Cashstrapped govt. stares at mounting retirement liability

The State government, which is struggling to raise funds to meet its immediate financial commitments, is faced with another uphill battle.

Thousands of employees are set to retire from services starting this year, and the government has a huge liability in the form of payment of retirement benefits to them.

This is because the previous Bharat Rashtra Samiti (BRS) regime enhanced the age of superannuation from 58 to 61 in 2021, as a result of which a few thousand employees continued in their posts. Now, the incumbent government has no way to extent the services of these employees.

According to information available, 7,995 employees, including 1,419 gazetted officers, 5,360 nongazetted officers and 1,216 class IV staff, are due to retire this year. Of these, around 500 retired from service on March 30 and more are to follow in the coming months.

The number of employees retiring in 2025 is little higher at 9,630 employees (1,687 gazetted, 6,695 nongazetted and 1,248 classIV). Likewise, the number of retirements in 2026 is around 9,700 (1,487 gazetted, 6,986 nongazetted and 1,246 classIV). The government has to refund the savings of these employees in the form of GPF, leave encashment (subject to a maximum of 300 days) and commutation pension.

Above gratuity

This is in addition to payment of gratuity and refund of contributions to life insurance and group insurance policies besides calculating the monthly pension, for which the retiring employees of the government are eligible.

The government, according to official sources, cannot delay payment of the dues in view of the Supreme Court judgments, which stated that retiring employees should be discharged honourably without keeping their dues pending.