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Andhra's GPS Pension System: Balancing Welfare&Fiscal Health



  Oct 04, 2023

Andhra Pradesh Guaranteed Pension System



What is the Andhra Pension System?

The Andhra Pradesh Guaranteed Pension System (GPS) is a hybrid model combining features of both the Old Pension Scheme (OPS) and the New Pension Scheme (NPS) introduced in 2004.

How is it different from the previous systems?

Unlike the exclusive models of OPS or NPS, GPS blends elements of both. It guarantees government employees a monthly pension amounting to 50% of their last-drawn salary, inclusive of dearness allowance relief.

When was it introduced?

The Andhra Pradesh Guaranteed Pension System Bill was passed by the state assembly on 27th September 2023.

Why was this system implemented?

The introduction of GPS aimed to address the discontent towards the NPS, which many believed to be less beneficial than the OPS.
However, reverting completely to OPS was deemed financially unviable for the state, as it would have escalated the state’s fiscal deficit to a projected 8% by 2050.

What is the broader significance of this move?

The adoption of GPS signifies the state’s effort to balance fiscal prudence with the welfare of its employees,
offering them a secured pension while keeping the state’s financial health in check.


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