From E-Shram to Retirement: How PFRDA Plans To Pension India’s 400 Million Unorganised Workers

Millions of workers in India's unorganised sector may soon be able to open retirement savings accounts directly on their smartphones and make micro-contributions through the Unified Payments Interface, under a new initiative being developed by the Pension Fund Regulatory and Development Authority. The plan aims to remove traditional documentation barriers for workers who lack regular salary slips or formal income tax records. PFRDA Chairperson Sivasubramanian Ramann said the regulator is working on a simplified onboarding process that leverages existing government records to cut down procedural friction for this segment.

e-Shram Database To Power Instant Onboarding

Central to the rollout is the government's e-Shram portal, a national registry of unorganised workers that already holds verified identity and occupational details, LiveMint. Instead of requiring fresh documentation and physical verification, PFRDA plans to use this existing repository to let workers generate pension accounts in a few taps. "We are looking at how people, who are already registered on the database, can be enabled to open pension accounts through a simple, few-click process on their mobile phones," Ramann said. The mobile interface will be offered in multiple Indian languages to widen accessibility. Pension Reform: PFRDA Allows Banks To Set Up Pension Funds To Promote Sustainable Growth of NPS.

UPI To Enable Flexible, Irregular Contributions

Rigid monthly contribution schedules have long been a barrier for informal workers whose earnings fluctuate daily or weekly. The new system will let subscribers deposit variable amounts via UPI whenever surplus cash is available, building on PFRDA's recently launched NPS Tatkal service, which already uses digital payment aggregators to speed up deposits. Who Gets OPS Now? Government Revises Pension Rules for Compassionate Appointments.

Guaranteed-Return Scheme And Health Buffer In The Works

PFRDA is also developing a guaranteed-return pension plan for non-government subscribers, a statutory requirement under the PFRDA Act, with an expert committee evaluating viable product structures. Unlike the Unified Pension Scheme for government employees, non-government pension products carry no built-in fiscal backstop, leaving regulators to work out how such capital guarantees would be funded. The authority is examining hedging tools, including interest-rate derivatives and inflation-indexed bond structures, to manage yield volatility while protecting real returns.

Separately, the regulator is finalising rules for NPS Swasthya, a hybrid facility letting subscribers withdraw part of their pension balance for hospitalisation costs, paired with a top-up insurance policy offering coverage roughly eight to ten times the contribution amount. After pilots with two pension fund managers, the framework is expected to be opened to all licensed managers in partnership with general insurers.

Pension Fund Managers Rise To 14

PFRDA has expanded its institutional network to support the expected surge in subscribers, with the number of licensed pension funds rising from 10 to 14. Bank of Baroda has also received in-principle approval to set up a pension fund subsidiary and begin operations, marking a fresh entry into the public sector space.

Together, the mobile-first onboarding push and the healthcare liquidity option mark a shift in how PFRDA is positioning formal pensions, from a paperwork-heavy process into a daily micro-savings habit for India's roughly 400-million-strong informal workforce.

(The above story first appeared on LatestLY on Sep 13, 2026 10:57 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).