The Insurance Regulatory and Development Authority recently submitted a report to the government recommending pension reforms in the unorganised sector.
Minister of State for Finance Anandrao V Adsul on Thursday told the Rajya Sabha that the new pension system announced in this year's Budget would offer a basket of policies.
The system envisages voluntary participation on a defined-contribution basis that will be portable, allowing transfer of benefits in case of change of employment.
The minister said there will be no contribution from the government in respect of non-government employees or individuals.
Besides, government also announced 'Varishtha Pension Bima Yojana' through which a pensioner, or any citizen above 55 years of age, could get payment of a lump sum amount calculated at 9 per cent per annum, he said.
The system ensures an organisation which will interface with the contributors and regulator.
The system also plans for a compulsory annualisation of a certain threshold level beyond which withdrawal or commutations of the accumulated corpus for certain specified reasons would be permitted.
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