Madhya Pradesh govt to adopt Unified Pension Scheme, forms six-member panel

The state Cabinet on Tuesday approved forming of a six-member committee to evaluate and develop a proposal, although as an alternative, under the UPS for state employees.

"The committee comprises senior civil servants including Ashok Barnwal, Manish Rastogi, Lokesh Jatav, Tanvi Sundriyal, Ajay Katesaria, and JK Sharma," Kailash Vijayvargiya, State Urban Development Minister, said here on Tuesday.

The committee's task involves studying the relevant guidelines issued by the Indian government and submitting a detailed report based on their findings.

This initiative follows the framework outlined by the Central government.

Although the implementation of the UPS is not mandatory for state governments, some states have proactively embraced the scheme for their employees.

Maharashtra was the pioneer, becoming the first state to approve and adopt the UPS for its workforce.

The Unified Pension Scheme, introduced by the Central government on August 24, 2024, became operational on April 1, 2025.

Retirement planning is a critical financial decision, particularly for government employees, and the introduction of UPS has presented them with a choice -- whether to stick with the existing National Pension Scheme (NPS) or transition to the newly launched scheme.

The UPS brings a significant change by guaranteeing a fixed pension.

Employees with 25 or more years of service will receive 50 per cent of their average basic pay for the last 12 months before retirement.

Those who have completed at least 10 years of service are assured a minimum monthly pension of Rs 10,000 after retirement.

In the unfortunate event of the employee's demise, their family will receive 60 per cent of the pension amount.

In contrast, the National Pension Scheme, introduced in 2004 to replace the Old Pension Scheme (OPS), operates on a market-linked model.

Initially available only to government employees, the NPS was expanded in 2009 to include NRIs, self-employed individuals, and workers from the unorganised sector.

Unlike the UPS, the NPS does not guarantee a fixed pension.

Instead, the pension amount depends on investment performance.

Participants contribute regularly to pension funds and can withdraw 60 per cent of the accumulated amount as a lumpsum upon retirement, with the remainder invested in an annuity plan to receive monthly payouts.

"With the introduction of the UPS, employees are now at a crossroads, weighing the predictability and security of the new scheme against the flexibility and market-driven potential of the NPS," a retired senior civil servant told IANS.

The committee's recommendations will likely play a pivotal role in shaping the future of retirement planning under this framework.