The Hindu Business Line : `Average earner is risk averse'

The data survey may help PFRDA in finalising the contours of a new pension scheme for the informal sector. About 40,800 households from different parts of the country comprised the sample for the survey.

New Delhi , April 25

AN average Indian earner continues to be risk averse. Housing, life insurance policies from LIC of India, deposits of nationalised banks, postal deposits and gold are the avenues of investments that are perceived as `safe' by such an earner, according to the national data survey conducted by Acnielsen Org Marg.

Further, an average Indian earner had the highest degree of confidence in nationalised banks, LIC and the post offices.

The findings of the data survey were presented before the Chairman of the interim Pension Fund Regulatory and Development Authority (PFRDA), Mr D. Swarup, here on Monday.

The national data survey has estimated the total workforce at 424.6 million people and the total earners at 363.4 million (90.4 million urban earners and 273 million rural earners). The total number of unpaid family workers stood at 61.2 million persons.

Interestingly, the data survey showed that about 65 per cent of earners had "not thought about retirement at all". A large majority of them expected their children to take care of them after retirement from work.

The data survey has also brought out the fact that most of the earners save on account of social and religious obligations. The other reasons as to why people save include educational requirements, marriage of children and old age security.

Further, it has also been estimated that earners retiring at 60 years are expected to live an additional 17 years after retirement. This would imply that an earner would have to during his working life save for an average 17 years after retirement.

"There are about 300 million people in the unorganised sector who are not covered by any form of pension product. The effort of PFRDA would be to provide a window for everyone to save for their retirement. We have a long haul before us. Public awareness and education are crucial to help achieve our objectives", Mr Swarup told reporters here.

He said that the PFRDA would frame regulations and also start the awareness programmes on defined contribution pension schemes simultaneously as soon as the proposed law to set up PFRDA was enacted by Parliament.

The Standing Committee that is looking into the PFRDA Bill was expected to submit its report sometime between the budget session and monsoon sessions of Parliament. Mr Swarup also made it clear that the PFRDA cannot provide "assured returns" under the proposed pension scheme for the unorganised sector.

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`Average earner is risk averse'