The Andhra Pradesh Assembly passed the Andhra Pradesh Guaranteed Pension System Bill 2023. This new system ensures that every state government employee will get a fixed monthly pension equal to 50 percent of their last basic pay.
Amid growing demands from government workers to revive the old Pension Scheme (OPS) in various states, the Andhra Pradesh Assembly has recently approved the AP Guaranteed Pension Scheme (GPS). The AP Guaranteed Pension Scheme Bill was passed in the Assembly on Wednesday, resulting in the transfer of all state government employees from the Old Pension System (OPS) to the Contributory Pension System (CPS).
This decision has been taken in response to the continuous requests of the employees to review the Contributory Pension Scheme and review the feasibility of reviving the Old Pension System (OPS). Now, let’s analyze the pros and cons of the old pension system and the guaranteed pension system to determine which one provides the most favorable retirement benefits.
Features of Old Pension Scheme
Workers are entitled to a pension of 50% of their last salary.
This plan guarantees a lifetime source of income after retirement.
The government covers the full amount of pension for employees after retirement, and there is no requirement for deduction of salary during their service period.
Features of Guaranteed Pension Scheme
Workers will get a fixed pension equal to 50% of their last salary.
Additionally, dearness relief (DR) will be announced semi-annually to increase the pension amount.
This program guarantees a monthly spousal pension equal to 60% of the assured pension after the death of the pensioner. Retired government employees will get a monthly pension of at least Rs 10,000.
The plan will incorporate elements of modern and traditional pension schemes.
Individuals who have been fired, removed from service, or facing mandatory retirement due to disciplinary action will not be eligible for the program.
Guaranteed Pension System (GPS) vs Old Pension Scheme (OPS): What to choose for your retirement
The old scheme is generally provided to government workers, while the New Pension System (NPS) was extended in 2009 to all persons between the ages of 18 and 60. Guaranteed Pension Scheme Legislation by Andhra Pradesh Government will secure pension through NPS. Currently, NPS investments provide annual returns of 9 to 12 percent, along with tax benefits.
However, government employees will now be required to make monthly contributions based on their basic pay and dearness allowance, unlike the Old Pension Scheme (OPS), where government employees were not required to contribute anything.
First Published: 06 Oct 2023, 11:02 IST
Show your support for agrijournalism.
Dear Patron, Thank you for being our reader. Readers like you are our inspiration to advance agri-journalism. We need your support to continue delivering quality agri journalism and reach farmers and people in every corner of rural India.
Every contribution is valuable for our future.