While the UPA government’s attempts at convincing its Left allies on the need for pension reforms continue to fall on deaf ears, the UTI Mutual Fund has been making some serious progress on the daunting task of providing a pension scheme for India’s unorganised sector workers that form over 90 per cent of the workforce and are largely financially illiterate. Tweaking its existing Retirement Benefit Plan to allow monthly contributions as low as Rs 50, UTI had kicked off its ‘micro-pension’ initiative in April 2006 by signing up self-employed women like vegetable vendors and maids who are part of the Shri Mahila Sewa Sahakari Bank in Ahmedabad.In less than a year, the scheme has found over 75,000 takers — workers associated with Paradip Port and Dock Labour Union, members of self help groups associated with Bank of India and Corporation Bank, Bihar’s milk producers (Bihar State Co-operative Milk Producers Federation Ltd), Union Bank of India employees. That number is about to rise exponentially in the coming days. Speaking to The Indian Express , UTI Mutual Fund chairman U K Sinha said that Bihar Chief Minister Nitish Kumar is so happy with the scheme’s success with the state’s milk producers’ co-operative that he now wants UTI to extend the scheme for the state’s two lakh-odd para teachers. That’s not all. The Department of Posts wants its Gramin Dak Sewaks to be included under the scheme. Pilot projects are set to begin in 5 districts across the country with IFFCO co-operative societies. Preliminary studies are on with the government of Madhya Pradesh to bring in employees of autonomous institutions like Shikshakarmis, Panchayatkarmis, Anganwadi workers. According to a senior UTI official, the fund house is in the process of finalizing a number of such tie-ups very soon. In fact, UTI is planning to take the scheme beyond Indian shores as well — Non-resident Indians in the Gulf countries would also be able to join the pension scheme soon. UTI expects its micro-pension scheme to emerge as a role model not only domestically but also for unorganised workers in other countries. With returns over 9 per cent in the last one year alone and 16 per cent over the last five years, UTI’s Retirement Benefit Plan has done better than the contractual government administered retirement schemes like the Employees’ Provident Fund or the Public Provident Fund. With a maximum of 40 per cent of the plan’s investments being in equities, the Government could ask the Left parties (opposing the equity route in EPFO as well as under the New Pension Scheme) to look at UTI’s pension scheme more closely.
