India needs sustainable pension system

The social security system in India has a big hole -- an inadequate and disjointed pension system.

"Pension schemes are engines of growth in many European countries and it can be so for India too," said Jan Nijssen, ING's global head pensions and CEO, Central Europe insurance, while releasing the monograph 'Indian Pension System: Issues and Concerns'. It has been authored by four IIM Bangalore faculty, R Vaidyanathan, S Jyothilakshmi, Sankarshan Basu and Shubhabrata Das.

The monograph is a precursor to a book by the same name which will be out next January. The book was conceived in 2002 at a conference in IIM in 2002 and stresses the need for pension reforms which will make the social security system a sustainable one.

The book was born out of two years of research and after interviewing over 2,500 people from across India and affirms the need to develop the pension sector.

The pension system in India is mostly in the form of schemes for government employees, mandated pension and provident fund schemes for private sector employees, employer sponsored pension scheme, voluntary retirement savings, targeted social assistance schemes and welfare funds.

"India is not new to the pension schemes. But, the system is not sustainable and falls far short of meeting the needs of most people," said Nijssen.