Examining the Regulatory Framework for Pensions in India
An analysis of the regulatory framework governing some of India’s largest pension schemes.
Summary: The Report critically examines issues present in the current regulatory framework for pensions and makes a case for its harmonization based on an evaluation of best practices across selected jurisdictions.
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.
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About the Authors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Ulka was a Research Fellow at the Vidhi Centre for Legal Policy.
