Why in News? 

Pensioners Day is observed on December 17th to honor D.S. Nakara, who fought for pension rights of retirees. 

History of Pension System 

• The Indian pension system began in 1881 with the Royal Commission on Civil Establishments. 
• In 1972, the Central Civil Services (Pension) Rules guaranteed pension benefits, offering 50% of the last salary after 33 years of service. 

Supreme Court Judgment 

• D.S. Nakara’s 1982 case led to a landmark Supreme Court ruling, declaring pension discrimination based on the retirement date as unjust. This judgment expanded pension benefits to all retired government employees. 

Pension System Developments 

• In 2004, the NDA government introduced a participatory pension scheme. 
• The Pension Fund Regulatory and Development Authority (PFRDA) was formed in 2013 to regulate pension schemes. 
• In August 2024, a Unified Pension Scheme (UPS) was approved to streamline the pension process. 

Key Features of Pension Plans 

• Tax Efficiency: Plans like NPS and APY offer tax benefits under Sections 80C and 80CCD. 
• Liquidity: Some plans allow early withdrawals. 
• Vesting Age: Pension payments begin typically from 45-50 years. 
• Accumulation Duration: Contributions can be made periodically or as a lump sum. 
• Payment Period: The duration over which the pension is received. 
• Surrender Value: If a plan is surrendered before maturity, benefits are forfeited. 

Conclusion 

Pensioners Day highlights the progress made in securing pension rights and the ongoing challenges faced by pension systems in India.