New Delhi: Creating an inclusive and sustainable Pension System in India: Opportunities and Challenges’
Pension Fund Regulatory and Development Authority (PFRDA) organised its fourth annual conference on pension on 28th February, 2018 at IHC, New Delhi. The theme of the conference was ‘Creating an Inclusive and Sustainable Pension System in India: Opportunities and Challenges. Deliberations were held during two technical sessions- (i) Channelizing savings for old age income security and (ii) Pension Payouts : The Road Ahead.
Finance Minister, Arun Jaitley graced the occasion and inaugurated the PFRDA’s website on financial literacy and pension planning- ‘Pension Sanchay’ www.pensionsanchay.org.in. He also released reports titled- ‘Security for Seniors- Opportunities and Challenges for creating an inclusive and sustainable pension system in India” prepared by PFRDA in association with CRISIL. The other report which was unveiled was “CRISIL Inclusix” which shows the progression of financial inclusion and pension coverage over the years in the country. 666 districts across all States and UTs were studied. Arun Jailtely in his speech emphasised the need of providing for old age income security and pension facility to the citizens in response to the evolving demographic profile, changing socio-economic structure and limitations on the fiscal resources. The dependency of senior citizens is a grave challenge for the society and it can be met with evolution of concept of pension and its expansion. The top seven performing APY-SPs (Banks) were awarded for their contribution in bringing subscribers under the social security net of APY under the ‘Makers of Excelence campaign.
Hemant Contractor, Chairman, PFRDA in his key note address said it is PFRDA’s endeavour to extend the pension cover to all those who do not have it which stands at 16.18% today. He shared facts that in India, the fastest growing age group is above the age of sixty and they are expected to be 300 mn and more by 2050 and 42% above the age of 60 years and 22% above the age of 80 years have to continue work for their living. Besides that 85% of the workforce in unorganized sector characterized with seasonal /sporadic employment with migration, uncertain level of income and limited capacity to save and lacking any old age security options necessitates the need to provide old age financial security designed in a manner to cater to heterogenous unorganized sector.
Dr. B. S. Bhandari, Whole Time Member (Economics), PFRDA, highlighted the need to expand the coverage of NPS in an affordable and sustainable manner. He also informed the participants about the new initiatives undertaken by PFRDA viz. launch of mobile app, two new conservative and aggressive life cycle funds and eNPS -an online platform for registration. He also informed that the pension portfolio is managed prudently and its CAGR since inception has been 10% and comprises of 49% G-Securities, 35% corporate bonds and 14% equity and the rest money market instruments. He also threw light on the efforts made by the authority to provide training to the officers and provision of wide network of distribution channel and availability of choices of investment mix and efficient grievance redressal mechanism for the NPS subscribers.
Ashu Suyash,MD & CEO, CRISIL, highlighted that globally pension planning is the bedrock of social security. The Jan-Dhan, Atal Pension Yojana and recently launched National Health Protection Scheme can be a strong platform for efficient micro-insurance and micro-pension administration. The conference was followed by discussion on topics related to channelizing savings for old age income security and pension payouts through improving financial literacy and mass awareness as it enables investors make effective financial decisions and considering combination of policy options and evolving acceptable pension designs.
