Maharashtra becomes first state to offer Unified Pension Scheme; check details

Maharashtra became the first state to offer Unified Pension Scheme (UPS) for state government employees, which was announced by the central government on 24 August.

It is speculated that states governed by the National Democratic Alliance (NDA) will also offer the scheme soon after the Union Cabinet approval.

The UPS will be effective from April 1, 2025.

On August 25, the Union cabinet approved UPS, which seeks to offer 50% of an employee's average salary for the last 12 months as a pension. The pension also offers inflation adjustment and other benefits for government employees who joined the service in 2004 and later. Employees who have a minimum service period of 25 years will be eligible for UPS.

Union Minister Ashwini Vaishnaw launched the scheme and stated that the Centre had constituted a committee to finalise the details of the UPS. The committee held 100 meetings with several banks, including the Reserve Bank of India and the World Bank.

For employees whose service period is less than 25 years, the pension will be proportionate to their tenure, with the minimum qualifying service period set at 10 years, according to a Press Information Bureau release dated August 24. Additionally, if an employee passes away, his or her spouse will receive a family pension, assured at 60% of the pension that the employee was drawing before his or her death. The UPS also guarantees a minimum pension of ₹10,000 per month after a minimum of 10 years of service, providing a safety net for lower-income employees.

Almost 23 lakh central government employees are likely to benefit from the Unified Pension Scheme (UPS). If all states implement the scheme, this number will likely jump to 90 lakh.