UTI Mutual Fund has today taken another step towards facilitating a self help Micro Pension Initiative for old age security of workers in the unorganised sector.
UTI Mutual Fund has entered into a customised arrangement with The Bihar State Co-operative Milk Producers’ Federation Ltd. (COMPFED) for providing the members of five Milk Producers Union associated with it, an investment opportunity through a micro-pension initiative under UTI-Retirement Benefit Pension Fund.
A function was organised at Patna on September 13, 2006 to launch this arrangement with COMPFED which was graced by Shri Nitish Kumar, Hon’ble Chief Minister of Bihar as the Chief Guest. Shri Sushil Kumar Modi, Hon’ble Deputy Chief Minister of Bihar presided over the function.
The Bihar State Co-operative Milk Producers’ Federation Ltd. (COMPFED), a Confederation of Co-operative Milk Producers Union of Bihar started its operations in 1993. It is the largest single federation of milk producers’ union in Bihar with over 2,50,000 members. Its objective, inter alia, is to carry out activities for promoting production, procurement, processing and marketing of milk and milk products for economic development of the farming community.
UTI Mutual Fund has entered into a customised arrangement with The Bihar State Co-operative Milk Producers’ Federation Ltd. (COMPFED) for providing the members of five Milk Producers Union associated with it, an investment opportunity through a micro-pension initiative under UTI-Retirement Benefit Pension Fund.
A function was organised at Patna on September 13, 2006 to launch this arrangement with COMPFED which was graced by Shri Nitish Kumar, Hon’ble Chief Minister of Bihar as the Chief Guest. Shri Sushil Kumar Modi, Hon’ble Deputy Chief Minister of Bihar presided over the function.
The Bihar State Co-operative Milk Producers’ Federation Ltd. (COMPFED), a Confederation of Co-operative Milk Producers Union of Bihar started its operations in 1993. It is the largest single federation of milk producers’ union in Bihar with over 2,50,000 members. Its objective, inter alia, is to carry out activities for promoting production, procurement, processing and marketing of milk and milk products for economic development of the farming community.
Under the Micro-Pension initiative facilitated by UTI Mutual Fund and COMPFED, members of Milk Producers Union will contribute Rs.100/- every month towards UTI-Retirement Benefit Pension Fund up to the age of 55 years so as to enable them to receive pension in the form of periodical income / cashflow after they reach the age of 58 years.
Initially around 40,000 members of Milk Producers Unions will be joining the scheme. By the end of the year more than 1,00.000 members are expected to join the scheme.
Speaking on this occasion Shri U K Sinha, Chairman and Managing Director, UTI AMC said, “Empowering Milk Producers of Bihar is the prime objective of COMPFED and UTI Mutual Fund will help them achieve this objective by providing its members an investment opportunity through UTI-Retirement Benefit Pension Fund. This micro pension initiative will also help inculcating the habit of regular savings among the milk producers and enable them to share the benefits of growth of the Indian economy.”
“We hope to extend this initiative to one million workers in the unorganised/organised sector across the country by next year.” Shri Sinha added
While addressing the gathering, Shri Amir Subhani, Chairman and Managing Director, COMPFED said, “COMPFED has also successfully implemented various programmes relating to family welfare, empowerment of women, sanitation and promotion of non-conventional energy for milk producer farmers associated with milk cooperatives. However, the Micro-Pension initiative undertaken with the help of UTI Mutual Fund is the biggest of such initiatives in terms of members covered and time horizon. This will inculcate the habit of savings amongst milk farmers and will lead to happy and secured old age. In fact, COMPFED is the first Milk Co-operative Federation of any state to have opted for implementing the Micro-Pension initiative.”
Initially around 40,000 members of Milk Producers Unions will be joining the scheme. By the end of the year more than 1,00.000 members are expected to join the scheme.
Speaking on this occasion Shri U K Sinha, Chairman and Managing Director, UTI AMC said, “Empowering Milk Producers of Bihar is the prime objective of COMPFED and UTI Mutual Fund will help them achieve this objective by providing its members an investment opportunity through UTI-Retirement Benefit Pension Fund. This micro pension initiative will also help inculcating the habit of regular savings among the milk producers and enable them to share the benefits of growth of the Indian economy.”
