Union Labour and Employment Ministry is working on a universal pension scheme for the working age population — be it salaried, businessmen, gig workers, self employed and construction workers — as a step towards social security which would make their post-retirement lives more dignified.
The Employees’ Provident Fund Organisation (EPFO) is putting together the universal pension scheme which is at a preliminary stage and will be voluntary and contributory. Ministry sources said the government may offer various flexible options like whether an enrolled person wants pension out of interest or with both the investment and interest incurred on it.
Ministry sources said that it is still not decided that the universal pension, designed to make post retirement life comfortable for India’s elderly population (aged 60 and above), which is set to grow from 153 million to 347 million by 2050, will subsume other already available options in the country.
As per the United Nations Population Fund (UNFPA), 40 per cent of the country’s elderly fall in the poorest wealth category and one-fifth live without any income of their own, which means they are a “burden” on others for their survival, Ministry sources said.
The voluntary pension package, if it comes into existence, would be a sovereign guarantee unlike pension offered by the Life Insurance Corporation (LIC) and private players, said Ministry sources. It will be applicable to a subscriber’s nominee in case of his or her death, similar to other schemes available in the market.
The Ministry is also deliberating on transferring a portion of the cess from Construction Welfare Fund towards the pension of construction workers, said sources. The States manage the Construction Welfare Fund but the Centre may advise States in the scheme.
Consultations with stakeholders will follow after the EPFO prepares a draft of the voluntary pension.