Developing New Markets

Government Co-contributions for Pensions
In 2008, IIMPS worked with the Government of Rajasthan in design and implementation of the Viswakarma Yojana – India's first government co-contributions based pension scheme for the working poor. Within a few months, IIMPS enrolled ~50,000 eligible low income workers under this Scheme. The scheme implementation was showcased at a national pension policy roundtable hosted by IIMPS with UNDP at New Delhi. Senior officers from the Indian Ministry of Finance and 11 State Governments participated in this consultation. In the following months, Government of India and the State Governments of Andhra Pradesh, Madhya Pradesh, Haryana and Karnataka announced similar conditional cash transfers for pension schemes for their working poor with an aggregate co-contributions budget of ~Rs.2500 crore till 2017. IIMPS has recently started working with the Government of Karnataka and with the Government of Haryana (with LIC) for turn-key implementation of their co-contributory pension schemes for specified categories of low income informal sector workers.

Contributory Pensions for Rural Women
Over 6.1 million self-help groups (SHGs) have been established under the NABARD SHG-Bank Linkage Program. These SHGs already encourage thrift among a large base of low income women – most of whom are located in rural areas. The SHG movement initiated by NABARD can serve as a ready platform for education and enrollment of low income rural women for contributions based pension and microinsurance programs. To develop and field-test a sustainable, scalable and secure mechanism for encouraging and enabling SHG members to accumulate micro-savings for their old age, the IIMPS-NABARD Rural Micro Pension Initiative was launched in 2010. Field implementation is in progress at Darbhanga and Bhagalpur (Bihar), Mayurbhanj and Puri (Odisha), Cuddalore and Madurai (Tamil Nadu), and Raibareili and Moradabad (Uttar Pradesh). Relevant RRBs and DCCBs in these 8 districts are providing banking and payments support to clients. Over 25,000 rural workers have been voluntarily enrolled already using the Micro Pension platform in these 8 districts in recent months.

Micro-Savings by Overseas Migrant Workers
Roughly 5 million Indians are employed on short-term work contracts in 17 ECR countries – mostly in the hospitality, construction and household sectors in the UAE. Higher incomes during overseas employment however rarely result in financial savings and merely cause a temporary hike in the consumption expenditure of their families. To encourage and enable such overseas migrant workers to set aside micro-savings for retirement, insurance, and their return and resettlement to India, the Ministry of Overseas Indian Affairs, with technical assistance from IIEF, has launched a new co-contributions based scheme. This Mahatma Gandhi Pravasi Suraksha Yojana will will provide government co-contributions of up to INR3,000 to subscribers for up to 5 years. IIMPS is assisting the MOIA in developing IEC tools and an outreach strategy for this Scheme. Micro-savings of overseas migrant workers will flow directly through individual beneficiary bank accounts to UTI, NPS-Lite and LIC.

South Asia Level Cooperation on Pension Inclusion
South Asian countries are remarkably similar to each other in terms of demography, economic strength, labor markets, history, culture, legal and political structures, and challenges of governance. Hence, lessons from both success and failure in pension policy design and implementation are highly portable from one country to another within South Asia. The Asian Development Bank (ADB) and IIMPS have produced a new report that proposes the establishment of a South Asia Pension Forum to foster regional cooperation on old age poverty issues. The study and this report was based on extensive consultations with over 100 key stakeholders including policymakers, regulators, finance firms and think-tanks from Sri Lanka, Nepal, Pakistan, Bangladesh and India. A team from IIMPS has also conducted a feasibility study to assess the demand and implementation capacity at Bangladesh and Nepal for introducing contributions based pension products for low income informal sector workers.

An Evidence-led Approach to Pension Policy Formulation
Over the years, IIMPS has produced, sponsored and commissioned a number of reports, studies and consultations that have provided the basis for an appropriate policy, regulatory and business response to India's old age poverty challenge. IIMPS has been involved in the generation of several imporant reports and publications covering postal reforms, sizing and segmenting the latent demand for private pensions, and financial services demand and utilisation among low income households. Several of these reports are based on primary data produced through pan-India household surveys commissioned by IIEF.

Changing Lives
field updates

Low income individuals in remote tribal locations at Tamil Nadu are now being enrolled for "micro-pension" in partnership with Centre for Tribal Research and Development (CTRD).

IIMPS and eKutir will jointly assist low income farmers in Odisha to accumulate micro-savings through the Micro-Pension model.