Social Protection Brief: Supporting Pension Reforms in India

In 2004, the government took the first steps toward establishing a self-sustaining and broad-based pension system for India. This new system is a defined-contribution, individual accounts-based pension program mandatory for civil servants.

Key points

• Pension reform was driven by the need to establish a self-sustaining broad-based pension system to mitigate the Government of India’s unfunded pension liabilities under the defined benefit system.
• The technical assistance (TA) projects of the Asian Development Bank (ADB) supported selected states in the measurement and reform of civil service pensions. The projects were implemented through stakeholder consultations to raise awareness and encourage mass workers’ voluntary participation in the new pension system, capacity building, and field testing new products.
• The new National Pension System (NPS) also extended social protection coverage to all Indian citizens, including informal sector workers who were previously not covered.