The Pension Fund and Regulatory Authority (PFRDA) has recently released an elaborative consultation paper with a heading “Enhancing the National Pension System: Proposals for Flexible, Assured and Predictable Pension Schemes”.
PFRDA offers the stakeholders across various sectors to provide opinion on proposed reforms which is focused at powering the National Pension System (NPS).
Yesterday, the paper showcases three innovative pension scheme options under the NPS structure that is designed to offer the subscribers greater flexibility, assurance and predictability in their post- retirement income, ANI cited by the release of Ministry of Finance.
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The first one is Pension Scheme-1 (Non-Assured, Flexible Decumulation),highlights wealth maximization by combining a step-up Systematic Withdrawal Plan (SWP) with an allowance. This combine approach allows the follower to get the perks from both planned withdrawals and guaranteed income that offers flexibility in managing retirement funds.
Pension Scheme-2 (Assured Benefit) aims subscribers seeking assured pension payouts. This scheme targets to provide a Target Pension that is periodically adjusted for inflation, based on the Consumer Price Index for Industrial Workers (CPI-IW). This ensures that the pension keeps pace with rising living costs, offering financial security and predictability.
And the last option is Pension Scheme-3 (Assured through Pension Credits), introduces the novel concept of “Pension Credits.” Each credit denotes a fixed monthly pension payout, providing subscribers with a transparent, goal-oriented framework that enhances predictability and engagement in planning their retirement income.
PFRDA has made the consultation paper accessible on its official website under the research and publication section and encourages a wide array of stakeholders, including current and prospective NPS subscribers, pension funds, industry experts, academicians, and the general public to review the proposals and provide constructive inputs.
All feedback should be submitted using the feedback template included within the consultation paper by 31 October 2025.
With inputs from ANI