India in need of a robust pension system: KPMG-FICCI report

MUMBAI: The Indian government needs to make a policy around pension as currently India is marked by low pension coverage and inadequate pensions, a KPMG and FICCI white paper said Wednesday.

“Proactive and policy interventions, while a majority of the Indian population is still young, are required and can help avert an impending pension crisis,” the report titled -- Employee pension in India; current practices, challenges and prospects’ stated.

As per the report the government must engage with regulators, employees and employers for bringing more people under the pension gamut. “The key stakeholders- – government, regulators, employees and employers – should engage in a focussed and constructive discussion to explore ways to broaden the pension coverage in India and to build a robust pension system. Careful and nuanced interventions are required in the tax regime for pension benefits, in reducing the administrative burden on employers and for encouraging additional pension savings,” the report said.

According to a related survey carried out it was revealed that 91% of the surveyed companies are contributing PF on full basic salary, while nine per cent contribute on the statutory limit of INR15,000. However, only 40 per cent respondents organise awareness sessions/workshops for imparting information on retirement planning. While a majority of the respondents believe the current plans in place are adequate (56 per cent), a significantly large population (44 per cent) feels that more can be done to provide for their employees’ retirement planning.