Examining the regulatory framework for pensions in India

Reports by Corporate & Financial Law · March 29, 2019
Author(s): Debanshu Mukherjee, Ulka Bhattacharyya and Shohini Sengupta

Pensions primarily act as a buffer against old-age income insecurity. In the context of rising life expectancies, both globally and in India, having access to reliable old-age income security is urgent. In the Indian context, the present regulatory framework for pensions is highly fragmented, with multiple regulators, governing regulations and schemes. Such disparity does not lend itself well to creating simple, effective and harmonised pensions for all citizens. Further, the tilt towards securing pensions and social welfare for individuals in the organised workforce creates concerns about unequal access and inadequate protections offered to others. This disparate state of affairs, therefore, points to the need to discuss the challenges inherent in India’s pensions framework.

Given the imperative for reform, the present report analyses the regulatory framework governing some of India’s largest pension schemes. While in a previous report, we have discussed in detail, issues plaguing some of the flagship pension schemes meant for India’s informal sector workforce, the present report takes this discussion forward.  Looking at best practices across selected jurisdictions and a critical analysis of some of the issues inherent in India’s existing pensions framework, we make a case for a comprehensive harmonisation of India’s fragmented pensions regulatory framework.

Therefore, we urge that all existing and new pension programmes should be guided by similar regulatory principles. Based on our analysis, we set out certain recommendations for reform, both long-term and short-term. We hope that this report will initiate a conversation in this regard and set the stage for reforms which would assist in making India’s existing pensions framework harmonised, accessible, and transparent, providing sustainable, and equitable retiral incomes for all citizens.

Click here to download the full report -‘Examining the regulatory framework for pensions in India: Making a case for harmonisation’.

About Debanshu Mukherjee:

Debanshu is part of the founding team at Vidhi and leads its Corporate Law and Financial Regulation vertical. He graduated from the Hidayatullah National Law University and completed his graduate studies at Harvard University and the University of Oxford. He attended Harvard Law School as a Fulbright- Nehru Fellow where he was awarded the Irving Oberman Memorial Writing Prize in Bankruptcy and the Dean's Scholar Prize in Corporations. He has advised the Ministry of Finance, the Ministry of Corporate Affairs, the RBI and the IBBI on projects relating to bankruptcy, corporate law, and financial regulation. He was previously a lawyer with AZB & Partners. Link to full bio

About Ulka Bhattacharyya:

Ulka is a Research Fellow in the Corporate Law and Financial Regulation vertical. She is presently working on the implementation of the personal insolvency aspects of the Insolvency and Bankruptcy Code, 2016 and allied issues. Prior to joining Vidhi, she worked with the Litigation and Dispute Resolution Practice at the Calcutta offices of Khaitan & Co, a leading Indian Law Firm, in the course of which she worked on diverse commercial disputes, and appeared before various fora including the High Court at Calcutta. Ulka graduated in 2016 with a B.A. LL.B. (Hons.) degree from the West Bengal National University of Juridical Sciences, Kolkata, at the top of her class. Her academic interests broadly lie in the field of financial regulation, law and finance, and the law and economics of financial regulation.

About Shohini Sengupta: