Maharashtra Becomes First State to Adopt Unified Pension Scheme: Who Will Benefit From This Decision?

The poll-bound state of Maharashtra became the first to offer a switch to its employees on Sunday, hours after unions representing central government employees demanded that state governments implement the Unified Pension Scheme (UPS). It is anticipated that other states, particularly those under the NDA, will follow suit.

The decision was made 24 hours after the Union cabinet had given UPS permission to provide a pension that would be equal to 50% of an employee's average income for the previous 12 months, plus an inflation adjustment and other goodies, in order to satisfy the requests of government employees hired in 2004 and later.

Maharashtra: First State to Implement UPS

The administration led by Eknath Shinde made the announcement one day after the Center announced the UPS for workers hired after January 1, 2004.

According to an official, the Maharashtra cabinet determined that all state government employees would benefit from the UPS, which would go into effect in March.

Additionally, this decision came just before the announcement of the dates of state Assembly elections. It is expected that the elections will probably be scheduled at the end of the year.

What is UPS?

The Unified Pension Scheme (UPS) is a new initiative taken by the Central Government aimed at providing a stable pension to government employees based on their years of service and last drawn salary. Under this scheme, for every six months of service, 10% of the salary and dearness allowance (DA) will be paid as a lump sum at the time of retirement.

Union Minister of Information and Broadcasting, Ashwini Vaishnaw, announced that the "five pillars" of the UPS will be implemented starting April next year. He also mentioned that employees with at least 10 years of service will receive a minimum pension of Rs 10,000. Additionally, the family pension for the spouse of a deceased government employee will be 60% of the employee's pension.

"For those with 30 years of service, a lump sum payment equivalent to roughly six months' salary will be provided upon retirement," the minister explained, noting that this amount is separate from the gratuity.

Who will Benefit from UPS?

The Unified Pension Scheme (UPS) is expected to benefit 23 lakh central government employees; but, if all states implement it, that figure might increase to 90 lakh. Top central government leaders urged states to carry out the program. They further requested that political parties shouldn't politicize the matter. 

Unified Pension scheme is considered to be better than National Pension System introduced during Atal Bihari Vajpayee government. This scheme will benefit all the central government employees and the employees of the state government who have decided to adopt this scheme as their pension scheme. Maharashtra is the first state to do so. It is expected that it will be followed by other state governments soon.

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