Prior To Budget, Survey Says EPFO, PFRDA, Pension Bodies Need To Align For Pension Expansion

Union Budget 2026: India’s elderly population is projected to climb from 10.1 per cent in 2021 to 14.9 per cent by 2036. In comparison, the working-class population is expected to see only a marginal increase from 64.2 per cent to 64.9 per cent of the total population during the same period. This shift in demography needs to be looked at and managed carefully to keep the development momentum going. The Economic Survey, 2026, highlights the need to plan the shift so that today’s workers, after retirement, remain financially secure.

An Array Of Pension Schemes For Different Segments Of the Population

It highlights the role the Pension Fund Development and Regulatory Authority (PFRDA) is playing, and the multi-layered system it has created to cover the broad population. The survey underlines different schemes that are running in India to provide social security, including the National Pension System (NPS), government-backed Unified Pension Scheme (UPS), the Atal Pension Yojana (APY), and the Employee's Provident Fund (EPF). The survey notes that the NPS has made significant growth over the last few years, reaching Rs 16.1 crore of assets under management (AUM) and 21.17 million subscribers as of December 31, 2025. The AUM has grown at a compounded annual growth rate (CAGR) of 37.3 per cent over the last decade.

The innovation in the scheme, such as UPS, a blend of the guaranteed minimum pension and market-linked investment growth, has been launched to provide retirees with both liquidity and flexibility. NPS Vatsalya was launched to target minors and to cultivate a savings mindset from an early age.

To expand the coverage and bring more sections of the society under pension coverage, the PFRDA has launched the NPS e-Shramik Model in October 2025, for the platform and gig workers. Now, they are also covered under the social security scheme. In addition to it, the partnership between PFRDA, Farmer-Producer Organisations (FPOs), and Micro, Small, and Medium Enterprises (MSMEs) has been another shot to bring agricultural workers under the NPS and APY coverage.

Pension Coverage Remains Modest

Employees' Provident Fund Organisation (EPFO), on the other hand, covers organised sector employees and offers pension, insurance coverage, and provident fund. However, despite this diverse array of schemes, the pension coverage remains modest compared to the total workforce in India.

As per the survey, the reason behind this is the gap in awareness in rural and low-income households, and that many of them have irregular incomes, which makes saving regularly for the long term difficult. Although digital measures, such as e-KYC, e-NPS, and integration of payment platforms, have made accessing these schemes easier, digital literacy and uncertain and volatile cash flow remain an impediment.  

It reflects in the pension asset to GDP ratio as well. As per the Mercer CFA Global Pension Index, India’s pension assets are roughly 15-20 per cent of its GDP, whereas it is 60-100 per cent in the advanced OECD markets. Clearly, India ranks significantly lower in comparison.

Regulatory Coherence Is The Way Forward

The survey suggests “Regulatory coherence” for better alignment between PFRDA, EPFO, and state-level pension bodies. This, it says, is necessary to mitigate fragmentation, improve portability, and streamline governance. Per the survey, it is essential to strengthen the actuarial evaluation framework, diversify long-term investments, and deepen data-sharing mechanisms to provide enhanced pension coverage. By doing this, India can build an inclusive and resilient pension system.