The Andhra Pradesh cabinet has approved a decision allowing 10,715 state government employees, who were recruited after the state switched to the Contributory Pension Scheme (CPS), to opt instead for the Old Pension Scheme (OPS).
The move addresses a grievance that employee associations have pressed for years: those hired after September 1, 2004, when undivided Andhra Pradesh adopted the CPS in line with central government policy, have had their retirement savings tied to market-linked contributions rather than the assured, last-drawn-salary-linked payouts of the OPS. Employee unions have long argued that the CPS model exposes retirees to market risk and yields lower guaranteed income than the older defined-benefit structure.
Under the cabinet's decision, the eligible employees will now have the option to shift to OPS, bringing them into the same pension framework as colleagues recruited before the 2004 cutoff. The state government has not yet detailed the fiscal mechanics of the transition, including how existing CPS contributions and matching government contributions for these employees will be adjusted or transferred as part of the switch.
The decision follows years of representations from state government employee unions, who have periodically organized protests and submitted memoranda to successive AP governments demanding the restoration of OPS benefits for CPS-era recruits. Several other states, including Rajasthan, Chhattisgarh, Jharkhand, Himachal Pradesh and Punjab, have at various points announced similar reversions to the Old Pension Scheme for state employees, even as the Centre has continued to push central government staff toward newer pension models such as the Unified Pension Scheme.
State finance officials are expected to work out implementation guidelines in the coming weeks, including the timeline for employees to exercise the option and how it will affect the state's pension liabilities going forward.
