The Maharashtra cabinet on Sunday has decided to implement the Unified Pension Scheme (UPS) for state government employees, making it the first state to adopt the scheme announced by the Union government the previous day.
According to the cabinet’s decision, the UPS will take effect from March this year and will benefit all state government employees, an official stated.
On Saturday, the Narendra Modi-led Centre approved the Unified Pension Scheme (UPS) for central government employees who joined service after January 1, 2004.
What is the Unified Pension Scheme?
Employees under the National Pension Scheme (NPS) who opt for UPS will be eligible for an assured pension of 50 per cent of their average basic pay over the last 12 months before retirement. The minimum qualifying service required is 25 years.
The UPS, set to commence from April 1, 2025, will increase the government’s contribution from the current 14 per cent to 18.5 per cent, resulting in an estimated additional annual cost of Rs 6,250 crore, Union Minister Ashwini Vaishnaw said on Saturday after the Cabinet meeting.
Vaishnaw also highlighted that this adjustment marks a significant shift from the NPS, which previously offered pensions based solely on contributions by employees and the government.
Despite the increase in the government’s contribution under the UPS, the employees’ contribution remains unchanged at 10 per cent of their basic salary. Additionally, there will be an arrear of Rs 800 crore owed under the NPS to employees retiring before March 31, 2025. Those retirees who opt for UPS will receive these arrears.
This announcement comes amid several non-BJP states considering a return to the DA-linked Old Pension Scheme (OPS) and demands from employee organisations in other states for similar reforms.
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