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Informist, Tuesday, Jan. 13, 2026

 

NEW DELHI – The Pension Fund Regulatory and Development Authority has formed a high-level committee tasked with developing guidelines and regulations to enable a framework for assured pension under the National Pension System, the finance ministry said Tuesday. This move aligns with the provisions of the PFRDA Act and aims to enhance the security of retirement income for subscribers, the ministry said.

 

This comes at a time when PFRDA's much-touted minimum assured pension plan was beginning to sound like a forgotten project, especially as it tried to address the issue of defined pension through the Unified Pension Scheme. But the Unified Pension Scheme has also not been accepted widely, with calls for defined benefits persisting.

 

The committee formed by PFRDA will be chaired by M.S. Sahoo, founder of Dr. Sahoo Regulatory Chambers and former chairperson of the Insolvency and Bankruptcy Board of India. The 15-member panel includes a diverse group of experts from various disciplines like legal, actuarial, finance, insurance, capital markets and academia. "Furthermore, to ensure comprehensive deliberation, the committee has been authorised to invite external experts or intermediaries as special invitees for feedback and consultation," the ministry said.

 

According to a press release, the committee will explore pension schemes that the pension regulator had floated for public comments in a consultation paper in September. It had proposed few pension schemes – first, a non-assured scheme focused on maximising pension wealth through a mix of step-up systematic withdrawal plan and annuity; second, an assured scheme providing a target pension with periodic inflation adjustments; and third, a concept titled "Pension Credits" based on the idea of goal based investing. Each credit assures fixed monthly pension payouts in the decumulation phase to the subscriber, it had said.

 

The committee will also work on ways to smoothen end-to-end transition for subscribers moving from the accumulation phase to the payout phase, deliberate settlement concepts to ensure legally enforceable and market-based guarantees, defining terms like lock-in periods, withdrawal limits, pricing mechanisms and fee structures for providers, among others.

 

The government introduced the defined-contribution National Pension System on Jan. 1, 2004, replacing the defined benefit pension scheme. All states, except West Bengal, joined the new plan. Under the Old Pension Scheme, government employees who have completed at least 10 years of service receive a monthly guaranteed pension based on their last drawn basic salary and the years of service. There was no contribution from the employees under the plan.

 

Combining the National Pension System and Old Pension Scheme, the government announced the Unified Pension Scheme in August last year after numerous rounds of discussions with stakeholders, including employee associations. Unified Pension Scheme retains employee contributions but guarantees a pension equivalent to 50% of the average basic pay drawn in the final 12 months of service. A floor of INR 10,000 per month is set for those with at least 10 years of service. The scheme also includes inflation-indexing to preserve real value. Despite these benefits, Unified Pension Scheme did not find too many takers.

 

The pension regulator had done considerable work on the minimum assured pension plan and was set to launch it in 2023-24 (Apr-Mar). However, little to no work on it was done after April 2023 when the government set up a four-member committee headed by then finance secretary T.V. Somanathan, who is currently the Cabinet Secretary, to review the New Pension System.  End

 

Reported by Priyasmita Dutta

Edited by Ashish Shirke

 

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