Rajan proposes a multi-pronged strategy that involves a combination of measures. First, he suggests improving pension fund management by adopting more efficient investment strategies. This could potentially enhance the returns on pension funds, reducing the burden on the government to provide higher pensions.Secondly, Rajan advocates for encouraging voluntary pension contributions from employees, thereby creating a supplementary pension source. This could be incentivized through tax breaks or employer matching programs, promoting personal responsibility for retirement savings.Source:- the times of IndiaFurthermore, he recommends exploring partnerships with private sector entities to manage pension funds. The private sector often possesses expertise in investment management, which could lead to better fund performance and lower costs. However, regulatory oversight would be crucial to ensure the protection of retirees’ interests.
Source:- hindustan timesRajan also underscores the significance of promoting financial literacy and awareness among citizens. By educating people about the importance of saving for retirement and the various pension options available, individuals can make informed decisions about their future financial security.Lastly, he highlights the potential of introducing means-testing for pension eligibility. By targeting government support towards those with genuine financial need, resources can be allocated more efficiently, reducing the overall financial burden on the system.In conclusion, Raghuram Rajan emphasizes the need for a comprehensive and pragmatic approach to address pension concerns.
Bye bye t considering a mix of strategies, including improved fund management, voluntary contributions, private sector partnerships, financial education, and means-testing, a more sustainable and cost-effective solution can be achieved, ensuring retirees’ financial security without overburdening government resources
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Find less costly ways to address pension concerns instead of OPS, says Raghuram Rajan
By tirupatinews
