Bonanza for govt employees: Maharashtra Cabinet approves new Unified Pension Scheme

The Maharashtra Cabinet has approved the Unified Pension Scheme (UPS) which was passed by the Union Cabinet on Saturday. The move comes on the day Prime Minister Narendra Modi visited the state and interacted with 'Lakhpati Didis' – women members of self-help groups who are earning Rs 1 lakh annually.

On Saturday, the Union Cabinet cleared an assured pension of 50% of salary for those who joined the service after January 1, 2004. This was a long-pending demand of government employees. The Centre's new pension scheme comes ahead of assembly elections in Haryana, Jharkhand, J&K, and Maharashtra.  

Under the UPS, employees would be eligible for an assured pension of 50% of the average basic pay drawn over the last 12 months before the superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for a lesser service period up to a minimum of 10 years of service, Union Minister Ashwini Vaishnaw said. 

The new pension scheme also guarantees an assured minimum pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service. This option scheme will benefit 23 lakh central government employees, the minister said, adding that the number would rise to 90 lakh if state governments want to join the scheme. 

Vaishnaw said an assured family pension will be provided to the spouse of a deceased employee and there would be inflation indexation on assured pension, assured family pension, and assured minimum pension. There will be Dearness Relief based on the All India Consumer Price Index for Industrial Workers (AICPI-IW) as in the case of serving employees, the minister said. 

Under the new scheme, employees at the time of retirement would be eligible for a lump sum amount -- 1/10th of monthly emolument (pay + DA) as on the date of superannuation for every completed six months of service. 

The NPS has been implemented for all government employees except those in the armed forces joining the central government on or after January 1, 2004. Most state/Union Territory governments have also notified NPS of their new employees. Under the Old Pension Scheme (OPS), retired government employees received 50 per cent of their last drawn salary as monthly pensions. 

Cabinet Secretary-designate TV Somanathan said the new scheme will be applicable from April 1, 2025. The benefits of the UPS will apply to those who are retired or retiring under the NPS till March 31, 2025. They will be eligible for arrears, he said. There would not be an additional burden on employees opting for UPS. 

The employee's contribution would remain 10 per cent, while the government contribution would go from 14 per cent to 18.5 per cent. Expenditure for arrears would be Rs 800 crore approximately, and Rs 6,250 crore additional burden on the government for the enhanced contribution of 18 per cent, Somanathan added. If the state government joins UPS, they would bear the additional burden for those employees for the assured pension.

(With inputs from PTI)