There are however three major pillars to the Indian pension system: the solidarity social assistance called the National Social Assistance Programme (NSAP) for the elderly poor, the civil servants pension (now open for all) and the mandatory defined contribution pension programs run by the Employees' Provident Fund Organisation of India for private sector employees and employees of state owned companies, and several voluntary plans.
It was a defined benefit system that the employees did not contribute to and the pension was funded through the general state budget.
At the official age of retirement, the employee can withdraw 60% of the amount as a lump sum while 40% needs to be compulsorily used to buy annuity that will be used to pay a monthly pension.
In the General Provident Fund Scheme, the employee needs to contribute at least 6% of his gross salary and there is a guaranteed return of 8%.
In case of death or permanent disability during work, the dependent gets a monthly pension throughout their life.
[5] Government of India launched Pradhan Mantri Shram Yogi Maan-Dhan (PMSYM) in February 2019 to provide an assured pension of ₹3,000 (US$35) per month to unorganised workers.