Pension watchdog eyes APY to boost NPS corpus by Rs 50K cr | Business Standard News

Pension watchdog eyes APY to boost NPS corpus by Rs 50K cr | Business Standard News My VIEW: Ideally, social security efforts should have ‘Pension for all’ as a long term objective. The decade old NPS which has recently earned legislative legitimacy, is yet to make any serious plans or projects for such an inclusive pension scheme. Instead, PFRDA has been consistently dismantling existing pension schemes, encroaching into fairly well managed funds like that maintained by EPFO and now there is a move to drag LIC to implement a scheme (yes, Atal Pension Yojana) which may net in millions, but unlikely to be beneficial to the subscribers in the long run. One test for Atal Pension Yojana which is being marketed with Bachan advertisements would be the present worth of the promised pension amount of Rs 5000 for those joining at ages 25, 35 and 45 discounted at the present rate of inflation. The growth of NPS Corpus by Rs 25,000 cr should be seen in the background of the captive clientele created by discontinuing regular defined benefit pension schemes in the organised sector. Ten years down the line, NPS is yet in search of substantial contribution from ‘open market’. Facing the future The 2003 New Pension Scheme was imposed on the ‘future’ employees of the government and other organisations which had well-designed Defined Benefit Pension Schemes and later offered to the public with paltry government subsidy for external considerations and pressure from certain vested interests. Long after, in 2006-07, though for totally different reasons, ING Group and Indian Institute of Management, Bangalore undertook a joint research on pension systems in India at the instance of ING Global Retirement Services. The findings are available in the form of a 588 page book “Facing the Future: Indian Pension Systems”(By David J. W. Hatton, Naren N. Joshi, Fang Li, R. Vaidyanathan, S. Jyothilakshmi, Shubhabrata Das and Sankarshan Basu. Publisher: Tata McGraw Hill Rs625). One wishes, Government of India and PFRDA revisits the analysis contained in this book which has gone into the evolution of new pension systems in several countries in the world and the relevance of those experiences in the Indian context. Facing the Future claims to “analyse the results of extensive market surveys, draws from the experience of industry experts and studies the different pension systems around the world. The book encourages thinking on the pension issues which will lead to a viable solution to India’s problems.” Twelve years after the introduction of NPS, these observations may look a little unconvicing or odd. But the lingering feeling that a well-established social security system is being discontinued without any reasonable substitution makes one flag the incompetence of the NPS in its present form. It is pathetic that there is no evidence to show that Government of India or PFRDA has taken note of the findings recorded in the book under reference for which PFRDA’s then Chairman Dhirendra Swarup had written a Foreword in 2007! M G Warrier, Mumbai


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