How You Can Gift Your Domestic Help A Pension Plan In 10 Minutes


From enabling the poor to invest amounts as low as Rs.50, to co-contributing in their investment and encouraging employers to gift a pension, IIMPS is leading the marginalised section of the society towards a better and more secure future. Know more about how this team is working with the government and other agencies to change the lives of millions of people.

“I too would like to employ someone to clean my car some day like I do for other people now,” says Gauri, a car cleaner with big dreams in her eyes. Gauri has been working as a house maid and a car cleaner along with her husband for 26 years now. She has a family to support and two kids who are now standing on their own feet.

“But I don’t want to be a burden on them. That is why I have enrolled for the Micro Pension scheme, so that I can live my old age with dignity. The money will be of a great help when my husband and I grow old,” she says.

Gauri is one of millions of marginalized workers in organized sectors who believed that facilities like pension was something only the privileged class could avail.

But thanks to Gautam Bharadwaj and his social enterprise Invest India Micro Pension Services Private Limited (IIMPS), the economically poor community can now be ensured a financially strong future.

Gauri, the car cleaner.

Gauri, the car cleaner.

Having started as an idea to give a chance to the poor and marginalized working class to live a comfortable life, the company has benefited over one million people so far.

The idea came to Bhardwaj’s mind when he started working with the government for a project focused on old age social and income security (OASIS). When the government launched the National Pension Scheme (NPS), Bhardwaj realized that it was only for government employees, and out of the 300 million people that came under the informal working sector, only six to seven percent were eligible to get the pension.

“Also, the government would pay these pensions out of tax money that they deducted from the general public’s pocket. And the government employees who were getting this pension benefit already had good salaries and were not poor. So the facility was not reaching out to those who actually needed it,” Bhardwaj says.

Later on, the government started deducting 10 percent from the employee’s salary for the pension and the scheme was also opened for the rest of the country in 2009.

“Generally, people have the mentality that marginalized people don’t save or do not find the need to save for the future. We wanted to check if that’s the case, so we did a survey to check the demand of a micro pension programme for the poor,” he says.

And, within four months they had 25,000 registrations for the micro pension scheme. Bhardwaj knew then and there that he had to make this idea work and engage more people.

IIMPS enables marginalized people to save smaller amount.

IIMPS enables marginalized people to save small amounts.

“Most of the time, even when a poor person wants to invest in a scheme like this, they do not know how to approach it. They don’t have a bank account or a proof of permanent residence and are clueless about the formalities, unlike most of us who have a relationship manager at our banks to take care of everything,” Bhardwaj says.

IIMPS is bridging this gap by collaborating with state and central government, UTI AMC , SEWA, national/regional banks, microfinance institutions, employers, self help groups, NGOs, cooperatives, worker associations and unions.

The biggest issue arises when it comes to collecting the payment. Unlike the higher income earning community that can deposit in lump sum and an agent can collect it from their homes, most of IIMPS’ clients are daily wage workers and are unable to deposit a big amount and no agent is ready to go and collect such a small amount from their homes.

The agent won’t take so much trouble if he gets a 2 percent commission on Rs.200 that a person is depositing. Also, there is a risk of theft – how does anyone make sure that the agent is actually depositing the money in the pension accounts?” says Bhardwaj.

There was a need to implement a simple, safe and trustworthy platform where the poor could easily deposit their money. To solve this issue, IIMPS implemented payment by card.

The client is given a prepaid card which is mapped to his or her pension account. They can go any time to a designated shop, pay the amount they want to put in the pension account by cash, and the shopkeeper would swipe the card with the same amount.

The user will get a message instantly. And hence the card is mapped to their insurance account; there will be no chance of theft or misuse of the money.

Pension which was considered as a thing for elite, can now be enjoyed by poor as well.

Pension which was considered as a thing for elite, can now be enjoyed by poor as well.

Gift a Pension

Another interesting initiative which Gautam has launched to enable the poor to get pensions is Gift a Pension, an initiative of the Micro Pension Foundation, which is a not for profit entity set up by Gautam and a few other promoters from IIMPS, in 2012. The Foundation designs, tests and main-streams technology led solutions to deliver financial services to the low income informal workers. Gift a Pension initiative enables employers to open a pension account for their domestic helps, drivers, gardeners, etc.

