Y. S. Jagan Mohan Reddy, Andhra Pradesh CM





In place of the current Contributory Pension Scheme (CPS), the Andhra Pradesh authorities is making ready to implement a Guaranteed Pension Scheme (GPS) for state authorities workers.












The reintroduction of the Old Pension Scheme (OPS), which was phased down after 2004, would, nonetheless, place a major monetary pressure on the state exchequer and future generations, in line with Buggana Rajendranath, Minister of Finance, Planning, Legislative Affairs, and Commercial Taxes.

The state’s authorities workers have been calling for the OPS to be reinstated in favour of the present CPS, which has no assured pension and is linked to financial institution rates of interest. As financial institution rates of interest fall, the present CPS, which is already “meagre,” is predicted to fall a lot decrease, in line with workers.

“In such a scenario, our government plans to introduce a Guaranteed Pension Scheme to protect the interests of future generations and the State,” the minister acknowledged.

In the proposed GPS, the worker is promised a pension of 33% of the final drawn fundamental pay, with no discount. It would additionally permit an worker to estimate the quantity of their pension upfront, with out having to fret about rate of interest modifications or different monetary market components.












“Market circumstances will have no impact on the pension under GPS, which is over 70% higher than the current pension granted under CPS, based on current interest rates,” Rajendranath acknowledged.

Choices

The authorities has introduced the employees with two selections to think about. If an worker pays 10% of his wage each month, the State authorities will add one other 10%, and the worker will get 33% of his final drawn fundamental pay as a assured pension each month after retirement beneath the primary alternative.

If an worker contributes 14% of his revenue, the federal government will add one other 14%, and the worker will get 40% of his final obtained fundamental pay as a pension beneath the second choice.

Impact

According to authorities projections, if present CPS workers are awarded OPS advantages, dedicated expenditure as a share of State-owned sources on salaries, pensions, and required expenditure will enhance by 181 p.c by 2040.












It needs to be emphasised that authorities workers accross states have been clamouring for a return to the outdated pension scheme. The Rajasthan authorities lately introduced the reintroduction of OPS.











First printed on: 30 Apr 2022, 02:33 IST



Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here