In the British political satire Yes Minister, Sir Humphrey often derailed reforms by creating “interdepartmental committees”—mechanisms to foster ‘creative inertia’ and ‘plausible denial.’ The newly formed Forum for Regulatory Coordination and Development of Pension Products has the potential to prove him wrong and drive meaningful change.
India’s pension landscape is governed by multiple regulators. Corporate pensions are overseen by the Employees’ Provident Fund Organisation (EPFO), while government and voluntary schemes fall under the Pension Fund Regulatory and Development Authority (PFRDA). EPFO’s offerings include the Provident Fund, Employees’ Pension Scheme, and Employees Deposit Linked Insurance Scheme, while PFRDA’s National Pension System focuses on lump sum and pension benefits.
Beyond these, pensions exist for defence, railways, coal miners, banking sectors, superannuation trusts, and excluded provident funds. Recent additions include social security schemes for gig and platform workers. These programmes intersect with regulators such as the income tax department, Reserve Bank of India, Securities and Exchange Board of India, and state-level trust regulators.
With a vast labour force, active capital markets, and advanced technology, India is primed for a pension ecosystem that offers flexibility and tailored solutions. Yet, systemic flaws continue to hold this dream back.
Choice without freedom
Though pension products offer variety—from British-era provident funds to modern 401(k)-like schemes—the regulatory framework undermines this diversity. Corporate employees can only choose their asset allocation through voluntary schemes like the NPS, not via mandatory contributions like the EPF. This one-size-fits-all approach discourages engagement.
Portability gaps
Limited portability further weakens the system. Transfers between pension plans are largely blocked. EPFO members cannot move funds to the NPS or other schemes, reinforcing the perception of pensions as tax burdens rather than long-term social security tools—especially amid high labour mobility.
Technology woes
Administrative inefficiencies plague the sector. Though EPFO is often blamed, similar issues are seen in SPARSH (defence pensions) and other areas—delayed disbursals, inaccessible statements, and cumbersome processes. Technology adoption is improving matters, but customer satisfaction remains a distant goal.
Missing adequacy focus
The emphasis on administrative ‘hygiene’—accessibility, grievance redressal, interest rates—has overshadowed the bigger question: are pension outcomes sufficient to replace pre-retirement income?
Questions such as ‘are we saving enough for our retirement, should we change design to meet long term needs’ should not be asked only by retail retirement planners but also by policy makers and regulators.
Institutionalising such objectives is a long-term requirement and will ensure development of the pension market.
A host of other issues remain as well, such as differential tax treatment of different plans (PF vs NPS vs superannuation vs retail pensions), differential asset allocation resulting in different returns across schemes, practices in trusteeship and governance, accounting practices, role of investment managers in such plans, etc.
Resolution of some of these will require many multi-regulator efforts, something that this forum can provide. A few low-hanging fruit in the reform agenda are standardising accounting practices across schemes (read: unitising the EPF), removing anomalies in taxation of different stages of pensions, increasing focus on Trusteeship, and improving standards of administration and governance of these plans.
More profound reforms, like creating a unified pension regulator, redefining EPFO’s responsibilities, enabling portability between plans, and balancing assured versus market-linked pensions, will require legislative action. The forum should aspire to more than incremental improvements—it should be the foundation for transformational change. It’s time to prove Sir Humphrey wrong.
Amit Gopal is a Bengaluru-based pension consultant.