At a time when personal savings, unlike in the past, fetch insubstantial returns, the current generation of employees is concerned over its post-retirement existence. There are also added features to modern-day life, with changing demographic structure, enhanced longevity, etc. Pension payout is becoming an ever-growing burden on the exchequer, and might become excessive, as has happened in Brazil. In India’s case, this is occurring at a time when almost 110 million people of retirement-age are not covered by any old-age security scheme at all. Former central and state government employees drawing pensions would number around 10 million, while a further 4 million former defence personnel, too, would be on pensions. Former PSU employees and private sector employees drawing pension benefits from EPFO would number 5 million.

Former bank employees and of private companies like Maruti drawing from other pension funds, beneficiaries of general old-age security schemes (like those launched by state governments) and beneficiaries of various other government-run social welfare schemes would add up to another 4.5 million. Former legislators, Parliamentarians and UN personnel may total a lakh at the most. In all, less that 25 million people in a country of 1.3 billion get pensions—that too in a scenario where employment in the organized sector is minuscule. In spite of such measly coverage of old-age security, the Centre has realized the problem of payment of pensions to its former employees even as it is keen on extending the cover of old-age security to a greater chunk of the citizenry.

Read full content here: Financial Express