Maneka pushes for raising pension benefits

“Government is making efforts to set up a pension authority to ensure a financially secure future for older persons”, Minister for Social Justice and Empowerment Maneka Gandhi told a workshop on a national policy for older persons, held here on Thursday.

Even as the government moves ahead with its policy of economic reform, moving out of the social sector, there have been concerns that there should besome kind of social net for the more marginalised sections of society, like women and older persons.

Lacking a comprehensive social security network, older persons are increasingly becoming vulnerable, as joint families give way to its modern nuclear equivalent. The government finds itself unable to provide even a bare minimum pension since the numbers of the elderly are going up steadily, while the tax base shrinks compared to the overall growth of the populatin.

But with “less government, is more” becoming the current mantra, it is evident that it is an impossible task for government to provide pensions. The numbers of older persons, would run into hundreds of millions.

The Ministry has recommended a new pension system based on individual retirement accounts. The idea, as Gandhi explained, is that all earning persons, whether in the organised or unorganised sectors, be they white collar workers or vegetable vendors, small shopkeepers or labourers, they should all be contributing some money duringtheir working years to the pension fund.

The amount may be as little as Rs 100 a month, which would accumulate in the name of the individual, no matter if he or she changes jobs frequently or stops working for a while.

For those with larger savings at their disposal, the individual can indicate the manner in which the funds or part of his pension funds are invested, with this task being entrusted to professional fund managers.

The fund managers would be regulated by a regulatory body, known as the Indian Pensions Authority (IPA), to ensure that people do not lose their life’s savings due to unwise decisions or fluctuations in the market.

The Ministry of Social Justice’s ambitious pension scheme, however is yet to get the green signal from the Finance Ministry, though the Minister remains optimistic.