Will We Disprove Yes Minister With Pension Reforms?

In Yes Minister, a TV satire on British politics, Sir Humphrey often stymied urgent reforms by setting up ‘interdepartmental committees.’

- Amit Gopal

These are designed to create ‘creative inertia’ and ‘plausible denial,’ said he. The recently set up Forum for Regulatory Coordination and Development of Pension Products has the potential to prove Sir Humphrey wrong.

A little background first. Indian pension programmes are regulated by the Employees’ Provident Fund Organisation, or EPFO, and the Pension Fund Regulatory and Development Authority, or PFRDA. The EPFO’s schemes (Provident Fund, Employees’ Pension Scheme and Employees Deposit Linked Insurance Scheme) deliver a mix of lumpsum, pension and insurance while the PFRDA’s scheme (National Pension System) delivers a lumpsum and a pension. These apart, there are pension plans outside the above arrangements—defence, railways, coal-miner pension, sections of the banking industry, superannuation and gratuity trusts, and excluded provident funds. Recent entrants are gig and platform worker social security arrangements. Most of these programmes work at the intersection of multiple regulators.

A vast labour force with a vibrant capital market and superstructure of technology provides an ideal base for a pension market where individuals and employers can make choices of pension products that address their needs. Sadly, this remains a dream. Instead, flaws persist.