Centre Awaits Irda Report On Pension Authority

The Centre, which is planning to set up a national pension authority, is awaiting the Insurance Regulatory and Development Authority (Irda) report on the matter.

The Irda had been assigned the task of drafting pension reforms by the Union finance minister in the last Budget address.

"The report is yet to be written and the authority is in the process of being set up," said N Rangachary, Irda chairman, at a seminar on pension reforms organised by the Darashaw & Co and the Indian Merchants' Chamber.

"We propose to suggest the third pillar of the World Bank scheme where there is no employer-employee interface and the entire system is voluntary," he said.

In designing the new pension reforms system, the Irda intends to see that it is able to incorporate, if desired, both the existing employees provident fund (EPF) system and the central government pension scheme.

Rangachary said this would be advantageous in enlarging critical mass. It could help keep costs of administration low and enhance returns. Irda is still looking at introducing the concept of pension bonds. This will solve the basic problem of administration costs.

Meanwhile, the EPF organisation proposes to introduce national unique numbers to all employees, said Ajai Singh, the central provident commissioner.

The project will be rolled out in the next two to three months and will be replicated across the country in five years.

"This will be the beginning of a social security system as prevalent in the US," he said, adding that the organisation will first target all organisations having more than 5,000 employees.