Pension Fund Regulatory and Development Authority (PFRDA) has constituted a high-level expert committee to pave the way for assured and stable income after retirement under the National Pension System (NPS).
This committee has been given the responsibility of formulating such rules and guidelines within the existing structure of NPS, through which pensioners can get market based but legally enforceable assured pension.
This step of PFRDA is not only being considered important towards strengthening the retirement security of pensioners, but is also linked to the government’s broader goal of Developed India 2047, which includes ensuring economic self-reliance and a dignified life to every citizen in old age.
what will be the change
This 15-member committee is headed by Dr. M.S. Sahu, who has been the former Chairman of Insolvency and Bankruptcy Board of India (IBBI) and is currently Dr. Sahoo is the founder of Regulatory Chambers. The committee includes experts from law, actuarial science, finance, insurance, capital markets and academia. Along with this, PFRDA has also given the right to the committee to include external experts and arbitral institutions in the discussion as special invitees, if needed.
The committee will have to work as a permanent advisory body on Structured Pension Payouts. Its main objective is to create a regulatory framework for assured pension payment in NPS, which can take forward the pension schemes suggested in the consultation paper of PFRDA issued on 30 September 2025. Under this, the committee will also ensure that the process is simple, transparent and hassle-free for the customers from the accumulation stage of investment in NPS to the pension payment i.e. decumulation stage.
This is how you will get benefit
In addition, the committee will also consider ways to legally implement market-based guarantees. This includes brainstorming on concepts like novation and settlement, so that the credibility of pension payments is maintained. Also, operational aspects such as lock-in period, withdrawal limits, pricing model and service charges will be clearly outlined. Risk management will also be included in the major functions of the committee. Under this, along with determining the capital and solvency requirements, the tax aspects will also be reviewed in which cases the pensioner will receive assured pension without exiting the NPS.
Additionally, a standardized disclosure framework will be put in place to protect the interests of customers, prevent mis-selling and clearly explain the difference between pension assurance and market-based guarantee. Overall, this initiative by PFRDA signals that concrete steps are being taken towards transforming NPS from being merely a market-based retirement product to a more secure and reliable pension system. The recommendations of the expert committee can give a new direction to the future of India’s pension system in the coming times.