Maharashtra Becomes First State to Adopt Unified Pension Scheme Following Central Government’s Approval

New Delhi, India: In a significant move aimed at securing the financial future of government employees, the Maharashtra government has become the first state to adopt the Unified Pension Scheme (UPS) just hours after central government employees’ organizations urged states to implement it. This decision comes a day after the Union cabinet approved the UPS, which offers 50% of an employee’s average salary from the last 12 months as a pension, benefiting 23 lakh central employees and potentially 90 lakh if fully adopted by all states.

The UPS has been designed to address the concerns of government employees who were recruited after January 2004 and are covered under the National Pension System (NPS). Unlike the Old Pension Scheme (OPS), which did not require employee contributions, the UPS incorporates 90% of the provisions of the OPS, making it a practical and widely accepted alternative.

Maharashtra’s decision to switch to the UPS is seen as a strategic move, especially as the state gears up for upcoming elections. With the adoption of UPS, Maharashtra aims to secure the support of its state employees while setting a precedent for other states, particularly those governed by the National Democratic Alliance (NDA), to follow suit.

The announcement was met with approval by central government employee organizations, who had long been advocating for a fair and secure pension scheme. “We should be practical to see what best we can get and what the government can provide. UPS incorporates 90% of the provisions of OPS, and so we are happy. The government is working on a lump sum amount that employees covered by UPS will get at the time of their retirement from their monthly contribution,” said Shiv Gopal Mishra, of the All India Railwaymen’s Federation and secretary (staff side) of the national council of JCM.

Cabinet secretary-designate T V Somanathan, who headed the panel to review the NPS and negotiated with staff organizations, emphasized that the UPS template could be replicated by states. He noted that over 99% of the employees covered under NPS would find it beneficial to shift to UPS.

The UPS is expected to benefit over eight lakh railway employees who have joined service in the past 20 years. As states across the country consider the switch to UPS, the decision is expected to bring stability and security to the pensions of government employees, offering them a more predictable and reliable financial future.