AP GPS AP Employees Guaranteed Pension Scheme Complete Details

AP Guaranteed Pension Scheme Proposals by Govt of AP in place of Contributory Pension Scheme PPT Download . AP GPS Proposals PPT Download Guaranteed Pension Scheme PPT Download. A.P. Guaranteed Pension Scheme (AP GPS)- Reg. Ref:- From the Finance Dept. Note No.11/Peshi/RM&FP/2022, dt. 25.04.2022. AP GPS AP Employees Guaranteed Pension Scheme. Govt has released the AP Guaranteed Pension Scheme details by way of slides to all the Union Leaders. The AP GPS Scheme overview, brief details are explained below. 

AP GPS AP Employees Guaranteed Pension Scheme Complete Details

AAP GPS AP Employees Guaranteed Pension Scheme

AP GPS - AP Guaranteed Pension Scheme
As per the Government press note, AP GPS is a pension scheme which guarantees income while also providing health and life insurance and family security.
 
The Five Pillars of the AP GPS Scheme are as follows:
  • 1. Guaranteed Pension
  • 2. EHS
  • 3. Family Pension
  • 4. Minimum Pension
  • 5. Life Insurance

AP GPS Guaranteed Pension - Calculation Procedure

Govt of AP has released a document that there will be Assured Pension in AP GPS Scheme. The AP GPS Employee will receive 33% of Last Basic Pay as pension.
ఉద్యోగి చివరి బేసిక్ పే లో 33% గ్యారంటీ పెన్షన్.. కానీ PRC, DA లు వచ్చినపుడు పెరుగుదల ఉండదు

Example Calculation of APGPS Pension:
An employee drawing a Basic Pay of Rs 50000 is retired then 
  • as per the OPS Scheme, The employee will be get 50% as Basic Pension, means Rs 25000 Basic Pension, and Dearness Relief will be Added to the Basic Pension. In every PRC, the Basic pension will be raised as per the PRC norms
  • In proposed AP GPS Scheme, the employee will get only 33% of Rs 50000, means Rs 16500 and there will not be any DR, any PRC .. Only Rs 16500 fixed amount will be given. 

EHS Employee Health Scheme in AP GPS Scheme

Under Health Security Benefit, all AP GPS Employees will be covered under EHS Employee Health Scheme Health Insurance Coverage. To cover exorbitant health costs, post-retirement health insurance benefits for retired CPS Employees with the same terms as OPS

Family Pension in AP Guaranteed Pension Scheme

To ensure family security, the spouse to receive 60% of the guaranteed pension after the employee's death, the same proportion as OPS. This is called Guaranteed spouse Pension. Note that the 60% of the guaranteed pension will be based on the proposed employees APGPS Pension.
  • Pre-retirement death: Same as OPS
  • Post-retirement death: Spouse pension which is 60% of the guaranteed pension.

Minimum Pension in AP GPS Scheme

This is for the AP GPS Employees whose service is less than 10 years will be given the Minimum Pension. To protect employees with less service Rs 10000 as minimum pension for employees with at least 10 years of service, thereby matching OPS.
  • రిటైర్ ఉద్యోగి చనిపోతే 66% ఫ్యామిలీ పెన్షన్... 66% అంటే ఉద్యోగికి రిటైర్ అయిన తర్వాత వస్తున్న పెన్షన్ లో..
  • ఉదాహరణ... ఉద్యోగి చివరి బేసిక్ పే 30000 అనుకుంటే అతనికి అందులో 33% పెన్షన్ రూ..10000 అవుతుంది... ఈ రూ..10000 పెన్షన్ తీసుకుంటున్న రిటైర్ cps ఉద్యోగి మరణిస్తే ఆ ఫ్యామిలీ కి రూ.. 10000 పెన్షన్ లో 66% అంటే రూ..6600 ఫ్యామిలి పెన్షన్ వస్తుంది.. ఇది కూడా prc, da వచ్చినపుడు పెరగదు...

