Bringing the unorganised sector -- which accounts for 85 per cent of the country’s labour force -- under the ambit of pension to provide them income security is the most challenging task, the Pension Fund Regulatory and Development Authority (PFDRA) said on Wednesday.
“Pension schemes offered must, therefore, be well-regulated and supported by the government as this segment lacks awareness about pensionary benefits,” chairman of PFRDA, Hemant G Contractor, said.
Contractor was speaking at a conference here on “India: Moving Towards a Pensioned Society”, organised by industry body Federation of Indian Chambers of Commerce and Industry (Ficci).
“Given the heterogeneous nature of the unorganised sector and the labour force, which is constantly on the move in search of work, it is necessary to provide a pension system with portability. Also, it is essential to raise the financial literacy of the people to encourage them to join pension schemes,” he said.
Contractor said that India’s organised sector, which comprises 15 per cent of the working population, was well covered under varied pension schemes.
However, he pointed out that because of instances in the past of people being cheated by ponzi schemes, there was lack of trust and confidence, which was keeping some of the organised sector workers away from pension schemes.
Hence, it was essential to bring about awareness about pension schemes and make the policies transparent and easy to manage, he said.
On the occasion, the PFRDA chief released the Ficci-KPMG White Paper “Employee pensions in India - Moving towards a pensioned society”.