The Andhra Pradesh cabinet announced its approval to replace the Contributory Pension Scheme (CPS) with the Guaranteed Pension Scheme (GPS) for government employees. The move is aimed at providing enhanced financial security and benefits to pensioners. Under GPS, pensioners will now receive 50% of their last drawn pay as pension, which is significantly higher than the 20.3% received under CPS . This change is a positive step towards prioritizing the welfare of retired government employees and acknowledging their dedicated service.
Workers’ Demands and Government’s Response
- Government employees including teachers have been continuously demanding restoration of Old Pension Scheme (OPS) and closure of CPS.
- The Andhra Pradesh cabinet’s decision is a response to those demands, indicating its willingness to address the concerns and aspirations of the employees.
Comparison of CPS and GPS
- Under CPS, employees who joined service after September 1, 2004, contribute 10% of their basic pay towards pension, with the government contributing an equal amount.
- After retirement, employees were able to withdraw 60% of the pension corpus, while the remaining 40% remained annuity investments subject to market fluctuations.
- In contrast, under GPS, pensioners will receive 50% of their basic pay as pension in the last drawn pay, with the same 10% contribution rate.
- Dearness Relief (DR) announced by the Central Government every six months will be extended to GPS pensioners, further enhancing their financial security.