Life Insurance in APGPS Scheme

The Life insurance under APGPS Scheme to the employees are as follows (Accidental Death or Disability cover):
  • Family Security - Cover upto Rs 50 Lakhs
  • Rs 50 Lakh cover for monthly basic pay less than Rs 25000
  • Rs 40 Lakh cover for monthly basic pay Rs 25000 - Rs 50000
  • Rs 30 Lakh cover for monthly basic pay Rs 50000 - Rs 75000
  • Rs 20 Lakh cover for monthly basic pay above Rs 75000

AP GPS Scheme Previous Meetings Details explained below

Letter No GAD01-SWOSERA/10/2022-SW-1, Dated:26.04.2022 
Sub:- G.A. (SW) Dept.- Meeting on CPS held at 4.00 PM on 25.04.2022 in the conference Hall, Finance Department- Communication of PPT relating to proposal on A.P. Guaranteed Pension Scheme (AP GPS)- Reg. Ref:- From the Finance Dept. Note No.11/Peshi/RM&FP/2022, dt. 25.04.2022.
  • A Consultative meeting was held on Contributory Pension Scheme (CPS) at 4.00 PM on 25.04.2022 in the conference Hall, Finance Department. 
  • 2. In the said meeting, a PPT was presented on the proposal for A.P. Guaranteed Pension Scheme (AP GPS). Accordingly, a copy of PPT on the proposal for A.P. Guaranteed Pension Scheme (AP GPS) is communicated herewith to the member associations of Joint Staff Council (JSC) mentioned in the address entry for study and furnishing views.
Note No. 11/Peshi/RM&FP/2022 Date: 25/04/2022

Note on the AP GPS (25.04.2022)

The government recognises that the employees have a justifiable concern with CPS. Therefore, the idea is to present a fiscally sustainable proposal for pension reforms that address this concern. The result is the Andhra Pradesh Guaranteed Pension Scheme (AP GPS).

The analysis done to arrive at the AP GPS proposal is based on a rigorous statistical model of pension pay-out and corpus returns which used actuarial calculations based on existing CPS employees profile. Many leading experts on pension reform from across the country have been consulted in arriving at the AP GPS proposal.

Before we examine the reform proposal, it's important to keep in mind the state's current employee numbers and expenditures on salaries and pensions. Already the expenditure on salaries and pensions form a disproportionately high share of state own revenues. Further, the dependency ratio, the number of working employees per pensioner, is an already unsustainable number at 1.55.
It's also important to understand the challenges associated with any such reform. For a start, for several years now it has become a consensus globally that OPS-like defined benefit schemes are fundamentally unsustainable. In recognition of this reality, NPS-like defined contribution schemes have become the global norm. All private sector and most public sector pension plans globally for new employees are of the defined contribution type. Accordingly, in India too almost all states have moved to CPS.

There are two problems with any pension reform effort -www.apteachers.in- demographics and low interest rates.
The most important reason for a shift to OPS becoming unsustainable is demographics. As people live longer, the share of pensioners, by both numbers and expenditure, in the total personnel expenditure of the government rises sharply. This imposes a prohibitive burden on governments in any pay as you go pension system (like OPS).

This problem on the expenditure side is compounded on the revenues side. The downward trend in interest rates has been a global phenomenon for the last fifty years and more. As interest rates trend downwards, the growth rates of GDP and state revenues too decline. This also makes even a contributory defined benefit pension scheme difficult to sustain since it lowers the returns on any contributory corpus.

This analysis, which draws from research by reputed experts and empirical evidence of trends, show that an effective interest rate of 4% would be a realistic assumption for the long period from 2022 to 2100.In the circumstances, a restoration of OPS to the existing CPS employees is not sustainable. In fact, the numbers in the model reveal that restoration of OPS in any form is completely unsustainable.

If CPS is inadequate and OPS is not possible, what's the alternative?
It's in this context that the proposal for the Andhra Pradesh Guaranteed Pension Scheme (AP GPS) is put forward.

It seeks to replace the uncertainty of not knowing what one would receive as pension from a fully market-linked CPS with a AP GPS where the pension is known during the employee's service period, is guaranteed, and is fully funded from contributions. The AP GPS would offer a guaranteed fixed pension at 33% of basic pay drawn at the time of retirement, compared to the current fluctuating CPS of 20%, thereby leading to an atleast 63% increase in the pension annuity.

While the AP GPS too will seriously strain the budget, given the genuine concerns of the employees about the CPS, it is the best that can be offered without seriously damaging the economic prospects of the future generations of the state's population.

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