The Andhra Pradesh government has released the draft of the Andhra Pradesh Civil Services Pension Rules, 2026, marking a significant overhaul of pension regulations applicable to Old Pension Scheme (OPS) employees. These draft rules aim to modernise pension administration, remove outdated provisions, and align the system with digital governance while retaining core pension benefits.
Employee unions have been invited to submit their views and objections on the draft by February 20, 2026. The proposed rules replace the decades-old 1980 Pension Rules and introduce several structural and procedural changes.
Applicability of Pension Rules 2026
The new pension rules apply exclusively to government employees who entered service on or before August 31, 2004 and are covered under the Old Pension Scheme. Employees working on contract, outsourcing, or daily wage basis are explicitly excluded from these provisions.
Qualifying Service and Retirement Eligibility
To be eligible for a full pension, an employee must complete a minimum of 10 years of qualifying service. For voluntary retirement (VRS), at least 20 years of service is mandatory.
Employees retiring on superannuation are eligible for a service weightage of up to five additional years, subject to an overall cap of 33 years of qualifying service. This provision enhances pension benefits for long-serving employees.
Pension Calculation Formula
Under the draft rules, pension will be calculated at 50% of the Last Pay Drawn at the time of retirement. The maximum qualifying service considered is 33 years, calculated in 66 half-yearly units.
This marks a clear shift from earlier systems that relied on average emoluments, simplifying pension computation and improving transparency.
Gratuity Provisions
Retirement gratuity will be calculated as 25% of (Basic Pay + DA) multiplied by the total qualifying service in half-yearly units. The government will notify the maximum gratuity ceiling separately.
In the event of an employee’s death while in service, death gratuity will be paid to the family based on the length of service completed.
Commutation of Pension
Employees can commute up to 40% of their pension and receive a lump sum amount. If the application is submitted within one year of retirement, no medical examination is required.
The commuted portion of the pension will be restored after 15 years, ensuring long-term financial stability for retirees.
Family Pension Structure
The draft rules clearly define two types of family pension:
- Enhanced Family Pension (EFP): 50% of last pay, payable for 10 years from the date of death or until the employee would have attained 67 years of age, whichever is earlier.
- Normal Family Pension (NFP): 30% of last pay, payable after the EFP period.
Eligible beneficiaries include spouse (for life), children up to 25 years of age or until marriage/employment, and disabled children for their lifetime.
New Pension Types and Special Provisions
The draft introduces clarity on medical invalidation pension for employees unable to continue service due to health reasons, based on medical board recommendations.
In cases of compulsory retirement as a disciplinary measure, eligible employees may receive a minimum of two-thirds of the admissible pension.
Digital Processing and Administrative Reforms
Pension processing will be handled entirely through online platforms such as NIDHI, replacing manual paperwork. Service verification must begin two years before retirement to ensure timely pension sanction.
The government reserves the right to withhold or withdraw pension and gratuity in cases involving serious criminal offences or departmental misconduct.
Gazetted officers seeking private commercial employment within one to two years after retirement must obtain prior government approval.
Key Differences from 1980 Pension Rules
Several outdated provisions from the 1980 rules have been removed, including average emoluments-based pension, apprentice and contract service recognition, war service clauses, anticipatory pension, and compensation pension.
New features include a dedicated definitions section, legally mandated digital processing, five-year periodic rule reviews, and clear authority vested in the finance department for residual matters.
Need for Wider Consultation
While the draft rules streamline pension administration and enhance clarity, employee unions have demanded deeper discussions and inclusion of additional safeguards for serving employees and pensioners.
With feedback invited until February 20, 2026, the final shape of the Andhra Pradesh Civil Services Pension Rules, 2026 will depend on consultations between the government and stakeholders.
