UTI Mutual Fund kicks off micro-pension scheme

UTI Mutual Fund has entered into a customised arrangement with Shree Mahila Sewa Sahakari Bank (SEWA), Gujarat to provide its members an investment opportunity through a micro-pension initiative under its UTI-Retirement Benefit Pension Fund.

UTI Mutual Fund will also sign MoU with such 30 financial institutes in other states including Tamil Nadu, Kerala, Karnataka, Orrisa, Assam and West Bengal.

Under this customised arrangement in Gujarat, facilitated by SEWA Bank, every month the members will contribute small amount 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 or cashflow after they reach 58.

"In Gujarat, SEWA Bank has more than 2,75,000 depositors out of which 25,000 members are initially joining the scheme and rest of the 25,000 members will follow soon," said U K Sinha, CMD, UTI AMC.

He added that the minimum amount of investment under this arrangement is Rs 50 and in multiples of it thereafter.

"This is a lower amount systematic investment plan (SIP) and is safe," said Sinha.

He further added that this investment has lower risk so it will not give higher returns.

"In this scheme we are looking for huge numbers of small investors," he said.

"This is the first pension scheme for unorganised sector workers of the country," said Sinha.

He added that the scheme was launched on Wednesday in an event in presence of finance minister P Chidambaram in Ahmedabad.

Sinha said the company is expecting at least one million members this year.

"We will be entering in the rural areas with the help of the financial institutes or NGOs," he said.

The UTI-Retirement Pension Fund is an open-end tax saving-cum-pension fund.

The investment objective of the scheme is to primarily provide pension in the form of periodical income to the members to the extent of redemption value of their holding after they attain the age of 58 years, said Sinha.

"The scheme invests minimum 60 per cent and maximum 100 per cent in debt and balance in equity," he added.