Maharashtra Clarifies Existing NPS Employees Need Not Shift to Revised Pension Scheme

The Government of Maharashtra has clarified that the revised National Pension Scheme is optional for employees already covered under the existing NPS. The clarification was issued through a circular dated May 6, 2026.

Employees who wish to shift to the revised scheme must exercise a one‑time option within the stipulated timeline. The revised NPS aligns closely with the Centre’s unified pension scheme framework.

Revised NPS Made Optional for Existing Employees

The May 6, 2026, circular states that employees currently covered under NPS are not mandatorily required to shift to the revised scheme. Only those who explicitly opt for the revised NPS within the deadline will be covered under it.

The option window remains open until December 31, 2026, as earlier announced by the state government. Employees who do not exercise the option will continue under the existing NPS structure.

Alignment With Unified Pension Scheme Framework

The revised NPS has been introduced on the lines of the Centre’s unified pension scheme. The UPS is applicable by default to new central government recruits joining from April 1, 2025.

Maharashtra’s revised scheme mirrors key structural elements of UPS to create parity in pension benefits. To further align the two schemes, the government has also confirmed that UPS will carry tax benefits similar to NPS.

Pension Benefits Under the Revised Scheme

One of the key features of the revised NPS is assured pension linked to last‑drawn salary. Employees completing 20 years or more of service will be eligible for a pension equal to 50% of their last‑drawn salary plus dearness allowance.

Those with service between 10 and 20 years will receive a proportionate pension based on service length. A minimum pension of ₹7,500 per month has been fixed for employees retiring after completing 10 years of service.

Conditions On Withdrawals and Resignation

The circular specifies that any withdrawals made earlier from the NPS corpus must be returned with 10% interest. Failure to return the withdrawn amount will result in proportionate reduction in pension benefits.

Employees resigning from service will not be eligible for a pension under the revised scheme. Such employees will continue to receive benefits strictly under the existing NPS framework.

Read More: PFRDA Launches NPS Sanchay Scheme for Informal Sector.

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Conclusion

The revised NPS introduced by the Maharashtra government offers an optional pension structure for existing NPS subscribers. It provides assured pension benefits linked to last‑drawn salary, subject to service tenure conditions.

The scheme also brings alignment with the Centre’s UPS through similar benefits and tax treatment. However, detailed procedures for pension disbursement are still awaited from the government.

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