The Pension Fund Regulatory and Development Authority (PFRDA) has said that informal employees who are registered on the e-Shram database will soon be able to open pension accounts easily by using just a few taps on their mobile phones.
The proposed plan aims at strengthening the retirement security of informal workers by having them regularly contribute to a pension plan.
Opening pension accounts through simple process on phones
PFRDA is making it easier for the informal workforce to sign up for pension plans by enabling a quick and seamless enrollment process through the eShram portal, developed by the Ministry of Labour and Employment.
Once the account is opened, employees can contribute amounts to their pension using UPI. The service will be available in several Indian languages to make pension products easier to understand and access, PFRDA chairperson Sivasubramanian Ramann has said.
Ramann has said the pension regulator is working on a simplified digital process by using data already available on the government’s e-Shram database which contains many of the fields required to open a pension account.
PFRDA has already launched NPS Tatkal which operates through UPI providers as part of efforts to create a more accessible pension system for workers.
How will it benefit workers?
The PFRDA initiative makes savings for retirement easier for informal workers by letting them sign up directly on their mobile phones without the need to visit a physical office. It gives unorganised and informal workers effortless access to pension accounts and faster pension account creation. This gives convenience to workers with irregular employment and no employer-linked retirement benefits.
Guaranteed-return pension product
The pension regulator is developing a guaranteed-return pension product for the non-government sector as mandated under its Act.
NPS Swasthya to be launched
Ramann also announced that PFRDA will soon launch NPS Swasthya, a facility that will allow subscribers to use a portion of their accumulated pension to pay for hospital fees. Ramann added that the top-up insurance could be roughly eight to ten times the initial contribution.
NPS Swasthya combines long-term retirement planning with healthcare flexibility by providing subscribers with access to liquidity for medical needs while enabling them to build a safe retirement corpus with market growth. The product is likely to be rolled out soon.
Exploring innovative bond issuances
On the investment side, Ramann said pension funds can already use equity and interest-rate derivatives to protect their current investment from sudden losses. The regulator is now exploring innovative bond issuances that guard savings against rising living costs, ensuring guaranteed pension don’t lose value to inflation.
