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| UTI AMC to cover the poor under micro-pension scheme |
| BS Reporter / Mumbai Apr 30, 2009, 00:56 IST |
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UTI Asset Management Company (UTI AMC) and Invest India Micro Pension Services (IIMPS) have inked a strategic partnership with the BASIX Group to deliver UTI’s retirement benefit pension fund to BASIX customers.
BASIX is a leading livelihood promotion institution that works with over 1.5 million poor – 90 per cent of whom are rural households and the rest urban slum dwellers. BASIX works with over 100 NGOs and community-based microfinance institutions (MFIs) across the country.
Under this partnership, IIMPS will use its proprietary Micro-Pension Model to deliver the UTI-Retirement Benefit Pension Fund to BASIX customers. In 2009-10, this partnership will target 700,000 working poor, most of whom are women living in 10,000 villages of Andhra Pradesh, Karnataka, Bihar, Orissa, Jharkhand, Maharashtra, Madhya Pradesh, Tamil Nadu, Rajasthan, Chhattisgarh, West Bengal, Delhi, Uttarakhand, Sikkim and Assam.
The micro-pension scheme would be investing 23 per cent in equities and later it could be extended up to a maximum of 40 per cent. The remaining would be invested in government securities. It would have zero entry load and the expense cost would be incurred by the UTI AMC itself.
IIMPS is jointly promoted by SEWA Bank, UTI AMC and leading pension and development sector experts to provide low-cost, secure and scalable mechanism to the working poor to save for their old age.
IIMPS has created the Micro-Pension Model to enable millions of low-income workers across India to access regulated retirement and insurance products in a secure and low transactions cost environment. Since its inception in 2006, IIMPS has enabled over 100,000 working poor to save for their old age in collaboration with UTI AMC.
Savings of these low-income workers will flow into UTI-RBPF (retirement benefit pension fund) – a Government of India notified pension scheme managed by UTI AMC and regulated by the Securities and Exchange Board of India. This scheme has provided a compounded annualised return of over 11.09 per cent since inception.
U K Sinha, chairman and managing director of UTI AMC, said, “Micro-pensions can play a key role in bridging India’s pension coverage gap. This joint initiative by UTI AMC and IIMPS compliments larger policy and regulatory efforts in delivering sustainable retirement solutions to the working poor.”
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