Old Pension Scheme Maharashtra Game Changing Decision: Shocking Benefits Unveiled for State Employees

Old Pension Scheme Maharashtra :The Maharashtra government made a decision to give an option of the Old Pension Scheme (OPS) to state employees who began their jobs after November 2005.

This Old Pension Scheme Maharashtra choice came after strikes by government employees requesting the return of OPS, as reported by PTI news agency.

Around 26,000 state government employees, chosen before November 2005 but receiving their joining letters later, will benefit from this approval. Vishwas Katkar, Maharashtra State Employees’ Confederation’s general secretary, mentioned that it’s a one-time choice for these employees.

Under OPS, government employees receive a pension equal to 50% of their last salary without needing to contribute. This scheme stopped in 2005, and now the cabinet has given these employees six months to choose between OPS and the New Pension Scheme (NPS) and submit relevant documents within two months.

NPS requires employees to contribute 10% of their salary plus dearness allowance, matched by the state. The funds are then invested in pension funds approved by the Pension Fund Regulatory and Development Authority (PFRDA), providing market-linked returns.

The cabinet also approved a toll of Rs 250 for cars using the Mumbai Trans Harbour Link (MTHL), which connects Sewri in Mumbai to Nhava Sheva in Raigad district. This bridge will significantly reduce travel time from two hours to 15-20 minutes and will be inaugurated by Prime Minister Narendra Modi on January 12.

Another approval was a Rs 5 per litre subsidy for milk producers in the state. Cooperative and private milk dairies must first deposit money into producers’ bank accounts before the state transfers its contribution.

Additionally, the cabinet sanctioned a monthly allowance of Rs 5,000 for clerks-typists working in the Mantralaya, benefiting 1,891 clerks-typists due to high attrition.

Other decisions include a substantial contribution of Rs 750.49 crore from Maharashtra to build a railway line between Nanded district and Bidar in Karnataka, relaxation of NPA conditions benefiting 400 units in Ichalkaranji Powerloom Mega Cluster, and a five-year wine industry stimulus scheme.

The state aims to cover 50% of the rural railway line construction cost between Nanded and Bidar, encouraging railway connectivity. Furthermore, the government approved a change in the no-confidence motion timeframe for officers and plans to implement a five-year wine industry stimulus scheme.

According to Vishwas Katkar, this decision will only benefit 26,000 state employees, while 9.5 lakh state employees who joined before November 2005 already enjoy OPS benefits.

Under OPS, a government employee gets a monthly pension equivalent to 50% their last drawn salary without needing to contribute. The OPS stopped in the state in 2005. Conversely, NPS requires a 10% contribution from the employee’s salary plus a state-matching contribution, invested in approved pension funds.

The cabinet’s nod also includes a Rs 250 toll for cars using the Mumbai Trans Harbour Link (MTHL), which will reduce the journey time significantly. Also, a Rs 5 per litre subsidy for milk producers and a monthly allowance of Rs 5,000 for clerks-typists in Mantralaya were approved.

Civil Servants employed before 2004 enjoyed benefits from both the Civil Service Pension Scheme and the General Provident Fund. These programs, established in 1972 and 1981 respectively, operated on a defined benefit structure where employees didn’t contribute. The pension was funded through the state budget. To qualify for a pension, a minimum of ten years in service was required, with the pensionable age set at 58. Retirees received 50% of their last salary as a monthly pension. However, due to the strain this placed on government finances, it was phased out for new civil servants in 2004, replaced by the National Pension System (NPS).

The NPS, regulated by the Pension Fund Regulatory and Development Authority (PFRDA), began after the Government decided to move away from defined benefit pensions for employees entering service after January 1, 2004. Under NPS, employees contribute 10% of their gross salary, matched by their employer. Upon retirement, 60% can be withdrawn as a lump sum, with the remaining 40% mandated for an annuity to provide a monthly pension aiming for 50% of the final salary. This system is compulsory for civil servants and optional for others.

In the General Provident Fund Scheme, employees must contribute a minimum of 6% of their gross salary, with a guaranteed return of 8%. Upon retirement, the lump sum amount can be withdrawn.

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