All Things Policy Inside India's Pension System
Nov 27, 2025
Sriram Iyer, Managing Director and CEO of a major pension fund management firm with nearly 30 years in finance, joins in to discuss pensions as a public policy challenge. He explains the shift from defined benefits to the National Pension System, assessing its reach and effectiveness. Iyer highlights recent reforms that enhance equity options and simplify access for users. With India facing demographic shifts, he shares insights on managing equity risks and the importance of behavioral nudges to improve pension adoption.
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Why NPS Replaced The Old System
- The old defined-benefit government pension was generous but unsustainable and risked pauperising the state budget.
- The National Pension System (NPS) replaced it with a defined-contribution model starting Jan 2004 to ensure fiscal sustainability.
NPS Worked For Government, Not Yet For All
- NPS succeeded for government employees but adoption in the non‑government sector remains low with only ~7.2 million accounts.
- Large informal and formal workforces remain uncovered, so coverage is the system's main shortfall.
Leverage The Unbundled NPS Architecture
- Use the unbundled NPS architecture: regulator, PFMs, POPs, CRAs, trustees and annuity providers each play specialist roles.
- Coordinate these entities to improve governance, recordkeeping and distribution reach.