After the success with opening bank accounts and two insurance schemes, the government is lining up a major push for retirement savings under its financial inclusion programme .
The finance ministry has begun talks to rope in 1.5 lakh post offices along with kirana shops and chemists to sell pension plans with an assurance of minimum returns. Sources told TOI that the Department of Posts, which is soon launching its payments bank operations, has decided to tweak its core banking software to push the Atal Pension Yojana. "They will treat it like a third party product and earn some commission on it," an official said.
TThe department of financial services has now set its eyes on other distribution networks, including outlets selling recharge coupons for mobile phones, to push the product.
Unlike the group life insurance scheme or the accident cover launched by the Narendra Modi government, the Atal Pension Yojana has been slow to take off, although it has picked up in recent weeks. Of the 12.15 crore policies sold under the Jan Suraksha Yojana, there were only 11 lakh Atal Pension Yojana plans .
In contrast, a little under 9.2 crore accident insurance policies, that cost Rs 12 a year, have been sold. Sales of life insurance policies with a premium of Rs 12 a month added up to over 2.86 crore on December 1.
The somewhat poor response to the pension scheme has prodded the government to tap other sales options besides popularizing it. In any case, financial sector experts believe that pension plans are the toughest to sell. Unlike several other financial products, which are "bought", pension schemes have to be "sold", they said. In other words, the agent has to spend considerable time explaining the need to plan for old age, something that is not treated as priority even by the well-off.
Will the kirana shops and chemists be able to push pension plans? Government Officials believe they can. They said that for a kirana shop owner or a chemist, especially in rural and semi-urban areas, commission from the pension plan will be a "top-up income", considering there are no infrastructure costs. The government will get them to undergo the required training organized by the Pension Fund Regulatory and Development Authority.
Insurance company executives, who also hawk pension plans, said it is a tough proposition. In fact, they pointed out that poor commission is one of the main factors behind failure of the National Pension System to take off.
Source:- The Economic Times
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