What To Know About Universal Pension Scheme?

Alankar Mishra

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Updated: 16-04-2025 at 12:47 PM

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The Universal Pension Scheme is an attempt by the Indian government to ensure social security for all, especially people working in the unorganised sectors. Compared to other employment-specific pension plans, this self-centred initiative hopes to reduce the complexity of the different pension plans available by consolidating them into an easy-to-use system. This is a step in the financial preparedness for India’s increasingly aged citizens.

Overview

Feature	Details
Scheme Name	Universal Pension Scheme
Purpose	To provide voluntary retirement benefits to all individuals, beyond job-based pension plans.
Eligibility	Open to all individuals aged 18 and above, especially unorganised workers, traders, and self-employed individuals.
Voluntary Contribution	Participants contribute monthly towards their pension, with government co-contributions in some cases.
Proposed Monthly Pension	₹3,000 or more post-60 years, depending on contributions.
Merging of Existing Schemes	May integrate PM-SYM, NPS-Traders, and Atal Pension Yojana under a single system.
Implementation Body	Labour Ministry, with discussions on stakeholder involvement.
Funding Sources	Contributions from individuals and funds from schemes like the Building and Other Construction Workers (BoCW) Act.
Expected Launch	Under discussion, pending framework finalisation.

Why Is The Universal Pension Scheme Needed?

The Universal Pension Scheme will play a significant role in providing a financial cushion for India’s rapidly increasing aged population. With the increased life span and minimal retirement benefits, there is an urgent need for robust social security. Some reasons are highlighted below:

Boosting the Elderly Population: The elderly (60+) population in India is estimated to reach 227 million by 2036. Therefore, there is an enormous need for climbing social security.

Absence of Social Security Coverage: Unlike developed superpowers, India’s pension scheme is employment-based. So, workers in the unorganised sectors don’t benefit from the pension plan.

Coverage of Other Existing Pension Schemes: This new scheme intends to streamline several such existing pension schemes including:

Pradhan Mantri-Shram Yogi Maandhan (PM-SYM): Enrolment contributions yield a monthly pension of ₹3000.
National Pension Scheme For Traders And Self-Employed (NPS-Traders): Covers small traders and self-employed workers.
Atal Pension Yojana (APY): Economically weaker section pension scheme.

Universal Financial Freedom: Enables self-employed individuals, as well as everyone, irrespective of job status to plan for retirement through voluntary contributions.

Conclusion

If implemented, the Universal Pension Scheme has the potential to transform the entire perspective of pensions in India. The scheme, especially aims to benefit senior citizens belonging to the unorganised sectors of society. The initiative seeks to merge several existing pension schemes which will enable easy access, and active participation, and offer a more stable income during the retirement years to millions.

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