a study of investors perception towards pension schemes...

A STUDY OF INVESTORS PERCEPTION

TOWARDS PENSION SCHEMES IN INDIA

A Thesis submitted for the

fulfillment of the award of

DOCTOR OF PHILOSOPHY

IN

BUSINESS ADMINISTRATION

By

Sapna Singh

Under the Supervision of

Nishant Kumar

Department of Business Administration

University of Lucknow

Lucknow, India

2014

i

DEPARTMENT OF BUSINESS ADMINISTRATION

UNIVERSITY OF LUCKNOW

***************************************************

Date: 10/12/14

CERTIFICATE

This is to certify that Mrs. Sapna Singh has carried out the research work presented in

this thesis entitled “A Study of Investors Perception towards Pension Schemes in

India” for the award of Doctor of Philosophy from Lucknow University, Lucknow

under my supervision. The thesis embodies results of original work, and studies are

carried out by the student herself and the contents of the thesis do not form the basis

for the award of other degree to the candidate or to anybody else from this or any

other University/Institution.

Supervisor

Dr. Nishant Kumar

Assistant Professor


ii

DECLARATION

I hereby affirm that my research work entitled “A Study of Investors Perception

towards Pension Schemes in India” for the award of Doctor of Philosophy from

Lucknow University, Lucknow is my original work and has not been submitted for

any assessment or degree/diploma or award at the University of Lucknow or any other

University/Institution.

Sapna Singh


COUNTERSIGNED

This is to certify that the above declaration by the candidate is true to the best of my

knowledge.

Supervisor

Dr. Nishant Kumar

Assistant Professor


University of Lucknow, Lucknow

iii

ACKNOWLEDGEMENT

It is my pleasant duty to express deep sense of gratitude to all those who were

associated with me, for their constant support and affection which enabled me to

complete this work.

I am highly obliged to express my sincere thanks and gratitude to my guide Dr.

Nishant Kumar, Department of Business Administration, University of Lucknow, for

kindly accepting me as his Ph.D. student. His valuable guidance, suggestions, and

critical examination of the work are deeply acknowledged.

I am thankful to Prof. Sanjay Medhavi, Head, Department of Business

Administration, University of Lucknow, Lucknow, for his guidance related to

research norms of the University at all stages.

I am also very grateful to Prof. Arvind Kumar, Dean, Faculty of Commerce,

University of Lucknow. His incessant enthusiasm and inspiration have given me new

dimension to work with proper attitude. Without his sustained and sincere efforts, this

thesis would have not taken this shape.

Further I am thankful to all the faculty members and staff of the Department of

Business Administration for their help and suggestions during Thesis work.

I express my special thanks to Prof. R. B. S. Verma, Lucknow University for

carrying out this task. I would also like to thank my friends and relatives like Mr.

Mayank Gangwar, Dr. Nupur Kashyap and Mr. Vivek Kumar Singh who have

been helpful to me all the time throughout the completion of this thesis.

iv

I would like to thank my husband Mohit and daughter Nirvee for supporting me in

carrying out my research work.

Lastly, I would like to dedicate this work to my mother Mrs. Sushma, my father Mr.

L. B. Singh, my In-laws, and for being present with me all the time with their

blessings.

v

PREFACE

The growth of pension schemes has been phenomenal. The mobilization of funds by

pension funds has been on the rise since 2004. When pension fund market was thrown

open to the private sector in 2004, the corpus of pension fund in India has swelled

tremendously.

The main objective of the thesis is to study and find the current & prospective

investors’ perception towards the pension schemes. Purposive sampling method is

used to collect data. Hundred respondents each are taken from three main cities of

Uttar Pradesh namely Lucknow, Kanpur and Allahabad cities. A structured

questionnaire was given to 380 (300 selected for the study) respondents of the select

cities which consisted of both open ended and close ended questions.

