Micro Pension Plan Set to Get off the Block
Monday, April 10, 2006
The government may be struggling to convince the Left about the New Pension Scheme (NPS) and the need to channel a slice of the pension and provident fund kitty into equity.
But there?s hope round in an unlikely source. Early next week, 50,000 women, many of them struggling to eke out a living, will sign up for the country?s first micro pension scheme. These ladies, members of Ahmedabad?s Self-Employed Women?s Association(SEWA), will join a SEBI-approved pension plan that offers no assured returns but can invest up to 40% of its collections in stocks.
This could be a mirror-image of the government-planned new pension scheme, under which, subscribers build a nest egg with their contributions. No benefits are assured on retirement. The NPS and the micro-pension plan is based on the concept of defined contributions by workers. The final pay-outs hinge on the returns earned by the schemes they subscribe to.
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