Pensions and Entitlements
Pensions and entitlements
Most countries today are going through an entitlement crisis. Ambitious programs supported by the state to provide social security and medical care to the aged are now looming large. While some attempts have been made to go from defined benefit plans(where returns are assured by the state) to defined contribution(where the individual and the employer/government contributes to a plan that is then managed by various fund managers), the aging of these populations and the increase in longevity has created huge liabilities. India is on the verge of its demographic dividend, and putting in the right kind of universal, defined contribution plan takes advantage of the value that would be created by the millions of young workers, and lays the foundation for a state which is fiscally strong even when the population starts to age.