The study is divided into six chapters. The first chapter is introductory in nature and

deals with historical background of pension system, types of pension schemes,

advantages and limitations of pension schemes. This chapter also discussed about new

pension system (NPS). The second chapter deals with review of literature. Research

Methodology is applied with in the third chapter. In research methodology we are

collecting data to find the answer of the following questions given as follows: To find

out the factors that influence the investor toward the investment in pension schemes,

what are the problems faced by investors of pension scheme, which tools of

investment are popular among the investors, what is the pattern of investment in

pension schemes and what are the factors that discourage investors of pension

schemes. In chapter 3, we are also testing hypothesis. Hypothesis given as follows:

association between regular investment in pension scheme and occupation of the

respondents, association between regular investment in pension scheme and education

vi

of the respondents, association between regular investment in pension scheme and

income of the respondents, association between regular investment in pension scheme

and expenditure of the respondents, association between regular investment in

pension scheme and savings of the respondents, association between regular

investment in pension scheme and marital status of the respondents, association

between regular investment in pension scheme and age of the respondents and

association between regular investment in pension scheme and gender of the

respondents. The fourth chapter describes the geographical profile of the select cities

and demographic details of respondents. The fifth chapter deals with analysis of the

demographic profile of respondents of select cities of Uttar Pradesh State and

perception of investors towards pension schemes’ investment. The sixth chapter gives

the conclusion of the Study and gives suggestions based on the findings.

It is inferred that most of respondents give first preference to children education

followed by retirement planning. The main factor influencing the pattern of

investment are high living standard, safety, tax exemption, flexibility, liquidity,

diversification of risk, market trend, choice of scheme, reliability and affordability.

The most popular sources of investment according to the respondents are savings A/c,

insurance, mutual fund, pension schemes, P.P.F. A/c and, gold & silver. The

important factors that influence the investor towards the selection of pension schemes

in select cities of Uttar Pradesh state are high returns, tax policy, and market trends.

Qualified persons use internet for getting the information about pension scheme.

Female respondents prefer to get the information through professionals. 97%

respondents prefer to invest their savings in pension schemes through systematic

manner. Systematic investment is popular among the respondents.

