Consider enjoying your golden years without the pension's safety net. Uncertainty, no defined savings plan, no consistent income. Millions of indians, especially those employed in the sizable and unorganized sector, live like this. The government is currently investigating a Universal Pension Scheme (UPS), a daring plan that aims to restructure the nation's social security system in response to this growing worry.
 
 This new plan intends to incorporate everyone, from gig workers and domestic help to self-employed people, in contrast to current pension plans that predominantly serve salaried employees.  If put into practice, it might offer a much-needed safety net to people who don't currently have a formal plan in place for their post-retirement financial security.
 
However, what exactly does UPS involve?  How will it be different from current plans?  Above all, can it provide the kind of security that millions of indians require as they age?
 
In its widest definition, UPS refers to a retirement benefit program that is available to all citizens, irrespective of their work position.  Self-employed people, gig workers, and workers in the unorganized sector are all covered by a universal pension, in contrast to employment-linked pension plans, which are normally only available to formal sector employees.  These programs, which are frequently state-funded in affluent countries, give retirees a bare minimum of financial stability.

However, the proposed plan in india is contributory and voluntary, which means that people will have to contribute on their own to increase their pension fund without any financial assistance from the government.  The state-funded universal pension schemes found in nations like Denmark, the Netherlands, and new zealand stand in stark contrast to this.
 
Currently, India's pension system is disjointed, with several programs serving various populations:

* Employers and employees must contribute to retirement benefits through the Employees' Provident Fund Organization (EPFO), a required savings plan for salaried workers.
 
 * In contrast, the National Pension System (NPS) is a voluntary program that enables workers in the public and private sectors to invest in pension funds that offer market-linked returns and tax advantages.
 
 * Based on contributions over time, the Atal income Yojana (APY) offers individuals in the unorganized sector a guaranteed income upon retirement that ranges from Rs 1,000 to Rs 5,000 per month.
 
 * In a similar vein, the Pradhan Mantri Shram yogi Maandhan (PM-SYM) provides laborers, domestic helpers, and street sellers with a monthly pension of Rs 3,000.
 
* The Pradhan Mantri Kisan Maandhan Yojana (PM-KMY) provides a fixed pension of Rs 3,000 per month to farmers.
 
 Notwithstanding these choices, india does not have a thorough and efficient pension system that provides equal coverage to all of its inhabitants.  By developing a single, optional pension plan that is available to everyone, regardless of occupation or income, UPS hopes to close this disparity.
 
 India's population is aging quickly.  It is anticipated that 227 million people, or 15% of the total population, will be 60 years of age or older by 2036.  This number is expected to increase to 347 million (20%) by 2050.
 
At the moment, targeted old-age pension plans and provident funds are the mainstays of India's pension system.  However, a strong, long-lasting, and inclusive pension plan is becoming essential as life expectancy rises and joint family support systems diminish.  By promoting voluntary savings among all residents, including those in the informal economy, the proposed UPS is a step in the right direction towards closing this gap.
 
 The 2024 Mercer CFA Institute Global Pension Index places india bottom out of 48 nations, despite the existence of numerous pension plans.
 
 
 
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SIBY JEYYA

04/03/2025 09:58 AM