ABSTRACT
India reformed its public sector pension system in 2004, shifting from unfunded defined benefit Old Pension Scheme (OPS) to defined contribution-based National Pension System (NPS). In response to retirement income adequacy concerns, the government introduced the Unified Pension Scheme (UPS) in 2025, combining defined benefit guarantees with contributory financing. This paper uses a cohort-based actuarial framework to assess pension adequacy and burden-sharing under the two contributory regimes and compares outcomes against the OPS’s benchmark 50% replacement rate. At retirement age 60, NPS exceeds the benchmark for employees entering at age 23 or younger at 3% yield, and age 31 at 4% scenario. Adequacy improves further at higher retirement ages. UPS can provide the promised benchmark at yields around 3%. However, actuarial fairness varies across entry ages: early entrants generate surpluses that cross-subsidize late entrants, who require contributions exceeding the combined statutory rate of 28.5%.