vii

CONTENTS

Certificate i

Declaration ii

Acknowledgement iii

Preface v

Contents vii

List of Figures xiv

List of Tables xvi

CHAPTER 1

INRODUCTION……………………………………………………………..... 1

1.0 Preamble…………………………………………………………….....…..... 1

1.1 Need for Present Work………….………………………………..........…..... 1

1.2 Objective of the Present Work…………………………. ……….........…..... 2

1.3 Introduction to Pension System……………………………..........….....…… 3

1.3.1 Indian Pension System…………………..............…....................... 5

1.3.2 Coverage and Size………………………………………….…....... 9

1.3.3 Need to Increase the Growth and Coverage of Indian Pension

Market…………………....................….......................................... 10

1.3.4 The National Pension System & Its Provision………..................... 13

1.4 The Reasons of Growing Pension Market………………………………….. 18

CHAPTER 2

LITERATURE SURVEY….....….......….....….....….....…....................…….. 20

CHAPTER 3

RESEARCH METHODOLOGY…………………......….......................…… 39

3.0 Introduction………………………………………………………………… 39

3.1 Research Statement………………………………………………………… 39

3.2 Research Design…………………………………………………………… 40

3.2.1 Objectives of Study………………………………………….. 41

viii

3.2.2 Hypothesis Formation……………………………………….. 41

3.2.3 Nature of Data and Sources of Data…………………………. 43

3.2.4 Tools for Data Collection……………………………………. 43

3.2.5 Sample Design……………………………………………….. 43

3.2.6 Area of the Study…………………………………………….. 45

3.2.7 Data Scaling and Measurement……………………………… 45

3.2.8 Tools and Methods of Data Analysis………………………... 45

3.2.8.1 Tabulation and Classification of Data…………. 45

3.2.8.2 Frame Work of Data Analysis…………………. 45

3.2.8.2.1 Chi-Square Test……………………… 46

3.2.8.2.2 Garrett’s Ranking Technique………... 47

3.2.8.2.3 Likert’s Scale Technique……………. 48

3.3 Scope of the Study………………………………………………………… 49

3.4 Limitations of the Study…………………………………………………... 49

CHAPTER 4

PROFILE OF SELECT CITIES OF UTTAR PRADESH……………..… 51

4.0 Uttar Pradesh and Select Cities of Uttar Pradesh…………………………. 51

4.0.1 Uttar Pradesh…………………………………………………… 51

4.0.2 Select Cities of Uttar Pradesh…………………………………... 56

4.0.2.1 Lucknow………………………………………….….. 56

4.0.2.2 Kanpur……………………………………….………. 59

4.0.2.3 Allahabad……………………….……………………. 61

4.1 Demographic Profile of Respondents of Select Cities of Uttar Pradesh… 64

CHAPTER 5

DATA ANALYSIS…………………………………………………………… 66

5.0 Introduction………………………………………………………………… 66

5.1 Demographic Profile of Respondents of Select Cities of Uttar Pradesh… 67

5.1.1 City Wise Respondents of Select Cities of

Uttar Pradesh State…………………………………………... 67

5.1.2 Gender Wise Classification of Respondents…………………. 67

5.1.3 Age Wise Classification of Respondents…………………….. 68

ix

5.1.4 Marital Status of Respondents……………………………….. 69

5.1.5 Occupational Status of Respondents…………………………. 69

5.1.6. Literacy Level of Respondents………………………………. 70

5.1.7 Respondents Paying Income Tax…………………………….. 71

5.1.8 Income Wise Classification of Respondents…………………. 72

5.1.9 Expenditure Wise Classification of Respondents…………….. 73

5.1.10 Classification of Respondents According to Savings……….. 75

5.2 Perception of Investors towards Pension Scheme Investment……………… 77

5.2.1 Purpose of Savings……………………………………………. 77

5.2.1.1 Purpose of Savings of Respondents of Select Cities

of Uttar Pradesh…………………………………. 77

5.2.1.2 Purpose of Savings of Respondents by

Occupation………………………………………. 78


Education Qualifications………………..……… 79


Monthly Income………………………………… 80


Age of Respondents……………………………... 81

5.2.2 Investment Alternatives……………………………………….. 83

5.2.2.1 Preference of Investment Alternatives by the

Respondents of Select Cities of

Uttar Pradesh State……………………………… 83

5.2.2.2 Rank for Investment Alternatives

(Lucknow City)………………………………….. 85


(Kanpur City)…………………………………… 86


(Allahabad City)………………………………… 87

5.2.2.5 Rank for Investment Alternatives for Select

Cities of Uttar Pradesh………………………….. 88

5.2.2.6 Garrett’s Ranking Table (Lucknow City)………. 89

5.2.2.7 Garrett’s Ranking Table (Kanpur City)………… 90

5.2.2.8 Garrett’s Ranking Table (Allahabad City)……… 91

x

5.2.2.9 Garrett’s Ranking Table for All the Select

Cities of Uttar Pradesh State…………………….. 92

5.2.2.10 Investment Alternatives of Respondents

by Occupation…………………………………. 94


by Educational Qualifications…………………. 96


by Monthly Income……………………………. 97

5.2.3 Reasons for Investing in Pension Schemes……………………. 99

5.2.3.1 Reasons for investment in Pension Schemes by

Respondents of Select Cities of

Uttar Pradesh State………………………………. 99

