There is lukewarm response in the district for the Atal Pension Yojana (APY) – a savings scheme launched by the Centre– to provide for social security by way of old-age pension, and the scheme is open to anyone aged between 18 and 40.
It provides for a fixed monthly pension ranging from Rs.1,000 per month to Rs. 5,000 per month - depending on the contribution of the subscriber - on attaining the age of 60. But not more than a few hundred policies have been sold in the district compared to nearly 1.97 lakh accidental insurance and life insurance products sold by the financial institutions.
The poor response to pension scheme is symptomatic of the general mindset of the people who do not take retirement planning seriously, explained Subramanya of the Life Insurance Corporation (LIC) of India. “It is not a surprise that APY is not doing well as the previous generation depended on their children to help them tide over old age and did little retirement planning. The present generation has not woken up to the reality of retirement which is considered a distant future and hence tend to ignore it”, he added. A senior bank official said people scoff at the pension amount accruing after 20 or 30 years as being too meagre. Even LIC’s pension schemes have not evoked positive response from the investors and only about 29 lakh pension policies have been sold across India so far for a working population which runs into hundreds of millions, said Mr. Subramanya.
An investment consultant pointed out that even among the financially literate the pension schemes are not popular as the rate of returns barely matches the inflation and hence people opt for other products like mutual funds or stocks.
The Atal Pension Yojana was launched to provide retirement income especially for people in the unorganised sector (though it is open to all) not covered by any social security schemes like provident fund, gratuity, pension etc which is extended to workers in the organised sector. But they hardly make up for 10 per cent of the working population; but the remaining 90 per cent face the grim reality of little or no income unless they save during their working life.
‘The present generation has not woken up to the reality of retirement’
