OPS vs NPS vs TAPS: Comparison of Pension Schemes: Key Highlights of TAPS (Tamil Nadu)
On January 3, 2026, the Tamil Nadu government officially announced the Tamil Nadu Assured Pension Scheme (TAPS). This scheme is a hybrid model designed to satisfy the long-standing demand for the restoration of the Old Pension Scheme (OPS) while maintaining the contributory framework of the National Pension System (NPS).
Below is the comparison between the newly launched TAPS, the NPS, and the OPS
| Feature | Old Pension Scheme (OPS) | National Pension Scheme (NPS) | TN Assured Pension Scheme (TAPS) |
| Basic Nature | Defined Benefit (Guaranteed) | Defined Contribution (Market-linked) | Assured Benefit (Hybrid) |
| Employee Contribution | Nil | 10% of Basic + DA | 10% of Basic + DA |
| Govt Contribution | Fully funded by State | 14% of Basic + DA | Full additional funding required to meet the 50% assurance |
| Pension Amount | 50% of last drawn pay | Depends on market returns | 50% of last drawn basic pay |
| Inflation Protection | DA hikes twice a year | None (depends on annuity) | DA hikes twice a year (matching active employees) |
| Family Pension | 60% of pension to spouse | Based on corpus/annuity | 60% of pension to spouse |
| Gratuity | Up to ₹20 Lakh | No fixed gratuity | Up to ₹25 Lakh |
| Minimum Pension | Fixed by Pay Commission | No guaranteed minimum | Guaranteed minimum pension (even for short service) |
| Risk Level | Risk-free | Market-linked risk | Risk-free for employee |
Also read: தமிழ்நாடு உறுதியளிக்கப்பட்ட ஓய்வூதியத் திட்டம் (TAPS): திட்டத்தின் சிறப்பம்சங்கள்
Key Highlights of TAPS (Tamil Nadu)
The TAPS is specifically tailored for State Government employees and teachers who joined after April 1, 2003.
- Last Drawn Pay Advantage: Unlike the Central Government’s Unified Pension Scheme (UPS)—which calculates pension based on the average of the last 12 months—the Tamil Nadu TAPS calculates it based on the last month’s basic pay, mirroring the original OPS benefit.
- Special Compassionate Pension: Employees who joined under the Contributory Pension Scheme (CPS) but retired before the implementation of TAPS will be eligible for a “special compassionate pension.”
- Lump Sum Gratuity: The retirement and death gratuity has been enhanced to a maximum of ₹25 Lakh.
- Fiscal Commitment: The Tamil Nadu government has committed an initial ₹13,000 crore to the fund, with an annual recurring contribution of approximately ₹11,000 crore to bridge the gap between employee contributions and the 50% guarantee.
Summary: Which is better?
- TAPS effectively acts as “OPS via the back door.” It provides the same security as the Old Pension Scheme (50% guarantee + DA) but requires the employee to continue the 10% contribution they were already making under the CPS/NPS.
- For Employees: It removes the market uncertainty of NPS while ensuring their pension grows with inflation (DA), which was the biggest drawback of the new system.
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