5.2.3.2 Ranks - Reasons for Investment in Pension Scheme

(Lucknow City)………………………………….. 101


(Kanpur City)…………………………………….. 103


(Allahabad City)…………………………………. 105

5.2.3.5 Ranks - Reasons for Investment in Pension

Scheme in Select Cities of Uttar Pradesh State….. 107

5.2.3.6 Garrett’s Ranking Table Reasons for Investment

in Pension Scheme in Lucknow City……………. 109

5.2.3.7 Garrett’s Ranking Table - Reasons for Investment

in Pension Scheme in Kanpur City………………. 110


in Pension Scheme in Allahabad City…………… 111


in Pension Scheme in Select Cities in

Uttar Pradesh State……………………………… 113

5.2.3.10 Reasons for Investment in Pension Scheme by

Occupations……………………………………. 115


Educational Qualifications……………………. 117

5.2.3.12 Reasons for Investment in Pension Scheme

xi

by Age………………………………………… 118

5.2.4 Factors Influencing the Selection of Pension Schemes………. 120

5.2.4.1 Rank Given By the Respondents to Factors

Influencing the Selection of Pension Schemes

(Lucknow City)…………………………………... 120



(Kanpur City)…………………………………… 121

5.2.4.3 Rank given By the Respondents to Factors


(Allahabad City)………………………………… 122



of Select Cities of Uttar Pradesh………………… 123

5.2.4.5 Garrett’s Ranking Table - Factors


(Lucknow City)…………………………………. 124

5.2.4.6 Garrett’s Ranking Table-Factors Influencing

the Selection of Pension Schemes (Kanpur City)… 125

5.2.4.7 Garrett’s Ranking Table - Factors Influencing the

Selection of Pension Schemes (Allahabad City)… 126

5.2.4.8 Garrett’s Ranking Table - Factors Influencing

the Selection of Pension Schemes of Select

Cities of Uttar Pradesh State……………………… 128

5.2.5 Sources of Information…………………………………………. 129

5.2.5.1 Sources of Information for Investors of Pension

Schemes in Select Cities of Uttar Pradesh………... 129

5.2.5.2 Sources of Information by Occupation of

Respondents………………………………………. 131

5.2.5.3 Sources of Information by Educational

Qualifications of Respondents……………………. 132

5.2.6 Preference of Pension Schemes………………………………… 133

5.2.6.1 Preference of Pension Schemes based on Structure 133

5.2.6.2 Preference of Pension Schemes Based on

xii

Objectives…………………………………………. 134

5.2.6.3 Preference of Pension Schemes by Occupation…… 135

5.2.6.4 Preference for Payment of Investment

Amount Options………………………………….. 136

5.2.6.5 Preference for Payment Options of Investment

Amount in Three Cities…………………………… 136

5.2.7 Amount Invested Regularly in Pension Scheme………………... 137

5.2.7.1 Amount Invested Regularly in Pension Schemes

By Select Cities of Uttar Pradesh State…………… 137

5.2.7.2 Occupation by Regular Investment in

Pension Scheme…………………………………. 137

5.2.7.3 Regular Investment by Educational Qualifications.. 138

5.2.7.4 Total Monthly Income of Respondents and

Regular Investment in Pension Scheme…………… 139

5.2.7.5 Total Monthly Expenditure of Respondents

and Regular Investment in Pension Scheme………. 140

5.2.7.6 Total Monthly Savings of Respondents and

Regular Investment in Pension Scheme…………… 141

5.2.7.7 Marital Status of Respondents and Regular

Investment in Pension Scheme……………………. 142

5.2.7.8 Age of Respondents and Regular Investment

in Pension Scheme………………………………… 143

5.2.7.9 Gender of Respondents and Regular Investment

in Pension Scheme……………………………….. 143

5.2.8 Level of Fulfillment of Objective in Pension Scheme………….. 144

5.2.8.1 Level of Fulfillment of Investors Objective

in Select Cities of Uttar Pradesh…………………. 144

5.2.8.2 Average Level of Satisfaction of Respondent

in Select Cities of Uttar Pradesh………………….. 146

5.2.9 Factors Discouraging Investment in Pension Schemes………… 147

5.2.9.1 Factors Discouraging Investment in Pension

Schemes…………………………………………. 148

5.2.9.2 Main Eight Factors Discouraging Investment in

Pension Schemes of Select Cities of

xiii

Uttar Pradesh…………………………………….. 149

5.2.10 Problems Faced by Respondents after Investing in Pension

Scheme………………………………………………………... 150

5.2.10.1 Problems Faced by Respondents after Investing

in Pension Scheme of Select Cities of

Uttar Pradesh…………………………………… 150

CHAPTER 6

CONCLUSION AND SUGGESTIONS..…………………………......... .. . . 152

6.0 Conclusion .....................……………………………………………………. 152

6.1 Suggestions……. ..................... …………………………………………….. 156

6.1.1 Following Suggestions Can Be Incorporated By the

Pension Schemes Provider Companies....................................... 157

6.1.2 Suggestions for Pension Scheme Investors.....................……... 161

BIBLIOGRAPHY 163

xiv

LIST OF FIGURES FIGURES

NO.

TOPICS PAGE

NO.

