In a major relief for state government employees, the Maharashtra government has made the revised National Pension System (NPS) optional for employees already covered under the current NPS framework.
This means lakhs of employees can now choose between:
Continuing with the existing market-linked NPS
Switching to a revised pension scheme that offers guaranteed pension benefits
The biggest attraction of the new scheme is that eligible employees can receive up to 50% of their last drawn salary as monthly pension after retirement.
The new rules were announced through a circular issued by the Maharashtra finance department on May 6, 2026.
Who Will Get 50% Pension?
Under the revised scheme, employees who complete 20 years or more of service will receive:
50% of their last drawn salary as pension
Dearness allowance (DA) along with pension
This is a major change from the current NPS system, where retirement benefits depend on market performance and investment returns.
Employees with service between 10 and 20 years will receive proportionate pension benefits.
The government has also announced a minimum pension of ₹7,500 per month for employees who have completed at least 10 years of service.
Last Date to Choose the Scheme
The government has set a deadline for employees to decide whether they want to switch to the revised pension structure.
Eligible employees must exercise their option by December 31, 2026.
Those who do not opt for the revised scheme within the deadline will automatically continue under the existing NPS system.
What Is the Biggest Catch?
While the revised scheme offers guaranteed pension income, employees will have to make an important financial adjustment at the time of retirement.
Employees choosing the revised pension system must:
Deposit 60% of their accumulated NPS corpus with the government
Use the remaining 40% to buy an annuity plan
The income earned from the annuity will then be adjusted against the pension paid by the state government.
In simple terms, employees will give up a large part of their retirement corpus in exchange for fixed pension security.
Withdrawn Money Must Be Returned
The government has also added a strict rule for employees who previously made partial withdrawals from their NPS account.
Such employees must:
Return the withdrawn amount
Pay 10% interest on that amount
If they fail to repay it, their pension benefits may be reduced under the revised scheme.
Family Pension and Other Benefits
The revised structure also provides better social security benefits for families.
According to the circular:
Family pension will be 60% of the employee’s pension
Dearness relief will also be included
Retirement gratuity benefits will continue as per earlier government orders
These features make the revised scheme closer to the old pension-style benefits that many employee unions have been demanding for years.
Who Will Not Get the Benefit?
Not all employees will qualify for the revised pension system.
The following people will not be eligible:
Employees who resign from service
Employees with less than 10 years of service
Such employees will continue under the existing NPS rules.
Scheme to Cover More Employees
The Maharashtra government has also said that the revised pension provisions may be extended to:
Employees of aided educational institutions
Agricultural university staff
Non-government affiliated college employees
Zilla Parishad staff
Panchayat Samiti employees
This means the impact of the new pension policy could go far beyond core government departments.
