PFRDA Opens The Floor For Ideas To Strengthen India’s Pension System

The Pension Fund Regulatory and Development Authority (PFRDA) recently hosted a seminar in Mumbai, according to a recent press statement by the Press Information Bureau (PIB), bringing together a mix of economists, academics, pension fund officials, and insurance professionals. The session revolved around one core theme — how to make India’s National Pension System (NPS) more adaptable to changing times and more reliable for those entering retirement.

The gathering wasn’t just a formality. It was part of a wider exercise by the pension regulator to gather opinions on a discussion paper titled “Enhancing the National Pension System for a Flexible and Assured Retirement.” The paper explores new ways to manage the phase when pensioners begin drawing down their savings, an area that has gained attention as the NPS matures and more people start relying on it after decades of contribution.

Three Routes To A Smarter Pension

The PFRDA has suggested three broad designs for consideration. The first option, Pension Scheme‑1, is designed to give retirees more control over their money. It lets them withdraw part of their savings gradually while also receiving a regular annuity to provide a steady income.

The second option, Pension Scheme-2, offers an assured benefit that adjusts to inflation, pegged to the Consumer Price Index for Industrial Workers (CPI-IW). This would help preserve purchasing power through the years. The third, Pension Scheme-3, introduces “pension credits” — each credit translates into a guaranteed monthly amount, which could make planning and goal-setting much clearer for individual subscribers.

The discussion showed that thinking around pensions is beginning to change. The old idea of a single plan for every retiree doesn’t match the way people’s financial situations differ today. The focus is gradually shifting toward options that give individuals more control while still providing a dependable source of income in retirement.

When experts were invited to weigh in, the room came alive with diverse viewpoints. Professor Arun Muralidhar from Georgetown University, economist Dr. Renuka Sane, and investment professional Ravi Saraogi, CFA, each offered their own perspective. They ranged from examining lessons from other countries to considering practical ways to make these ideas work in India, translating complex policy concepts into real-world applications that retirees could actually benefit from.

They spoke about lessons from global pension systems and the adjustments required to make them relevant to India’s demographic profile. Participants also discussed practical issues — from product design to fund management and communication with retirees — bringing together theory and real-world perspective.

PFRDA has kept the consultation paper open for public comment. Inputs are being sought from pension funds, insurance companies, policy researchers, and the general public. Instead of making decisions on its own, the regulator is taking a step back and asking for input from everyone involved, opening the door to real conversation.

The event in Mumbai was more than a technical session. It underscored a quiet but important transition — India’s move towards building a pension ecosystem that promises both choice and stability. For millions who will one day depend on the NPS, that shift could make all the difference between financial uncertainty and genuine peace of mind.