New Pension Scheme - Universal Pension for All from Government!

The Indian government is working on a Universal Pension Scheme, allowing voluntary contributions to ensure retirement benefits for all citizens, according to the reports.

The initiative aims to expand social security beyond traditional employment by providing a structured pension system accessible to a wider section of society. The Ministry of Labour and Employment is spearheading the proposal, intending to unify existing pension schemes under a single framework.

Open to All, Not Linked to Employment

A senior government official quoted in the report emphasized that the scheme will be open to everyone, irrespective of their employment status. This means that self-employed individuals, unorganised sector workers, and others can participate and accumulate pension benefits over time.

The Employees’ Provident Fund Organisation (EPFO) is currently developing the scheme. Once the framework is finalised, the government will engage with stakeholders to ensure seamless implementation.

Integration of Existing Pension Schemes

• The proposed scheme is expected to integrate existing pension programs, including:
• Pradhan Mantri Shram Yogi Maandhan (PM-SYM)
• National Pension Scheme for Traders and Self-Employed (NPS-Traders)

Atal Pension Yojana (APY)

Currently, PM-SYM and NPS-Traders offer a monthly pension of Rs 3,000 after retirement, with contributions ranging from Rs 55 to Rs 200 per month, matched by the government. The Atal Pension Yojana, regulated by the Pension Fund Regulatory and Development Authority (PFRDA), may also be brought under this universal framework.

To support construction sector workers, the government is considering using cess collected under the Building and Other Construction Workers (BoCW) Act to fund their pensions.

Wider Coverage & State Government Involvement

The Universal Pension Scheme is expected to benefit various groups, including traders, self-employed individuals, and unorganised sector workers, offering them financial security after retirement. The scheme will be open to individuals aged 18 and above, ensuring pension benefits upon reaching 60 years of age.

The government may also encourage state governments to merge their existing pension schemes with this initiative to enhance pension payouts and prevent duplication of beneficiaries.

Global Perspective on Universal Pension

Several developed nations, including the US, Canada, Russia, China, and most European countries, have structured social security systems covering pensions, healthcare, and unemployment benefits. Nations such as Denmark, Sweden, Norway, the Netherlands, and New Zealand have universal pension schemes to secure financial stability for their elderly population.

Currently, India's social security system primarily relies on provident fund schemes, old-age pensions, and targeted health insurance for individuals below the poverty line. The Universal Pension Scheme aims to broaden pension coverage and create an inclusive and sustainable social security system for the country’s workforce.