Given the increasing cost of living, particularly the cost of private medicare, even the returns from the New Pension Scheme (NPS) will be unlike to provide subscribers with a decent living 30 years from now. It is necessary therefore to explore all possibilities of maximizing the returns under the NPS.
I think therefore that not just 5% but at least 25% of the contribution should be invested in equities. However this should be done under the condition that a return of minimum 8% annually be guaranteed by the Govt and that half of the earnings above this amount be paid as bonus to the employees while the remaining half be held by the Govt as a buffer against future losses if any. This would not only help the employees but also reduce the strain on the Govt's resources.
It is also necessary that this measure be made applicable to all employees and not just to those who opt for this since most employees, particularly at the lower end of the scale, do not have the knowledge to make an informed decision in this regard.
I think that such a system would meet with approval from all sections of the polity because of the minimum return being guaranteed by the Govt.
