Filial ties

New Delhi, April 25: The joint family system in India may be cracking up, but filial ties remain as strong as ever. At least that?s what parents think.

An AC Nielsen study on pension reforms says 42 per cent of Indians are confident that their children will take care of their financial needs in old age; another 34 per cent believe that the kids they raise just might do so.

Clearly, a movie like Baghban may stir emotions inside a multiplex but most Indians don?t really believe that they will have to go through the agony that Amitabh Bachchan and Hema Malini suffer in the film as ageing parents of self-centred, loutish kids.

So what does all this have to do with pension reforms? Quite a bit. The AC Nielsen study indicates that Indians do not save enough for retirement, are queasy about parking funds with private banks and insurance companies and recoil at the prospect of investing in market-risk instruments.

According to the study, the respondents have complete faith only in state-owned insurer Life Insurance Corporation of India, nationalised banks and investments in post office.

Going by this version, it is only too hard to believe the numbers of the life covers provided by private life insurance companies, supported by the Insurance Regulatory and Development Authority (IRDA).

?There is a great amount of distrust in dealing with multinational companies,? said Sandeep Ghosh, senior manager (client service), ORG Centre for Social Research.

Nowhere in the survey do the respondents cite ?pension? as the real cause for their savings. Chronologically, saving patterns were attributed to social and religious obligations, education and finally marriage of their children.

The respondents listed the safest investments as real estate, gold, bank deposits and insurance cover from the national insurer.

The study revealed that Indians in the eastern part of the country were the most conservative investors while their counterparts in the western region were the most bold.

There doesn?t seem to be a great deal of support for funnelling retirement funds in the equity markets ? an investment option that is at the heart of the new pension scheme for government employees. How do you get around the problem?

Through education, says PFRDA chief D Swarup who unveiled the study today. ?Yes, it is indeed an ambitious plan to get the new pension system working, but we need to make a start somewhere;.?