Government's New Initiative for Pension Regulation

Mumbai: In a significant move to streamline the pension system, the government has announced the establishment of a forum aimed at regulatory coordination and the development of pension products. This initiative focuses on ensuring the adequacy and sustainability of post-retirement income, alongside introducing tax breaks for pension investments made on behalf of children.

Sriram Iyer, CEO of HDFC Pension, expressed optimism about the initiative, highlighting the current confusion among clients due to the multiplicity of pension products with disparate benefit structures and tax treatments. The new forum is expected to harmonize these products, making them more client-centric.

Budget 2025 Highlights

The Budget 2025 has introduced several updates, including changes to income tax slabs and significant tax benefits for the middle class. These changes aim to simplify the tax regime and provide relief to salaried taxpayers.

Furthermore, the inclusion of NPS Vatsalya as an eligible investment under 80CCD(1B) in the old tax regime is seen as a positive step. This move is expected to accelerate its adoption and kick-start the journey of building a long-term corpus for children.

Global Perspective on Pension Systems

According to the 2024 Mercer Global Pension Index, India ranks at the bottom among 48 countries, with a score of just 44. The index evaluates pension systems based on adequacy, sustainability, and integrity, highlighting the need for reforms in India's pension system to improve its global standing.