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Newsmakers

India’s National Pension Scheme Raises Entry Age Limit to 65

Currently, only 15% to16% of workers are covered by system.

By Chris Butera

The upper age limit for a retiree to join India’s National Pension Scheme (NPS)— has been increased by five years to age 65, the Pension Fund Regulatory and Development Authority (PFRDA) announced Monday.

Confirmed by PFRDA chairman Hemant Contractor at a conference regarding “Transferring Superannuation Funds to National Pension System,” the change is intended to “open up pensions to sectors that are without pensions.” Currently, 85% of employees in India are working in the unorganized and informal sectors, and only 15% to 16% are covered by the NPS, which he added is currently the “lowest-cost pension product in the world.”

“NPS is currently open for people between 18 and 60, and our Board has approved raising the age limit for joining to 65,” Contractor said. “The scheme anyway has the option of continuing and making contributions up to the age of 70.”

The NPS offers members choices ranging from equity and secure government bonds to life-cycle funds, with equity investments able to go up to 75% of their contribution should they select the life-cycle fund. It also offers safer options with a large chunk of fixed-income investment.

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Home > News > Newsmakers > Brazilian Planning Minister Demands Government Put Pension Reform First
Newsmakers

Brazilian Planning Minister Demands Government Put Pension Reform First

Corruption scandal, 2018 general elections causing distractions for lawmakers.

By Chris Butera

According to Brazil Planning Minister Dyogo Oliviera, the government needs to focus on changing laws for its ailing pension in Congress instead of on a tax reform that is not gaining the political backing lawmakers had hoped for.

“There are no conditions to push two reforms of this magnitude through Congress at the same time,” he told journalists following a Sao Paulo event on Monday. “The first reform that we need is the pension reform.”

Brazil’s government has had a troubled time trying to agree on a solution to the country’s pension system due to the upcoming 2018 general elections and an ongoing corruption scandal involving current President Michel Temer and two former presidents, Luiz Inácio Lula da Silva (Lula), and his successor, Dilma Rousseff, distracting lawmakers.

While economists agree that pension reform is essential to dodging an eventual public debt crisis, unions are against proposals, calling for a minimum retirement age as well as benefit reductions.

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In addition, the government has yet to present its tax proposal—a priority of President Temer. A separate bill presented by Congressman Luiz Carlos Hauly, which looks to simplify the country’s tax system, has been analyzed by legislators.

According to Oliviera, the government has asked BNDES—the world’s third-largest state development bank—to return $50 billion reais ($16.2 billion) to the Treasury this year as well as 130 billion reais in 2018. Oliviera also noted that BNDES will have to change its business model to depend on market resources rather than government funds.

The minister also mentioned how, after approving a looser budget target in Congress, the government was attempting to unfreeze between 8 billion and 10 billion reais in public spending later this month, saying the approximate number had yet to be confirmed. He also said Brazil will face a slow recovery from a large recession and that it will probably take 10 to 12 years to return to 2014 numbers.

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