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Under the Economic Lecture Series initiated by IIM Indore in Janurary 2014, a Guest Talk on Pension System was organized on July 7, 2016. The Guest Speaker for the talk was Dr. Kavim Bhatnagar, Social Protection Economist, Strengthening Public Financial Management for Social Protection, Ministry of Finance, Government of Republic of Bangladesh, Dhaka. He spoke on the topic ‘Pension System—Global Demographic Challenges and Need for Public Policy Intervention’.
Dr. Bhatnagar’s talk revolved around what pension is, why is it gaining prominence across the world, what are the reforms which took place in India specifically after the year 2004, and what are the major challenges faced in bringing these reforms. He began his talk mentioning that around 90% of the global population doesn’t understand the ‘risk of longevity’. ‘Earlier people used to live for just about 55 years, now the age limit has gone up to 85. Currently a person, who is 30, works hard and earns sufficient. Later when he or she is 60, will the person be able to work that hard and have sufficient money? People have no clue how things would work out with respect to higher life expectancy’, he noted.
Discussing about the two types of pension systems, Defined Benefits and Defined Contribution, Dr. Bhatnagar said that the reforms are always made keeping in mind the situation of a common man. ‘Pension reforms are very important today, considering the demographics. In the next two decades, India will have around 320 million senior citizens and there would have been a chance that around 90% of those would not have had any idea about pension system. Luckily, India is the first country which has successfully introduced and implemented the pension system’, he noted.
Dr. Bhatnagar also discussed various backdrops related to public pensions, the reason behind deficit of public pension systems, current and future financial problems and socio-economic challenges and opportunities like urbanization and globalization; which may affect the pension reforms. The talk also included various principals which are followed while reforming the pension system, like focusing on the adequacy, creating a plan which is self-financing and is sustainable, keeping in mind the safety and security regulations and creating a plan which is transparent and predictable.
The session gave an insight to entire scenario India had seen since the year 2004, when the pension reforms had started taking place. The session was followed by Q&A.
About Dr. Kavim Bhatnagar:
Dr. Kavim V. Bhatnagar is advising multiple Nations on Public Policy related to Social Protection, Public Financial Management and Pension Reforms. He brings to the table a unique combination of an ex-civil servant, voluntarily retired in 2012; a researcher and consultant on social protection (designed, rolled out and implemented India’s first contributory and co contributory pension scheme); PFM – Pensions specialist (Pension Reforms in India, Rwanda, Cambodia, Nepal and Bangladesh); a pension economist (part of team that designed and rolled out NPS and NPS Lite in India). Micro Pension Innovation in India includes designing, innovating, testing, rolling out and implementing individual account based co/contributory micro pensions for the working poor and labor classes. He has designed pension and insurance systems, products, processes, financial literacy modules, institutional architecture for micro pension and insurance schemes towards attaining voluntary coverage. He has also rendered consultancy on projects to the ADB, DFID, KfW, UNDP, World Bank, etc. in the area of social protection, social security, financial inclusion, livelihoods, CCTs and UCTs, civil services pension and fiscal reforms.