University of Madras draws on pension and endowment fund to meet salary expenses

Amid acute financial constraintst, the Masras University has diluted the Contributory Pension Scheme Fund and Endowment Fund to disburse salary/pension and meet other obligatory expenses for the month of May 2023.

Amid acute financial constraints and a proposal for grant-in-aid pending with the State government, the University of Madras has diluted the Contributory Pension Scheme Fund and Endowment Fund to disburse salary/pension and meet other obligatory expenses for the month of May 2023.

According to sources in the institution, short-term deposits made from the Contributory Pension Scheme Fund and Endowment Fund to the tune of ₹7.6 crore, which matured in May 2023, were utilised to meet the shortfall for salary for staff, retired employees and other expenses. A decision has been taken to restore the money to the respective accounts upon receipt of the grant-in-aid from the government.

The sources said the university had a monthly recurring expense of about ₹18.61 crore in the form of salary to 779 teaching and non-teaching staff, pension to 1,463 retired teaching and non-teaching staff and family pensioners, payment for temporary staff, security service, electricity etc., There was no response yet on the proposal seeking grant-in-aid for ₹18 crore to meet these expenses for the month of May 2023 sent to the Principal Secretary, Higher Education Department.

As on May 31, 2023, the university had only ₹5 crore available in different accounts and there was a shortfall of ₹11.5 crore to pay the salary, pension and other day-to-day budgetary charges, which forced authorities to withdraw the pension and endowment funds as a temporary measure.

Delay in release of Block Grant by the State government, which is paid as salary of staff (sanctioned posts), non-reimbursement of payments to temporary and outsourced staff, guest lecturers etc., had crippled the financial stability of the university. The University of Madras and the Madurai Kamaraj University were the worst affected, the sources said.

A payment of ₹11.46 crore, which the university is entitled to as an additional grant cleared and forwarded to the Government by the Deputy Director, Local Audit Fund, for the year 2021-22 was also pending, the sources added.

When contacted, a section of the university staff said it was not aware that the pension contribution was diverted for some other purpose. “We have no information about the employer’s (university) share in the contributory pension scheme. There is no formal update on the details of the contribution, investment and growth of the pension fund,” a senior faculty member said.