According to the proposed framework, the retirement savings system will continue to function like the existing Provident Fund during a worker's active employment years, allowing contributions to accumulate over time. A key operational milestone is planned at the age of 55, when members will be given the opportunity to determine how they want to use their retirement savings. An official stated that until the age of 55, the account will operate like a Provident Fund with continuous accumulation of savings. Upon retirement, the accumulated corpus can then be converted into either an annuity or a systematic withdrawal plan, depending on the member's choice.
Another significant milestone is proposed at the age of 60. According to another official, the Target Retirement Sum will be converted into a pension based on prevailing annuity and interest rates. The system will dynamically calculate the Target Retirement Sum by considering each member's selected pension objective and expected retirement age. Members will also receive personalized digital dashboards displaying their total contributions, real-time retirement corpus, and progress toward achieving their Target Retirement Sum under applicable schemes.
The proposed reforms are intended to modernize the Employees' Provident Fund Organisation by introducing a core banking solution, enabling greater transparency, enhanced digital services, and more personalized retirement planning. The initiative seeks to create a more flexible and efficient retirement savings framework while improving long-term social security for workers.
The proposed pension reforms come as the government continues to expand India's social protection network. Union Minister for Labour and Employment Mansukh Mandaviya, while inaugurating the 15th BRICS Trade Union Forum Summit 2026, called for the creation of a worker-centric global order in which technological advancement is guided by social justice, responsible innovation, and human dignity.
During the summit, Mandaviya highlighted the significant expansion of India's social protection coverage, stating that it had increased from 19 per cent in 2015 to 64.3 per cent of the country's total population in 2025. According to the minister, the expanded coverage now extends to nearly 940 million people, reinforcing the government's efforts to strengthen welfare measures and retirement security across the workforce.
The proposed Target Retirement Sum under the EPFO 3.0 reforms represents a significant step toward reshaping India's retirement ecosystem by combining digital modernization, personalized pension planning, and enhanced financial security. If implemented, the initiative is expected to provide workers with greater flexibility in retirement planning while strengthening the country's long-term social protection framework.
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