of their last-drawn basic pay plus dearness allowance.

 

DA protection: Pensioners and family pensioners will receive DA hikes in line with serving state government employees.

 

Employee contribution: Employees will contribute 10 per cent of their monthly salary. Any additional funding requirement for assured pension will be met by the state government.

 

Family pension: In case of the pensioner’s death, eligible family members will receive 60 per cent of the last-drawn pension.

 

Gratuity: Gratuity will be paid based on length of qualifying service, subject to a maximum limit of Rs 25 lakh.

 

Joining TAPS

Employees joining Tamil Nadu government service on or after January 1, 2026 will be mandatorily covered under TAPS.

 

CPS-covered employees retiring on or after January 1, 2026 will also come under TAPS, subject to notified rules.

 

Options for existing CPS employees

Employees who were in service before January 1, 2026 and covered under CPS will be given a choice at retirement. They may opt for TAPS benefits or retain CPS-equivalent benefits, as per rules yet to be notified.

 

Employees who retired under CPS before TAPS implementation will receive a special compassionate pension, proportionate to their service length.

 

The state government has said detailed operational guidelines, eligibility conditions and commutation rules will be notified separately. Until then, employees will need to wait for clarity on the finer details of the scheme.