Talking Point: India shows max improvement in global pension

Now in its eighth year, the Melbourne Mercer Global Pension Index highlights significant improvement made by India meriting popularity of tax incentives under National Pension scheme, introduction of Universal Account Number (UAN) for Provident Fund by EPFO and increasing the pension age from 58 years to 60 years Under statutory pension plan EPS 95 which offers regular stream of income on retirement. 

Anil Lobo, India Business Leader – Retirement, Mercer adds, “New initiatives by the Government in providing tax incentives under National Pension system both during accumulation stage and withdrawal at retirement are increasing its popularity among employees in corporate sector. Further Atal Pension Yojana (APY) launched last year has also contributed to increase in coverage for pension among workers in the unorganised sector. As APY is a guaranteed pension scheme of the government, it paves the way for securing old age income by facilitating regular savings of small amounts during the earning phase of life.”  

Mercer believes continued and persistent efforts in increasing financial literacy through various programmes driven by the government, Pension Fund Regulator and also involving various financial institutions including banks have helped increase subscribers under both these schemes. However, there is work to be done to achieve the coveted ‘A Grade’, only ever held by Denmark and Netherlands. “Additionally, UAN has eased transfer and traceability of transfer of Provident Fund under statutory Pension plan. Moreover, implementation of UAN ensures avoiding unnecessary leakage from the pension fund,” cited Lobo.