Before introduction of National pension scheme, social security was restricted only to the handful of the people in the society. Traditional approach to social security was to provide social insurance only to the employees in the formal and organised sector. This restrictive approach has harmed the growth of the pension industry in India where majority of the workers are working in the unorganised and informal sectors. Not only the share of employees in the unorganised sector has increased over a period of years but at the same time informal workers in the formal sectors are on rise. This led to emergence of the single pension system which will cater to the needs of the workers in both formal and informal sector. Design and implementation of the social security system in such diverse and complex economy has to face many challenges. new pension scheme to succeed, it has to compete with other financial products available to the individuals in the form of saving and investment opportunities in the Indian financial system. It is also in direct competition with the various financial products provided by the employers in the organised sector. It includes financial products managed by government agencies like public provident funds, post office monthly income scheme or national saving certificate, etc. Since, these financial products have backing of the Government, it is preferred by the individuals for retirement saving. Also, there are lot retail products offered by the private pension funds, insurance companies and deposit products offered by banks. However, the existing system do not have any significant impact on the pension fund markets.