The key role of the employers is to explain the scheme and do the initial formalities of opening an account for their employees as this is the biggest hurdle that they face. The employers can also co-contribute to the pension if they want to. Anyone that falls under the age group of 18 to 55 can open an account which falls under NPS-Lite Swavlamban account, and  access to an SBI Life insurance cover of Rs. 30,000. Users will get the entire amount at the age of 60.

Even if a help changes jobs, the new employer can continue to co-contribute towards the helper’s pension account.Also, there is a multilingual helpline (080-23014545) where all the queries can be addressed. Launched in September 2014, this scheme has already received over 1200 employer registrations and 450 enrollments. 

“The idea is simple. We want to provide services to the poor similar to those which the wealthy get. The only difference is that instead of investing a high amount, these people invest in small parcels. It’s like instead of buying a shampoo bottle, they are buying a sachet; the quantity is less but the product and the quality is the same,” Bhardwaj says.

For more details on how to gift a pension and what are the formalities required, contact Parul Seth Khanna at or check out their website.

Gift a Pension scheme requires employers to help their house helps open a pension account.

Gift a Pension scheme requires employers to help their domestic helers open a pension account.

Co-contribution by the government

To extend help to people with very low income, who can barely manage to invest any substantial amount of money, IIMPS has been associated with the government’s Vishwakarma Micro Pension Scheme in Rajasthan where they are co-contributing the pensions. For every Rs.1,000 a client invests, the government adds another Rs.1,000 to it.

This provides consistency in the payment. People are willing to somehow save so that they can avail the extra benefit,” Bhardwaj says.

The challenges faced by Bharsdwaj were many. As this was a first-of-its-kind initiative, there were no precedents to learn from and everything had to be done from scratch. “We didn’t want to do quick fixes. We wanted to make people aware and increase the financial literacy in the country,” Bhardwaj says.

Also, he realized that even the pension agents who would explain the scheme to the clients, were not very well aware of the schemes and the product. To solve this issue, IIMPS started giving training to the agents as if they were customers. “We asked them to understand the scheme as if they were using it. They asked questions which any customer would ask. This is how we enhanced the understanding of the products among our staff,” he says.

Other challenges were to solve issues related to collecting the cash and enabling users to continue the investment even when they relocate. To solve the issue, the prepaid card payment system was launched.

We want people to save more and more. We are gradually seeing an increase in awareness but there is still a long way to go,” Bhardwaj says.

With all these solutions in place, IIMPS’ clients are more persistent and regular in paying the installments as compared to the government schemes. IIMPS has 40 to 45 percent persistency rate as compared to the government’s NPS, which has 15 to 17 percent.

The card system of investing has built trust and confidence among people.

The card system of investing has built trust and confidence among people.

By working with the state and central government, IIMPS has managed to increase the impact of existing programmes. They are currently working in around 120 districts of 14 states in the country and hoping to expand further.

We definitely would want to engage with more people and work in more districts,” Bhardwaj says. Apart from getting people sensitized about micro pensions, IIMPS wants to work in the field of insurance too.

The amazing micro pension scheme has enabled hundreds of thousands of marginalized people to secure a safer and financially strong future. You can also help by gifting a pension to your helpers today.

To know more about IIMPS’ work, check out their website.


Foundation for Excellence – Excellent Work

When deserving students lack means, the Foundation For Excellence intervenes on their behalf

This column is about aspiring engineering, technological and medical students who finally made it because there was someone anonymous in a quiet corner of the world, willing to write a cheque and transform their destiny.Shital Shinde’s Solapur family lived in a single room, prayed for rain and depended on the largesse of their extended family. Shital wasn’t deterred; she scored 92 per cent in SSC, 90 per cent in HSC, 94 per cent in PCB (Physics, Chemistry and Biology) and got the 509th rank in the Maharashtra CET. Most would have been elated; Shital was defeated. She secured a seat in B J Medical College (Pune) but there was no money to sustain it. Foundation For Excellence heard and arranged for a scholarship. Shital secured 68 per cent in the first year and now intends to specialise in gynaecology and work in rural India.

