Govt Considering Launching Unified Regulation For All Pension Schemes: Report

The government is reportedly in the process of setting up a supervisory framework for all retirement financing schemes. This will also create a grievance redressal mechanism.

At the time, India’s pension system remains fragmented, with multiple regulators overseeing different schemes.

Source : Tata AIA

The government is reportedly working to establish a unified regulatory and supervisory framework for all retirement financing schemes. Citing sources in the know, The Economic Times reported that as part of this effort, the authorities also aimed to create a grievance redressal mechanism in hopes of addressing the country's pension gap.

Officials are in the process of finalising the terms of reference for a proposed forum focused on regulatory coordination and pension product development, the report noted.

The forum will evaluate ways to harmonise regulations and remove overlapping supervisory roles across various pension schemes, the report added.

Quoting an official in the know, the report said, "There is a need for common regulatory standards that ensure good governance and effective grievance redressal." The initiative will also try to explore the possibility of integrating different pension schemes currently managed by multiple central government agencies.

Need for Better Pension Coverage

India’s pension coverage remained limited and this has prompted discussions on the development of new products, the report said. Since the National Pension Scheme (NPS) operated on a voluntary basis and the Employees' Pension Scheme (EPS) under EPFO has a wage ceiling of Rs 15,000 per month, large sections of the workforce remained outside the system.

"The proposed forum may also suggest measures to converge existing pension schemes under a unified body to enhance coverage and streamline implementation," the report said quoting an official.

Notably, in her latest Budget presentation, Finance Minister Nirmala Sitharaman, announced the establishment of a forum for regulatory coordination and pension product development. This forum played a key role in developing common supervisory reporting formats, improving consumer protection standards, and advancing broader market development initiatives.

At the time, India’s pension system remains fragmented, with multiple regulators overseeing different schemes. This lack of consistency makes pensions a less attractive financial product, according to the finance ministry.

The proposed forum intends to address these issues by bringing regulatory uniformity, reducing fragmentation, and strengthening the pension sector. Additionally, the government is reportedly considering introducing a universal pension scheme for all.