How does Gift a Pension work?

Yesterday you read about How you can help your domestic help / driver / peon in the office…start saving some sensible money towards a pension, here is how Gift a Pension works:

It takes the objective of “financial inclusion” to each of our doorsteps. And very conveniently, at that. It enables individuals like you and I who employ domestic help, to sign them up for regulated financial products such as the NPS Lite, and life cover from SBI Life. (right now it comes as a packaged product with no choice, but hey this is just the beginning and for people with almost no savings or risk cover I am not getting too worried about choices).

They have simple videos to communicate the concept (http://bit.ly/102MyiN) and the process (http://bit.ly/1p5eVJ9) to employers. I am briefly describing it here as well – An employer simply logs on to the website (www.giftapension.com), uses videos and calculators on the site to explain the concept to their domestic worker(s), fills an application form and makes the first contribution online. The forms, along with a micro pension VISA prepaid card, get couriered to the employer, and once the employer has taken the signatures, the courier gets picked up again from their doorstep. Additionally, the platform directly communicates with the domestic worker after on boarding is complete. The card is portable with them to their next job, or city. They can use it to make regular contributions, exactly the way they recharge their mobile phones. Alternatively, the employer can continue to make payments for them using the same online platform. IMAGINE YOU PAYING ALL HER BONUSES INTO A PENSION FUND, every year. It will work wonders for her. The plan includes a small medical insurance and life insurance.

The platform takes care of seemingly trivial things like couriers  getting picked from the doorstep to ensure convenience at all stages. The email help desk for the employers, and regional language helpline for the domestic workers seem to be nice. One has to wait and see how the whole thing works. I am sure the intentions are very good, one has to see the implementation.

I see a far bigger application in this if the State and Central Governments want to contribute, they can just charge this card – it cannot get better than that, can it. This is surely financial inclusion at its best. I hope once they are all connected by a card (and a telephone line I presume) you may even be able to take financial education to them. And at a later stage it could become a brilliant source to inform them about dubious schemes in the market.

Even though this plan is implemented by a private body, all the money goes to big governmental companies (which means you run the risk of incompetence , but no great loss of capital (hopefully).

If each of us enables just one life, of say our domestic help, all 40 million domestic workers would have the chance at a dignified old age. Let charity begin at home.

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6 Responses to “How does Gift a Pension work?”

  1. Dear Subra,
    We did our bit of financial inclusion for two of our domestic help maids and one cook. This was few years back. We insured all of them under jeevan saral as the minimum monthly contribution was only Rs. 250.00. To our surprise two of them agreed for a monthly contribution of Rs. 500.00 and one maid for Rs. 400.00 per. None of them had a bank account but thanks to NaMo’s Jhan Dhan yojna. Now all of them will be having abank account soon and we are planning SIP for them.

    This article of yours has come at the right moment and we hope to gift all of them pension scheme.

    Thanks for doing this article.

  2. That is great, Pradip. With supporters like you, we are confident that all domestic help would be included in mainstream finance and lead a dignified and financially independent old age.
    Please email us at support@giftapension.com if you require any assistance with the same.

  3. just wanted to know about broker default. i have read in your safal niveshak interview. is broker default possible in todays age. is it wise to diversify to more than one broker. i would be obliged if you can write a blog on it.

  4. I have proposed PPF for my maid – they contribute 200 and I contribute 200. They see thier money double instantaneously 🙂 Every year we will increase by 100Rs i.e. 300 from her side and 300 from me. This way they are committed to continue this and see growth. She shows me the updated pass book every quarter as proof.

  5. This is really great, Mark! The objective of Gift a Pension is to encourage more individuals to think like you :). NPS Swavalamban also provides them a co contribution from the Government of India, and ensures a regular source of monthly income after the retirement age. The Gift a Pension platform brings together other services such as a life insurance cover, and a medical cover (soon). We encourage you to talk to them about this as well, and gift a pension to them 🙂

  6. Nice work Sir, I would like know more about the best pension plans in india. I planned to go for HDFCLife retirement and pension plan. Is is valuable for me ???

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