Rajarshi Bhowmik was born to a struggling family in a coastal Bengal town. He studied by a kerosene lamp. His real challenge began when he completed his school examination. A larger educational investment was now needed: books, coaching and study materials for the entrance examinations. The school principal connected him to the FFE facilitator who arranged the funding. Relieved, Bhowmik secured a spot in the top 10 of the 12th standard board exam and a rank within the top 2 per cent in the engineering entrance exam. Now came an even bigger challenge: the college fees of around Rs 3 lakh. FFE offered to pay the interest of an education loan for four years. The result: Rajarshi completed his B Tech and is employed in an MNC.

Akshaya Kumar G came from a family dependent on the meagre income of an elderly, priestly father. Since he attended a school within the Gurukul education system, he had to be mainstreamed for class ten. He appeared for his SSC exams privately, secured 95.5 per cent, joined the PUC (science stream), struggled with English but reported 94.6 per cent in HSC. Since he hoped to pursue engineering, he was selected as an FFE scholar and went on to top the university. He was part of the college team that entered the final of Robozest (IIT Mumbai event). He seeks to pursue his post-graduation from IISC Bangalore in Astrophysics and possibly one day work for ISRO.

Yogita’s father passed away in November 2014 and the family was reduced to a meal a day.From the sixth standard, a government scholarship accounted for Yogita’s education and hostel. Yogita ranked 946 in her CET exam, which obtained her a place at Shri Vasantrao Naik Government Medical College (Yavatmal). Same problem: no funds. FFE stepped in. Yogita now intends to specialise in gynaecology and plans to complete her post-graduation from AIIMS.

Chitralekha Gurumayum from Imphal comes from a family where her alcoholic father is an occasional mason and chauffeur, while her mother stitches handmade traditional blankets. Chitralekha was exempt from paying fees through school as she was always ranked first.When she was confused about her educational direction, her school principal helped; she passed HSC with 74.9 per cent. She secured the 202nd rank in her first medical entrance exam; she re-attempted it and came 34th. The game was virtually over ­ there were no family jewels to sustain her journey through Jawaharlal Institute of Medical Sciences (Imphal). FFE stepped in as the white knight. Chitralekha cleared her first year MBBS with ranked 34th and second year MBBS with a rank of 39(64 per cent).

Venkataraghavan Hegde walked 5 kilometres to take the bus to school, and occasionally missed it when an overflowing river swallowed the bridge. He secured a decent ranking in the state CET exam (1315), which got him an engineering seat in the prestigious BMS College of Engineering. The important question: `How does one pay for the fees and accommodation?’ FFE said don’t worry: it funded the college tuition fees and text books and gave him guidance as well. Today, Venkataraghavan is a graduate engineer working with Delphi Automotive Systems.

So what is Foundation For Excellence? An NGO started by venture capitalists Dr Prabhu Goel and Poonam Goel focused on life transformation of academically brilliant (but financially needy) Indian students, by awarding meritcum-means scholarships. FFE awards scholarships to students pursuing degrees in Engineering, Technology and Medicine in India. The scholarship amount is Rs. 40,000 a year for Engineering (Rs. 1.60 lakh over four years) and Medicine (Rs 2 lakh over five years). The family income cut-off: less than Rs 1.80 lakhannum.

The numbers are staggering. Since 1994, FFE has assisted more than 15,000 scholars and given out more than 38,000 scholarships in excess of Rs 66 crore across 25 states.

The best part: the people funding FFE are names that seldom get the applause for transforming prospects. Cognizant. IBM. Capgemini. HP. Google. Sonus Networks. Bosch. Trent.Ashok Leyland. Caterpillar. Praxair. Amdocs.Bally Technologies. Oracle. DISA Technologies.And a number of foundations and private individuals working below the radar.

There is a lovely quote by Isaac Newton about seeing further only because he once stood on the shoulders of giants. Applies here as well.