Centre Considers 'Universal Pension Scheme' to Ensure Retirement Security for All Indians

Central government is mulling launching a Universal Pension Scheme to make all Indians financially secure irrespective of their employment.

As per reports, the Ministry of Labour and Employment has begun discussing the structure for this ambitious proposal with different stakeholders. No announcement has been made by the government yet.

The scheme is likely to be voluntary, with people signing up and paying monthly towards their pension. In contrast to current sector-specific pension schemes, this scheme would be universal, covering all workers, including those in the unorganised sector, like gig workers and domestic workers, who are not covered by any pension scheme at present.

The Employees' Provident Fund Organisation (EPFO) would probably be the nodal agency tasked with formulating and operating the scheme. News indicates that the government could even co-contribute to pension accounts—monthly or quarterly—to facilitate participation.

This strategy reflects current voluntary pension schemes such as:

National Pension Scheme (NPS) for traders and self-employed persons.
Pradhan Mantri Shram Yogi Maandhan (PM-SYM), which provides a Rs 3,000 per month pension at the age of 60 and above, with contributions of Rs 55 to Rs 200, being matched by the government.
Under the new program, some of these current pension schemes will be consolidated into the Universal Pension Scheme. The government is also reportedly considering merging the Atal Pension Yojana, which presently offers retirement benefits to low-income earners under the supervision of the Pension Fund Regulatory and Development Authority (PFRDA).

Moreover, officials are exploring the possibility of using cess money raised under the Building and Other Construction Workers (BoCW) Act to fund pensions for construction workers.

If put into practice, the Universal Pension Scheme may be a turning point for crores of Indians, especially those who work in the informal sector, to be financially secure in their old age.