Mumbai, May 6: The Maharashtra government has made its revised National Pension Scheme (NPS) optional for employees currently covered under the existing NPS, according to a fresh circular issued by the state finance department on Wednesday.
The move provides flexibility to government staff, allowing them to choose whether to remain under the existing framework or opt for the revised pension structure.
Employees given option to choose revised pension scheme
The circular outlines a detailed procedure for implementing the revised scheme, making it clear that only those employees who formally opt in within the prescribed deadline will be covered. Eligible employees have been given time until December 31, 2026, to exercise their choice.
The revised scheme, approved earlier by the state cabinet and modelled on the Centre’s Unified Pension Scheme (UPS), introduces a more assured pension component.
Employees retiring after completing 20 years or more of service will be entitled to a pension equal to 50 per cent of their last drawn salary, along with applicable dearness allowance. Those with 10 to 20 years of service will receive a proportionate pension based on their tenure.
Minimum pension and family benefits detailed
The government has also fixed a minimum monthly pension of Rs 7,500 for employees completing at least 10 years of service under the revised scheme. However, employees with less than 10 years of service will not qualify for pension benefits.
In addition, the scheme provides for a family pension at 60 per cent of the admissible pension, along with dearness relief. Employees opting for the revised scheme will be required to deposit 60 per cent of their accumulated NPS corpus with the government at the time of retirement, while the remaining 40 per cent will be used to purchase an annuity. The annuity amount will then be adjusted against the pension payable by the state.
Rules on withdrawals and resignation clarified
The circular also states that any prior withdrawals from the NPS corpus must be refunded with 10 per cent interest for employees choosing the revised scheme. Failure to do so will lead to a reduction in pension benefits.
Importantly, employees who resign from service will not be eligible for pension under the revised scheme and will continue under the existing NPS structure. The government has further clarified that retirement gratuity benefits will apply to those opting for the revised scheme, as per earlier orders.
Scheme extended to aided institutions and local bodies
The provisions of the revised scheme will also extend, with necessary modifications, to employees of aided educational institutions, agricultural universities, affiliated non-government colleges, as well as staff of zilla parishads and panchayat samitis. A separate detailed procedure for pension disbursement under the revised scheme is expected to be issued soon.
Key differences: Existing NPS vs revised scheme
Nature of Scheme
Existing NPS: Market-linked, contribution-based
Revised Scheme: Assured pension component introduced
Pension Guarantee
Existing NPS: No fixed pension amount
Revised Scheme: 50% of last drawn salary (after 20 years service)
Minimum Pension
Existing NPS: No minimum guarantee
Revised Scheme: Rs 7,500 per month (after 10 years service)
Family Pension
Existing NPS: Depends on annuity plan
Revised Scheme: 60% of pension + dearness relief
Corpus Usage
Existing NPS: Entire corpus managed via annuity/withdrawals
Revised Scheme: 60% deposited with government, 40% used for annuity
Eligibility Flexibility
Earlier Policy: No option of assured pension model
New Policy: Employees can choose between existing NPS and revised scheme
Gratuity Benefit
Existing NPS: Limited provisions
Revised Scheme: Retirement gratuity applicable
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Condition on Withdrawals
Existing NPS: No refund requirement
Revised Scheme: Past withdrawals must be refunded with 10% interest
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