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The state of Maharashtra has become the first in India to implement the Unified Pension Scheme (UPS) for its employees, a significant development following a recent announcement by the central government. This move comes amid anticipation that other states, particularly those governed by the National Democratic Alliance (NDA), will follow suit. The decision was made just 24 hours after the Union cabinet approved the UPS, which promises to offer 50% of an employee's average salary for the last 12 months as pension, along with inflation adjustments and other incentives to appease government employees who joined service in 2004 or later.
While the UPS is set to benefit an estimated 23 lakh central government employees, the number of beneficiaries could reach 90 lakh if all states adopt the scheme. Leading representatives of central government employees have urged states to implement the UPS without political interference, recognizing its potential to significantly impact the financial security of public sector workers. Although the traditional Old Pension Scheme (OPS) is still considered the preferred option by many, as it does not require employees to make contributions, the UPS has been met with a degree of satisfaction. Shiv Gopal Mishra of the All India Railwaymen’s Federation, highlighting the advantages of the scheme, remarked that it incorporates 90% of the provisions of the OPS and provides a lump sum amount at retirement based on employee contributions.
Mishra emphasized that in the current climate, the UPS is the most practical solution available. The significant involvement of state government employees and their associations in the campaign for fairer treatment of those recruited after January 2004 suggests a strong likelihood of their advocating for swift implementation of the UPS at the state level. The Centre's UPS template has been deemed replicable by states, and T V Somanathan, the cabinet secretary-designate who led the panel reviewing the National Pension System (NPS) and negotiated with staff organizations, believes that over 99% of employees covered under the NPS would benefit from switching to the UPS.
The Joint Consultative Machinery (JCM) chief, M Raghavaiah, expressed optimism that more states would follow suit. He also called on the Centre and the states to guarantee a pension of 50% of the salary for those who have served 20 years, instead of the current 25-year requirement. Additionally, he advocated for a lump sum payment at retirement equivalent to one-fourth of the monthly pay for the previous six months. The UPS is expected to be especially beneficial for over eight lakh railway employees who have joined service in the past two decades. The decision to implement the UPS has been met with a mixed response from political parties, highlighting the politicized nature of the issue. A senior representative of the central government employees' organizations, emphasizing the importance of prioritizing the welfare of public servants, urged political parties to avoid making it a 'they vs us' issue, as they serve the nation regardless of which party is in power.
Source: Maharashtra becomes 1st state to offer UPS to employees