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Implementing Pension Reforms (ADB
TA:4938-IND), August 2010
In October 2008, the Asian Development Bank
(ADB) launched a TA project with the
Ministry of Finance, Government of India.
This TA was aimed at (a) developing a
national implementation strategy
for NPS that will achieve broad-based
voluntary coverage among informal
sector workers across geographical, income
and occupational segments, and
(b) developing an effective and uniform
regulatory environment for nongovernment
provident and pension funds, superannuation
and gratuity schemes. AECOM (Washington) and
Invest India Economic Foundation (IIEF) were
contracted to implement this TA. A team of
three global pension system experts from
AECOM, along with six domestic pension
sector experts from IIEF worked on this 18
month TA.
Under this TA, and in consultation with the
Ministry of Finance, the ADB consulting team
focussed NPS related activities at Hamirpur (a
rural district in Himachal Pradesh) and
Mangalore (an urban district at Karnataka).
In both districts, the ADB consultants
conducted baseline surveys to assess the
latent demand for NPS. This was followed by
an extensive review of NPS operations, sales
efforts and voluntary coverage outcomes in
order to provide direct feedback to the
Government and PFRDA on the ability of the
present NPS institutional architecture,
products, operations, communication and
promotional strategies to achieve
broad based voluntary coverage among a
heterogeneous mix of unorganized
sector workers. The team helped identify
challenges and gaps in the present strategy
and applied a number of interventions in the
two pilot districts to increase voluntary
participation among the NPS target groups.
Field interventions and outcomes were
analysed by the consulting team at each
district to inform recommendations for a
national level implementation strategy
for the voluntary NPS.
In parallel, the consultants conducted a
comprehensive study to map existing
legislative, regulatory and legal provisions
under which legislated employee benefit
programs as well as nongovernment pension
and provident fund trusts (including exempt
and excluded PFs), superannuation schemes
and gratuity funds presently operate.
The
study was supported by a range of interviews
with key stakeholders and formed the basis
of the core recommendations for a uniform
legislative and regulatory framework for
unregulated employee benefit provisions
along with an implementation roadmap.
The Draft Final Report including preliminary
findings and draft recommendations from this
TA have been submitted to the Ministry of
Finance & ADB. The stakeholder roundtable
and workshops discussed the draft
recommendations with a cross-section of key
stakeholders.
Feedback and ideas that emerged from these
meetings will be factored into the final
report to be submitted to the Ministry of
Finance and ADB.
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