BackGift your domestic help a pension through WhatsApp
pinBox Solutions, a fintech focused on micro pension to offer pensions over WhatsApp to domestic help and other informal sector workers
PremiumSigning up for a pension in India means filling up long and complicated forms. However, a series of regulatory changes and tech innovations have enabled pinBox Solutions, a fintech focused on micro pensions to offer pensions over WhatsApp to domestic help and other informal sector workers. The project called ‘Gift-a-Pension’ allows any person to gift a pension to another person by opening a National Pension System (NPS) Tier I account for them. pinBox has tied up with HDFC Pension Fund for this project. The account can be opened by answering a series of questions over WhatsApp . The beneficiary of the pension account only needs to have a bank account and mobile number that is linked to their Aadhar card.
“The beauty of NPS is that it is not rigid and this really suits informal sector workers. You can contribute, say ₹1,000 one month and ₹3,000 the next. The minimum amount needed to open an NPS account is just ₹500," said Gautam Bhardwaj, co-founder and director, pinBox Solutions. “Unlike a mutual fund where the investment has to come from the investor’s bank account, anyone can contribute to another person’s NPS account. The only requirement is that the money has to come from a bank account, it cannot come in cash. So, for example, if a domestic worker is employed in multiple homes, several employers can make contributions to the account of the worker," said Bhardwaj.
“It doesn’t even have to just be your house help. You can gift a pension to anyone—your wife, your friend or your parents," he added. pinBox also has a calculator which allows contributors to get an estimate of how much their pension corpus can grow to by the age of retirement. While pinBox provides the technology, the actual investment process is carried out by a HDFC Pension Fund which is also a registered point-of-presence (PoP) under the NPS. pinBox, in turn, is compensated by HDFC Pension Fund. You can make your contributions to the account using a UPI-enabled app such as BHIM, Google Pay or WhatsApp pay apart from net banking. You have to contribute a minimum of ₹1,000 per annum to keep the account active. Account opening costs between ₹200 and ₹400 and there is a charge per contribution levied by the PoP that can go up to 0.5% of the amount contributed (minimum of ₹30). For example, a contribution of ₹5,000 per month will attract a charge of ₹30. These charges are automatically deducted from your contributions. The money is then invested in equities, corporate bonds and government bonds, according to a NPS lifecycle fund chosen by pinBox initially (which the subscriber can later change). You have to contribute a minimum amount of ₹1,000 per year. Pension Fund Managers (PFMs) also have their charges, but this is capped at a low level of just 0.09% (9 basis points).
The WhatsApp number for Gift a pension is +91 80 2300 2000.
The NPS Tier 1 account matures at the age of 60 and the accumulated corpus can be used to buy an annuity (regular pension). “This is a great initiative and if it takes off then it can greatly increase the pension coverage in India, especially in the unorganized sector. Tech is a big barrier and apps like WhatsApp can help bring those barriers down. Gift-a-Pension is currently in its early stages and we are exploring how we can scale it up," said Sumit Shukla, CEO, HDFC Pension Fund.
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