From (L-R): Mr. Y. R. Warerkar, Executive Director, MVIRDC World Trade Centre Mumbai; Mr. Vijay Kalantri, President, All India Association of Industries and Mr. Hemant Contractor, Chairman, Pension Fund Regulatory and Development Authority (PFRDA) during an interactive meeting organised by World Trade Centre Mumbai in association with All India Association of Industries at WTC Mumbai. “Pension Fund Regulatory and Development Authority (PFRDA) has been notified by Government in 2014 with main aim to promote and develop as a supervising regulator of pension and social security of people at large. At present there are only 2.6 lacs subscribers and the same is expected to grow manifold in the years to come ”, said Mr. Hemant Contractor, Chairman, Pension Fund Regulatory and Development Authority (PFRDA) during an interactive meeting with World Trade Centre Mumbai and All India Association of Industries.
The Regulatory Authority was mainly created as earlier the pensions were given from Government and State Budget but since the formation of this authority is given by us i.e. 10% of salary and DA equally contributed by the Government and employee, however, 2 states West Bengal and Tripura have not joined the scheme as yet. Till now, we have over 2,25,000 crores out of which 33,000 crores are invested in mutual funds added Mr. Contractor. 85% of the working people are working in unorganized sectors and only 15% people are working in organized sectors. Such schemes are promoted by Government to look after the welfare of people after 60 years and we have recommended Government to promote it as automatic enrollment scheme as in many other countries. Mr. Contractor further said that additionally, leveraging the Pradhan Mantri Jan-Dhan Yojana, Atal Pension Yojana, and the National Health Protection Scheme can aid in efficient micro-insurance and micro-pension administration, thus increasing their penetration. There is also an urgent need to create a central repository of pension data to remove information asymmetry and increase actionable efficiencies.
Some of the schemes under National Pension Schemes include Atal Pension Yojna, Ayushman Scheme, EPFO, ESISC, Gratuity-based fund, maternity fund which are being designed in a way to make them attractive such as providing them tax benefits as not in other pension fund schemes. Currently on an average 120 million people are 60 years of age which is the fastest growing in India, which has the capacity to increase to 180 million in 2030 and further to 300 million by 2050. Therefore, the Pension Scheme is being further designed to make it a soft pension scheme rather than a mandatory one, said Mr. Contractor. Mr. Contractor, further he added that countries namely UK, Turkey, New Zealand has attained an auto enrollment whereas in India government has to introduce more attractive schemes to increase enrollment, till auto enrollment comes in force.
Earlier in his welcome address, Mr. Vijay Kalantri, President, All India Association of Industries said, “The Pension Act was the need of the hour. Worldover Pension funds are being used in various projects. A regulatory authority system brings in the feeling of safety and security. So the National Pension System is most timely government should increase its scope and ambit as we have both organized and unorganized sectors. Mr. Kalantri suggested that the Banking Act also required a change.
Mr. Y. R. Warerkar, Executive Director, MVIRDC World Trade Centre Mumbai.