Andhra Pradesh government is soon going to implement Guaranteed Pension Scheme 2023. The new AP Jagananna GPS scheme comes amid calls to revert to old pension scheme (OPS). The central govt. officials are attracted to AP Guaranteed Pension Scheme (GPS) because "it combines the elements of both the OPS and the New Pension Scheme (NPS)". Read this article till the end to know complete details of Guaranteed Pension Scheme in Andhra Pradesh.

Guaranteed Pension Scheme (GPS) in Andhra Pradesh

Guaranteed pension scheme was proposed for first time in April 2022. It offers a guaranteed pension of 33% of the last drawn basic pay without any deduction to the state government employees. For this, they would need to contribute 10% of their basic salary every month, and the state government will provide matching contribution.
In case employee is willing to contribute a higher 14% every month, they will receive a guaranteed pension of 40% of their last drawn salary. Also market conditions will not influence the pension under GPS, which is nearly 70% higher than the current pension being offered under NPS or CPS, in line with the current interest rates.

Jagananna GPS to offer Higher Pension than NPS or CPS

AP state government mentioned that the NPS or CPS would give lower returns than the GPS, but the central govt. denied it. The guaranteed pension scheme was proposed to replace the Centre's national pension system (NPS), which is also called the contributory pension scheme (CPS) in Andhra Pradesh state.

Employee Unions Protest for Old Pension Scheme (OPS) Implementation in AP

While the state government is looking to implement the Jagananna GPS scheme, several employees have voiced their opposition to the guaranteed pension scheme in Andhra Pradesh. As per media reports, employees want to shift to the old pension scheme (OPS) only. Last year, several teachers in the state organised a "Chalo Vijayawada" yatra asking the YS Jagan Mohan Reddy government to bring back the OPS.

Employee unions in the state believe that GPS is no better than CPS. They recalled that a similar plan to guarantee 50% of pension recommended by the Thakkar Committee during the previous N Chandrababu Naidu-led Telugu Desam Party (TDP) government which was rejected too.

The employee unions have also mentioned that GPS, like CPS, involves payment of 10% of basic pay by both the government and the employee concerned. The government projects GPS as a 65% rise in the pension over the estimated 20% return on their contributions under CPS. This, according to them, "is nothing short of a jugglery of statistics by the government".

But the state government reportedly believes that shifting to OPS would take its budget outflow on account of pension and salaries to Rs. 1,85,172 crore in 2023. Currently, it is expected to touch Rs. 76,590 crore.

Data is a reworked version of article published in Business Standard GPS article.