Media may support NPS now! But NPS is a dead issue!

 

AP State’s Guaranteed Pension Scheme

A Critical Look

K.Ragavendran

SG NCCPA

 

Andhra State Government had announced and followed it up with enactment of AP GPS Act 2023. The enactment as well as the earlier announcement have been given much hype by the Media and even suggestion was there that the Union Government may catch up with the thread and enact a similar GPS Act. No reference to ending the notorious NPS against which continuous demonstrations are going on in Delhi and throughout the nation and no support is forthcoming from any Media for bringing back the OPS. This article is an attempt to analyze the Andhra State Government’s GPS Act, 2003 and contrasting it with the CCS (Pension) Rules, 2021. The provisions of the Act were taken from the Andhra Teachers website.

 

AP GPS Bill adopted

 

Andhra State Government has adopted the AP GPS 2003 Bill on 27.09.2023 for the employees of Andhra. It was made clear that the subscriptions to the AP GPS Scheme shall not affect in any way the monthly contributions made to NPS Scheme by the employees and the employer. Therefore, our readers must be clear that the AP GPS Act in not to replace the notorious NPS but only as a additional scheme to NPS. The NPS Scheme in Andhra is called the CPS (Contributory Pension Scheme) that was implemented from 1.9.2004 in that state. This also means that the CPS will continue to operate in the State and the present AP GPS will superimpose itself on the existing NPS.

 

AP GPS will cover only NPS

 

The Andhra State GPS Act makes it very clear that the present scheme will cover those employees who were already covered by the CPS (Contributory Pension Scheme). More over it is also made clear that those CPS employees recruited on or after 1.9.2004 and those who opt to contribute or subscribe to AP GPS System are eligible to join the scheme. It is also mentioned that the existing NPS or CPS Pensioner should exercise option to subscriber AP GPS Scheme.

 

Annuity and Top-up Annuity

 

The APGPS System says that the retiring employees have to purchase annuity plan duly utilizing the “Accumulated Pension Corpus”. What is this ‘Accumulated Pension Corpus’? It is nothing but the amount in Pension Account under CPS (NPS)! The Guaranteed Pension assured by the scheme will consist of both the Annuity Component and if necessary the top-up Component. The Annuity Component is the monthly returns based on the investments made by utilizing the ‘Accumulated Pension Corpus' under CPS and will be added if necessary by the ‘Top-up Component’ by the State Government. But any part withdrawal or final withdrawal by a AP GPS Subscriber from the final accumulated corpus of CPS  shall result in proportional reduction in the Guaranteed Pension quantum. In addition it is made clear that the State Government can withhold or withdraw the top-up component or a part of top-up component also.

 

Benefits

 

50% of Last drawn basic pay at the time of retirement will be given as GPS Pension by a top-up amount by Andhra State Government in case of any short fall in the annuity received by the AP GPS Subscriber.

 

60% of the Pension will be given to the Spouse as Family Pension in the even of death of AP
GPS Pensioner under the same above conditions.

 

Dearness Relief will be paid over and above the basic pension.

 

Minimum Pension of 10,000/- is announced under the scheme by a top-up of annuity.

 

Health care scheme also will be provided under the scheme.

 

Eligibility

 

The AP GPS scheme is eligible to superannuating Pensioners with a minimum qualifying service of 10 years. The period is 20 years of qualifying service for VRS Pensioners. Any servant retired on public interest on any disciplinary action must have put in 33 years of qualifying service. Those who retire on medical invalidation should have a minimum of 10 years qualifying service.

The employees who resign or sent out by dismissal or removal or under compulsory retirement under Disciplinary Action are not eligible for drawing Guaranteed Pension.

 

Important minus points

 

1.     The Scheme is also a contributory scheme of Pension that we are stoutly opposing and more over the fact of the present scheme is that the existing NPS scheme shall also continue and only those who are in the existing NPS scheme can exercise option to join the AP GPS Scheme. This is unlike the State Governments of Rajasthan, Chhattisgarh, Jharkhand, Himachal etc., which have declared reversion of NPS to OPS.

2.     The Guaranteed Pension quantum is in addition to the NPS quantum through the Annuity earned by investments of the sum left with Service Providers. The subscription quantum (though not prescribed) will increase by way of subscriptions to the new AP GPS Scheme also in addition to the existing NPS. Thus, the employees are not rescued from the wage cut but continued and more percentage of wage cut is imposed.

3.     Under the CCS Pension Rules 2021, the ompulsorily retired are getting the pension as per their LPD (according to percentage cut imposed by the Disciplinary Authority) but the AP GPS scheme stipulates that the compulsorily retired under Disciplinary Action are not at all eligible for the Guaranteed Pension.

4.     The CG Pensioners under CCS Pension Rules 2021 have provisions for grant of Provisional Pension etc if the disciplinary case against the employees continue after retirement. But the AP GPS Scheme states clearly that the retirees against whom any Disciplinary or Judicial Proceedings are pending at the time of retirement, will not be given any Guaranteed Pension until such proceedings are completed.

5.     The CCS Pension Rules 2021 Pensioners will get their pension periodically updated whenever any Pay Commissions are in place along with the CG Employees. There is no mention of periodic updation to AP GPS Pensioners.

 

Conclusion:

 

Andhra State Government instead of playing with jargons should come out openly and implement its poll promise of ending NPS in the State. The boldness with which the States like Rajasthan, Chhattisgarh, Jharkhand, Himachal, Punjab and Delhi adopted a line to end the NPS and embrace OPS should be followed by Andhra also. The West Bengal State right from beginning followed the foot steps of the earlier LF Government. The State Government of Karnataka has made a poll promise to end NPS. The Media reports show that the Union Government is trying only a face lift to the existing NPS on the lines of Andhra State. But the NPS is a dead issue in the present context and becoming an election based political issue in India. We shall not rest until the NPS and all forms of it are ended squarely and CCS Pension Rules 2021 is extended to all Central, State Government Employees including the Teachers and also to all Central and State Public Sector Workers. Is it not time to declare that we support only those political parties which openly support ending the NPS if voted to power at Centre!?