Implementing an Inclusive and Equitable Pension Reform: Lessons from India's New Pension Scheme

Publication | May 2012

This book proposes significant legal, regulatory, and governance reforms for India's New Pension Scheme and other existing pension schemes, as well.

India is aging. One response of Indian policy makers has been introduction of the New Pension Scheme (NPS), a defined contribution pension scheme which is mandatory for civil servants and voluntary for the rest of the population. Given the size of the target population, even if take-up is modest, NPS savings may soon provide huge amounts of capital to India's economy. However, challenges are abound. What governance structure will best achieve the ultimate policy goal of serving the needs of savers? What business processes and information technology design will serve members best? How effectively will the NPS attack the problem of old-age poverty?

In this book, a multi-disciplinary international team, comprising of economists, lawyers, pension management experts, and capital market experts, explore these and other questions. The book proposes significant legal, regulatory, and governance reforms for the NPS and other existing pension schemes, as well. It finds that current NPS business practices cannot keep pace with potential growth of the system and makes suggestions on how to take better advantage of information technology. Based on review of experience elsewhere and state-of-the-art economic-demographic modelling, it warns that the NPS in its current form does not address the retirement income needs of the lifelong very poor, suggesting that it is only one in a range of responses needed to cope with the challenges of population aging in India.

About the authors

Cheolsu Kim, an economist, is currently lead financial sector specialist, South Asia Department at the Asian Development Bank.

Landis MacKellar is an economist specializing in economic demography and the economics of the social sector.

Russell G. Galer is an attorney and consultant specializing in pension and savings policy and related legal and regulatory issues, including the regulation of financial institutions and services.

Gautam Bhardwaj is director of Invest India Economic Foundation.


  • Introduction, Demographic and Economic Context
  • The Pension System Reform
  • NPS Communications, Marketing and Business Practices
  • The Economics and Demography of the NPS
  • Occupational Pension Schemes in India
  • Towards an Integrated Policy

Additional Details

  • Economics
  • Social development and protection
  • Social protection - social insurance programs
  • India
  • 278
  • 6 x 9
  • 978-0-415-52220-5 (print)
  • 978-0-203-12103-0 (electronic)

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