Select state employees can opt for OPS in Maharashtra

The Maharashtra cabinet has approved a proposal to offer the Old Pension Scheme (OPS) to state government employees who joined after November 2005. The decision comes after employees went on strike twice last year to demand the restoration of OPS. Approximately 26,000 employees are expected to benefit from the move.

Mumbai: The Maharashtra cabinet on Thursday cleared a proposal that offers an option of availing the Old Pension Scheme (OPS) to the state government employees who joined the service after November 2005.

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The decision comes after the employees went on strike twice last year to press their demand to restore the OPS. The move would be able to bring benefits to approximately 26,000 employees.

“The state cabinet has approved a principle according to which the employees will get an option for OPS if they have joined the services post November 2005, but for the posts advertised before November 2005. This is in line with the order of the Supreme Court and the changes made by the central government,” said Nitin Kareer, chief secretary.

Under the OPS, a government employee gets a monthly pension equivalent to 50% of their last drawn salary. There was no need for contribution by employees. In November 2005, the state government decided to discontinue the OPS on account of its precarious financial situation with a fiscal debt of around ₹1.10 lakh crore.

This option will be available for a limited period of six months after which the employees will not be able to opt for it, states a statement issued by the chief ministers’ office (CMO).

They will have to approach the designated authority for the same. If approved, they will be migrated to the OPS from the current National Pension Scheme (NPS). The employees’ contribution to the NPS will be credited to the General Provident Fund (GPF) of the individual, it states further.

“The decision will benefit around 26,000 state government employees who were selected before November 2005 but received joining letters later,” Vishwas Katkar, general secretary of the Maharashtra State Employees’ Confederation, said.

There are as many as 9.5 lakh state employees who joined the service before November 2005 and are enjoying the benefits of the OPS, he added.

Over 1.6 million state employees have been demanding the reintroduction of the Old Pension Scheme (OPS) for which they had gone on strike twice last year. The state government had formed a committee headed by retired IAS officer Subodh Kumar on the feasibility of the revival of OPS which has also submitted its report. In December 2023 chief minister Eknath Shinde promised to take a call on the old pension scheme (OPS) in the budget session to be held in February-March.

Of the over 1.6 million government employees, half have joined service after 2005 and thus get benefits under the New Pension Scheme (NPS), which is not as lucrative as OPS. Under NPS, a state government employee contributes 10% of their basic salary plus dearness allowance with the state making a matching contribution. The money is then invested in one of the several pension funds approved by the Pension Fund Regulatory and Development Authority (PFRDA) and the returns are market-linked.