“We hope to extend this initiative to one million workers in the unorganised/organised sector across the country by next year.” Shri Sinha added
While addressing the gathering, Shri Amir Subhani, Chairman and Managing Director, COMPFED said, “COMPFED has also successfully implemented various programmes relating to family welfare, empowerment of women, sanitation and promotion of non-conventional energy for milk producer farmers associated with milk cooperatives. However, the Micro-Pension initiative undertaken with the help of UTI Mutual Fund is the biggest of such initiatives in terms of members covered and time horizon. This will inculcate the habit of savings amongst milk farmers and will lead to happy and secured old age. In fact, COMPFED is the first Milk Co-operative Federation of any state to have opted for implementing the Micro-Pension initiative.”
Lack of Social Security for Unorganised Sector in India
One in every 6 people over the age of 60 in the world lives in India. A majority of our 8 crore elderly today however do not receive a pension -- either from the government or from their employers. Traditionally, most of us have depended on the joint family system and support from our children when we stop working. But today, our children are often forced to migrate when they start earning and as a result, nearly 2 in every 3 households is a nuclear household in India. Therefore, we can no longer depend on family support in our old age.
The aged of today have no choice but to depend on their own lifetime savings to survive for nearly 20 years if they stop working at age 60. And if they have not saved enough during their working lives by then, they face the grave risk of outliving their savings and of facing poverty at a period of their lives when they may be physically unable to work. This is even more true for those engaged in manual work including farmers, head-loaders, rickshaw-pullers, weavers, construction workers and farm labour.
For the government, this is a very serious social and fiscal concern. Within the next few years, the problems of dealing with poverty are likely to be overshadowed by the problem of dealing with poverty among the elderly. Especially since our current population of 8 crore elderly is going to witness rapid growth and we are likely to have nearly 20 crore elderly in India within the next 2 decades.
The plight of our current aged is partly driven by our labour market structures. Of the 36 crore paid workers in India today, only the 11% organised sector workers, including government servants and salaried employees in large private firms, enjoy pension rights and benefits.
However, most of India's workforce is employed in the unorganised sector and has been traditionally excluded from formal pension and provident fund arrangements. These include self-employed workers like farmers, farm labourers, self-employed women, contract and casual labour and small retailers. If these workers do not have access to any formal pension scheme, many of them will have no option but to continue to work throughout their lives.
One in every 6 people over the age of 60 in the world lives in India. A majority of our 8 crore elderly today however do not receive a pension -- either from the government or from their employers. Traditionally, most of us have depended on the joint family system and support from our children when we stop working. But today, our children are often forced to migrate when they start earning and as a result, nearly 2 in every 3 households is a nuclear household in India. Therefore, we can no longer depend on family support in our old age.
The aged of today have no choice but to depend on their own lifetime savings to survive for nearly 20 years if they stop working at age 60. And if they have not saved enough during their working lives by then, they face the grave risk of outliving their savings and of facing poverty at a period of their lives when they may be physically unable to work. This is even more true for those engaged in manual work including farmers, head-loaders, rickshaw-pullers, weavers, construction workers and farm labour.
For the government, this is a very serious social and fiscal concern. Within the next few years, the problems of dealing with poverty are likely to be overshadowed by the problem of dealing with poverty among the elderly. Especially since our current population of 8 crore elderly is going to witness rapid growth and we are likely to have nearly 20 crore elderly in India within the next 2 decades.
The plight of our current aged is partly driven by our labour market structures. Of the 36 crore paid workers in India today, only the 11% organised sector workers, including government servants and salaried employees in large private firms, enjoy pension rights and benefits.
However, most of India's workforce is employed in the unorganised sector and has been traditionally excluded from formal pension and provident fund arrangements. These include self-employed workers like farmers, farm labourers, self-employed women, contract and casual labour and small retailers. If these workers do not have access to any formal pension scheme, many of them will have no option but to continue to work throughout their lives.
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