Andhra Pradesh Cabinet Restores Old Pension Scheme for 10,715 Long-Serving Employees

The state cabinet has cleared a years-old demand from employee unions, shifting more than ten thousand workers back to the Old Pension Scheme and raising the retirement age for staff at public-sector bodies.

By Newsroom

2 min read Published 24 June 2026 at 06:12 pm IST

Andhra Pradesh's cabinet has approved restoring the Old Pension Scheme (OPS) for 10,715 state government employees who were appointed on notifications issued before September 2004, ending a long-running grievance from staff who had been moved to a contributory pension model.

The distinction matters financially. Under OPS, retirees receive a guaranteed monthly pension calculated as a share of their last drawn salary, funded entirely by the government, rather than depending on market-linked contributions split between the employee and the state. Officials estimate the switch will give each eligible employee a financial benefit of roughly ₹3.39 crore over their retirement, with the cumulative cost to the state running to about ₹34,850.83 crore between 2026 and 2067 — a sizeable, multi-decade liability for a government that has itself acknowledged it is operating under fiscal strain.

Alongside the pension decision, the cabinet also approved raising the retirement age from 60 to 62 for regular employees at public sector undertakings, corporations, societies, and Schedule 9 and 10 institutions, with the change applied retroactively from January 2022. Employees from these organisations who had already retired in the intervening period are to be brought back into service, a move officials say will benefit more than 15,000 people in total once both decisions are accounted for.

The pension file itself has a longer political backstory: the previous YSRCP government had rejected the same proposal twice before Chief Minister N. Chandrababu Naidu signed off on it roughly two weeks ago, according to employee union accounts. Leaders of the state's employee associations met the chief minister afterward to thank him, with APNGO state president Vidyasagar calling it the fulfilment of a pension dream that around 11,000 employees had waited years for.

The same cabinet meeting also cleared a separate set of investment-related proposals spanning industries, IT, tourism, capital-region development, data centres and renewable energy, with officials projecting roughly ₹34,000 crore in investment commitments and 35,000 jobs from those approvals — underscoring that the pension decision arrived as part of a broader, employee- and investment-focused cabinet agenda rather than as an isolated announcement.