Partnership Aimed At Providing Retirement Benefits To Low-Income Workforce In Saarc
NEW DELHI: UTI AMC has picked up 10% equity in Delhibased Invest India Micro Pension Services Pvt Ltd (IIMPS), as part of a strategic partnership aimed at providing retirement benefits to low-income workforce in India and other countries in the SAARC region.
The tie-up would enable IIMPS to offer retirement savings and insurance products to 6 lakh low-income workers through micro finance institutions, co-operatives, worker associations and other groups, said Gautam Bhardwaj, a pension expert and one of the promoters of IIMPS. Currently, IIMPS is providing micro pension to 45,000 women members of SEWA, a leading co-operative bank in Gujarat, in partnership with UTI AMC.
The company is also implementing the scheme to SEWA members in Madhya Pradesh and about 100,000 low income workers in Andhra Pradesh. “Our plan is to bring about 3-5 million low income workers under pension cover over the next 3-5 years,” Bhardwaj said.
SEWA, with over 350,000 low-income women workers as its customers, holds 15% stake in IIMPS. Other promoters are Vijay Mahajan, Vijayalakshmi Das and Ashish Aggarwal.
The strategic partnership between UTI AMC and IIMPS is significant in the context of the new pension scheme based on the principle of defined contribution. NPS, currently being implemented for government employees, is expected to be opened up for the 284 million workers in the informal sector over the next couple of years. Going forward, IIMPS shall offer its micro pension, micro insurance services and NPS to lower middle income groups, said Bharwaj.
The company has developed a web-based, transactional and administrative platform —sCube— based on individual micro-pension and microinsurance accounts. The platform has built a transparent and low-cost social security marketplace using which low-income workers with modest savings and located anywhere in India are able to access regulated investment management and insurance services. The sCube application has already been implemented at SEWA Bank and manages the 40,000 individual micropension accounts of SEWA members. IIMPS has also recently tied up with KfW for technology enhancement and financial literacy interventions. Rajasthan government has given the company the mandate to deliver pension to about 500,000 low-income workers in 20 occupations.
