States » SouthPosted at: Oct 24 2026 4:19PM


PFRDA admits failure to focus on informal workers, steps up pension outreach

Bengaluru, Oct 24 (UNI) The Pension Fund Regulatory and Development Authority (PFRDA) has acknowledged that it failed to give adequate attention to India's vast informal workforce and self-employed population, and is now stepping up efforts to bring these sections under the National Pension System (NPS).
PFRDA Chairperson S. Ramann said the regulator had traditionally focused more on corporate employees, leaving a large segment of workers outside the employer-employee framework without sufficient outreach on pension savings.
"This is an area which we have only now taken up. It is, in fact, our failure not to have given enough importance to this segment, which is a very large segment in India," Ramann said during a media interaction here.
He noted that the informal sector was not confined to low-income earners but also included high-income self-employed professionals and others who did not have access to employer-linked retirement savings arrangements.
The regulator was launching awareness campaigns and deploying teams to educate these groups about NPS and its benefits, he said, stressing that the effort would require the participation of distributors, the media and other outreach networks.
As part of the expansion strategy, PFRDA is banking on digital platforms such as Star NPS and Tatkal NPS to simplify enrolment and widen access to pension products. The platforms are designed to combine assisted onboarding through pension agents with a more direct digital process for subscribers familiar with UPI-based transactions.
Ramann said PFRDA expected Tatkal NPS to generate higher enrolment volumes because of the widespread familiarity with digital payments. Star NPS, which requires pension agents to provide greater assistance to prospective subscribers, could take longer to gain traction.
To encourage distribution, the regulator is offering pension agents an incentive of Rs 200 for Star NPS transactions and Rs 100 for Tatkal NPS, with the differential reflecting the additional effort required under the assisted model.
The platforms could also enable mutual fund distributors and other eligible individuals to extend pension services to existing customers without significant additional infrastructure expenditure, he said.
PFRDA is looking at a potential universe of 60 crore working people using UPI to expand pension coverage. However, Ramann cautioned that this was a long-term ambition rather than an immediate enrolment target, adding that reaching the figure could take until 2045.
The regulator would focus on increasing enrolments progressively through awareness campaigns, wider distribution networks and incentives, he said.
Acknowledging the challenge of protecting first-time subscribers from unsuitable products and misleading advice, Ramann said PFRDA had introduced Pension Sahayak, an automated, AI-enabled grievance redressal system that uses machine learning to respond to subscriber queries and complaints.
The system would help the regulator monitor grievances more closely and identify possible instances of mis-selling across the country, enabling timely intervention when subscribers were adversely affected.
He said digital interfaces would increasingly display the relative risk levels of pension schemes to help customers make informed investment decisions rather than rely exclusively on distributors.
On cybersecurity, Ramann said the Central Recordkeeping Agencies (CRAs), which form the digital backbone of the pension system, were under close regulatory supervision. PFRDA was also working with the Ministry of Electronics and Information Technology to bring the CRAs within the framework applicable to critical information infrastructure.
He acknowledged that cybersecurity remained an ongoing concern requiring adequate safeguards, particularly as pension services increasingly moved to digital platforms.
Turning to the Atal Pension Yojana (APY), Ramann said actuarial studies and modelling exercises were under way to examine its underlying asset allocation, with a view to strengthening inflation protection for subscribers.
He said PFRDA wanted more eligible subscribers to opt for the maximum guaranteed pension slab of Rs 5,000 a month, while improving the investment framework to help preserve the purchasing power of retirement income.
On NPS investment performance, Ramann cautioned against judging the scheme on short-term equity market movements, saying subscribers should ideally assess returns over longer periods, particularly five, seven and 10 years.
He also advised subscribers approaching retirement to consider life-cycle funds, which automatically reduce equity exposure as they grow older, helping manage market volatility closer to retirement.
PFRDA was also working to make corporate enrolment smoother through digital mechanisms that would allow employees to associate themselves with their employers for NPS participation.
Providing an update on Tatkal NPS, Ramann said around 12 to 13 banks had been integrated with the platform, of which approximately six or seven had gone live.
The regulator's broader challenge, he said, was to translate digital access into sustained pension participation among workers who have traditionally remained outside formal retirement savings systems.
UNI BDN
Tags: #PFRDA admits failure to focus on informal workers# steps up pension outreach
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