The Government has clearly moved away from its earlier philosophy of only encouraging defined contribution-based pension schemes. Allowing minimum assured return/guarantee-based schemes in the pension sector is a complete U-turn for a reform-oriented Government.
The latest move is being seen as a back-door entry for defined benefit — a philosophy that the Government had shunned in 2003 while embracing defined contribution as its core strategy for providing income security to Indians post retirement. A primary reason for moving away from defined benefit is the Government’s inability to take on the huge liability flowing from such an approach.
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