Universal Pension Scheme: A Step Towards Financial Security for All
The government is working on a Universal Pension Scheme designed to provide financial security to all citizens, regardless of their employment status. With a significant increase in the senior citizen population expected in the coming years, the initiative aims to ensure social protection for everyone.
According to reports, the Ministry of Labour and Employment has started discussions on implementing an Umbrella Pension Scheme to consolidate existing pension schemes and make them accessible to a wider population.
A senior government official stated that the proposed pension scheme will be voluntary and contributory, meaning any Indian citizen can contribute a specified amount and receive a pension in return. Unlike employment-linked pension schemes, this program would be open to self-employed individuals, informal sector workers, and anyone willing to contribute.
Sources indicate that the Employees' Provident Fund Organisation (EPFO) is working on developing the broad structure of this scheme. The government will engage with stakeholders to finalize the plan and may merge existing pension programs under this universal scheme.
Both schemes are voluntary and require a monthly contribution ranging from ₹55 to ₹200, depending on the individual's age at the time of enrollment. Under these schemes, contributors receive a fixed pension of ₹3,000 per month after turning 60, with the government matching their contributions.
The Atal Pension Yojana (APY), currently managed by the Pension Fund Regulatory and Development Authority (PFRDA), may also be included under this new pension framework. Additionally, funds collected under the Building and Other Construction Workers (BOCW) Act could be redirected towards pension benefits for workers in this sector.
To make this scheme more effective, the central government may encourage state governments to integrate their existing pension programs under the Umbrella Pension Scheme, ensuring uniform distribution of government contributions across beneficiaries.
India's senior citizen population (aged 60 years and above) is expected to reach:
Countries like the US, Canada, Russia, China, and several European nations have robust social insurance systems covering pensions, healthcare, and unemployment benefits.
In India, social security mainly depends on provident fund systems, old-age pension programs, and health insurance for recognized beneficiaries, most of whom belong to the below-poverty-line category. This new Universal Pension Scheme aims to expand coverage and provide financial security to a much larger segment of the population.
With India’s aging population on the rise, the government’s move to introduce a Universal Pension Scheme could be a significant step toward ensuring financial stability for citizens. By making it voluntary and open to all, it provides a much-needed safety net for those who may not have access to traditional employer-backed pension schemes.
