New Delhi, Dec. 4: The carping has begun over the new pension scheme for government employees that is scheduled to be launched in less than a month.
The detractors say the proposed defined contribution pension scheme does not look enticing as the authorities have still not spelt out the benefits to the investor.
“There should be an assurance provided to the annuity provider. Otherwise, it becomes completely meaningless. In the absence of any promised return, it is difficult for a such a scheme to gain momentum,” said Liyaquat Khan, president of the Actuarial Society of India, on the sidelines of a pension summit.
Most felt that financial literacy, access and simplicity of the scheme and innovations to ensure greater coverage are fundamental issues that the government has to deal with immediately.
“The needs, aspirations and risk perceptions of an individual changes with age. Accordingly, the consumption and saving pattern of each individual is determined by his or her lifestyle. Since there is no trend that we can follow, it is imperative for every annuitant to be financially literate,” said Gautam Bhardwaj, director of Invest India Economic Foundation, which hosted the two-day summit.
He said the biggest challenge would be to use simple language to propagate the pension scheme, which is targeting over one-lakh employees.
Participants also expressed some reservations about whether the pension scheme would be able to meet the needs of all sections of society.