MUMBAI: With Lok Sabha polls approaching, the state government has decided to implement a revised version of the Centre’s New Pension Scheme (NPS) for state government employees who retired on or after November 2005. Under the revised scheme, then pension will be linked to 50% of the last drawn salary and will include Dearness Allowance benefits. Also, the market risk element of the NPS will be borne by the state government.
The revised NPS also says that family pension will be linked to 60% of the last drawn salary of the employee along with DA benefits. “The revised NPS will benefit lakhs of state government employees and their families. Our government has kept its word given to the employees,” said Shinde.
“There was concern about the market-linkage of NPS. But now the government has said that if the market rises and falls, the state will fill the gap,” said Shinde.
He said the government came to its decision after studying the report of the 3-member committee led by former finance secretary Subodh Kumar. The panel had ruled against a return to the Old Pension Scheme (OPS) as demanded by the state employee union. Instead, it had suggested linking the NPS to 50% of the last drawn salary of the retiring employee.
“Officials have discussed the revised NPS with the unions and taken their suggestions into account. Officer and employee unions are in agreeent,” said Shinde. Seventeen lakh state government employees struck work in March 2023, demanding a return to the OPS. The state had set up the 3-member committee to do a comparative review the OPS and NPS for the state.
The NPS was introduced by the Vilasrao Deshmukh government in 2005, in view of the state’s financial burden. The state has 13.5 lakh employees both in government and semi-government institutions. Those under the NPS account for 8.3 lakh employees. Dues under the OPS amount to 52,689 crores. The state’s share under the NPS is 7,686 crores. The expenditure on government salaries is 1.3 lakh crores.
Protests regarding the NPS across the country have led to several Opposition ruled states opting to return to the OPS. The main concern of employee unions was that since the NPS is linked to the market, their pension fund carries the risk of speculation. Also, the OPS does not deduct anything from the employee while the NPS has a 10% employee contribution.
In the winter session of the state legislature in December 2022, DCM Fadnavis said returning to the OPS was not an option because it would place a burden of Rs 1.1 lakh crore on the state. In February, the ruling parties lost a series of legislative council polls in the state. The Opposition made OPS an election issue.
The revised NPS also says that family pension will be linked to 60% of the last drawn salary of the employee along with DA benefits. “The revised NPS will benefit lakhs of state government employees and their families. Our government has kept its word given to the employees,” said Shinde.
“There was concern about the market-linkage of NPS. But now the government has said that if the market rises and falls, the state will fill the gap,” said Shinde.
He said the government came to its decision after studying the report of the 3-member committee led by former finance secretary Subodh Kumar. The panel had ruled against a return to the Old Pension Scheme (OPS) as demanded by the state employee union. Instead, it had suggested linking the NPS to 50% of the last drawn salary of the retiring employee.
“Officials have discussed the revised NPS with the unions and taken their suggestions into account. Officer and employee unions are in agreeent,” said Shinde. Seventeen lakh state government employees struck work in March 2023, demanding a return to the OPS. The state had set up the 3-member committee to do a comparative review the OPS and NPS for the state.
The NPS was introduced by the Vilasrao Deshmukh government in 2005, in view of the state’s financial burden. The state has 13.5 lakh employees both in government and semi-government institutions. Those under the NPS account for 8.3 lakh employees. Dues under the OPS amount to 52,689 crores. The state’s share under the NPS is 7,686 crores. The expenditure on government salaries is 1.3 lakh crores.
Protests regarding the NPS across the country have led to several Opposition ruled states opting to return to the OPS. The main concern of employee unions was that since the NPS is linked to the market, their pension fund carries the risk of speculation. Also, the OPS does not deduct anything from the employee while the NPS has a 10% employee contribution.
In the winter session of the state legislature in December 2022, DCM Fadnavis said returning to the OPS was not an option because it would place a burden of Rs 1.1 lakh crore on the state. In February, the ruling parties lost a series of legislative council polls in the state. The Opposition made OPS an election issue.
