In response to the state government employees’ demand for the old pension scheme or OPS to be reinstated, the Maharashtra government has announced a revised National Pension Scheme (NPS).
As per the revised scheme, the employees who joined post 1 November 2005 can opt to receive 50 per cent of their last-drawn salary and dearness allowance (DA) as pension. Additionally, they can get a family pension of 60 per cent of their pension and DA. This is optional for those already covered under the NPS.
Employees have to decide whether they wish to continue with the old NPs or the revised one and convey their decision within the next six months. This is a one-time option.
The NPS was implemented in Maharashtra in April 2015.
The Maharashtra government had issued an order in early February 2024 regarding the old pension scheme (OPS) for 26,000 state government staff members who joined before November 2005.
At present, over eight lakh employees of the more than 13 lakh government employees in the state are covered under the NPS. The state government’s expenditure on OPS is about Rs 52,000 crore a year. The expenditure under NPS, on the other hand, is only about Rs 7,000 crore. The total spend on salaries is about Rs 1.27 lakh annually.
Considering what a huge pressure on finances the OPS created, it was brought to the notice of the government that reinstatement of OPS would not be a good idea. Instead, it was suggested that the current scheme should be tweaked so that retired government employees enjoy benefits at par with the OPS. The suggestion was made by a special committee constituted for this very purpose.
Earlier, retired government employees were eligible for 50 per cent of their last drawn salaries as pension. When the NPS came to replace the OPS, they received 60 per cent lump sum post retirement and also 40 per cent which was invested in annuities as pension. While government employees were not required to make any contribution towards the pension scheme under the OPS, the NPS requires them to contribute 10 per cent of their salary (that is, a sum of their basic salary and DA), while the government makes a 14per cent contribution.
