Over 50,000 dairy farmers of the State Co-operative Milk Federation in Bihar are set to join UTI Mutual Fund's Retirement Benefit Pension Fund, making the scheme a unique model that allows the unorganised labour force to come under the pension bracket by contributing an amount as low as Rs 200 per month till the age of 55.U K Sinha, CMD of UTI Asset Management said the pension fund, originally designed as a tax-saving instrument, was revived to bring in the large number of unorganised workers under the pension ambit.While the members of State Co-operative Milk Federation in Bihar are expected to join the scheme soon, the fund house has also made reasonable progess with the Indian Farmers Fertilisers Co-operative (Iffco) for a similar tie-up. About 1 lakh farmers each from five districts in the country are expected to join by October.Currently, only 12% of the working class have a formal pension scheme and UTI MF targets the huge unorganised labourers, who have no pension or other social security net.Sinha said UTI MF was confident of giving good returns on these savings when the workers attain the age of 58, going by the scheme's past record. The pension plan has given a return of 12.64% since its inception in 1993 and this should be compared with the returns of 8% under the Employee Provident Fund (EPF) or the other pension schemes. Over a working age tenure (from 18 years to 58 years), a 12% return would amount to a lumpsum amount of Rs 19.40 lakh while for a 10% return, the amount would shrink to Rs 11.10 lakh. "There will be a difference of several lakhs for 8% return and 12% returns," Sinha said. Upon attaining 58 years, the workers could withdraw money as lumpsum or could receive the money as monthly payments or annuity-based schemes.The Retirement Benefit Fund has given a return of 24.25% in the last 3 years and 15.65% in the last 5 years. He said fund managers would be investing upto 35% of the corpus in equity while the remaining 65% would be parked in debt.
