Expert Zone

Straight from the Specialists

Is there ‘public interest’ in deferring pension bill?

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(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)

The pension bill, first introduced in 2005, got booted out yet again; only this time in ‘public interest’.

Across the world, employers have been finding it increasingly difficult to live up to tacit guarantees underlying a ‘defined benefits’ pension system — a natural fallout of the elderly outnumbering the working population combined with increasing unpredictability in our economic environment over the past two decades.

The feasible alternative is a ‘defined contribution’ system. Under this an employer makes their contribution and ends his responsibility.

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