CHAPTER-1

1.1 PENSION PAYMENT OF CIVIL EMPLOYEE AS A % OF TAX

REVENUE AND GROSS DOMESTIC PRODUCTS (SOURCE: WWW.RBI.ORG.IN)

12

1.2 NPS ARCHITECTURE 18

CHAPTER-4

4.1 MAP OF UTTAR PRADESH 55

4.2 MAP OF LUCKNOW 58

4.3 MAP OF KANPUR 60

4.4 MAP OF ALLAHABAD 63

CHAPTER-5

5.1 GENDER WISE CLASSIFICATION OF RESPONDENTS 67

5.2 AGE WISE CLASSIFICATION OF RESPONDENTS 68

5.3 MARITAL STATUS WISE CLASSIFICATION OF

RESPONDENTS 69

5.4 OCCUPATION WISE CLASSIFICATION OF RESPONDENTS 70

5.5 LITERACY LEVEL OF RESPONDENTS 71

5.6 RESPONDENTS PAYING INCOME TAX 72

5.7 INCOME WISE CLASSIFICATION OF RESPONDENTS 73

5.8 EXPENDITURE WISE CLASSIFICATION OF RESPONDENTS 74

5.9 CLASSIFICATION OF RESPONDENTS ACCORDING TO

SAVINGS 75

5.10 PURPOSE OF SAVINGS 77

5.11 PURPOSE OF SAVINGS BASED ON OCCUPATION 78

5.12 PURPOSE OF SAVINGS BASED ON EDUCATION

QUALIFICATION 80

5.13 PURPOSE OF SAVINGS BASED ON MONTHLY INCOME 81

5.14 PURPOSE OF SAVINGS BASED ON AGE OF

RESPONDENTS 82

5.15 PREFERENCE OF INVESTMENT 84

5.16 RANK FOR INVESTMENT ALTERNATIVES IN LUCKNOW 85

5.17 RANK FOR INVESTMENT ALTERNATIVES IN KANPUR 86

5.18 RANK FOR INVESTMENT ALTERNATIVES IN ALLAHABAD 87

5.19 RANK FOR INVESTMENT ALTERNATIVES IN SELECT

CITIES

88

5.20 RANKING FOR INVESTMENT ALTERNATIVES 90




5.24 REASONS FOR INVESTMENT IN PENSION SCHEMES 100

5.25 RANKING REASONS FOR INVESTMENT IN PENSION

SCHEME 102

5.26 RANKING REASONS FOR INVESTMENT IN PENSION 104

xv

SCHEME


SCHEME 106


SCHEME 108

5.29 RANK AND MEAN SCORE OF REASONS FOR INVESTMENT 109




5.33 RANKING BASED ON INFLUENCING FACTORS 124




5.37 SOURCES OF INFORMATION FOR PENSION SCHEMES 130

5.38 PREFERENCE OF PENSION SCHEMES BASED ON

STRUCTURE 133


OBJECTIVES

134

5.40 LEVEL OF FULFILLMENT OF OBJECTIVE IN PENSION

SCHEME

135

xvi

LIST OF TABLES

TABLE

NO.

TOPICS PAGE

NO.

CHAPTER-1

1.1 COVERAGE OF THE INDIAN PENSION NETWORK 11

1.2 ESTIMATION OF AGE WISE POPULATION 19

CHAPTER-4

4.1 RANK OF TOP FIVE DISTRICTS 52

4.2 DEMOGRAPHIC PROFILE OF RESPONDENTS 64

CHAPTER-5

5.1 RESPONDENTS FORM EACH CITY 67

5.2 GENDER WISE CLASSIFICATION OF RESPONDENTS 67

5.3 AGE WISE CLASSIFICATION OF RESPONDENTS 68

5.4 MARITAL STATUS WISE CLASSIFICATION OF

RESPONDENTS 69

5.5 OCCUPATION WISE CLASSIFICATION OF RESPONDENTS 69

5.6 LITERACY LEVEL OF RESPONDENTS 70

5.7 RESPONDENTS PAYING INCOME TAX 71

5.8 INCOME WISE CLASSIFICATION OF RESPONDENTS 72

5.9 EXPENDITURE WISE CLASSIFICATION OF RESPONDENTS 73

5.10 CLASSIFICATION OF RESPONDENTS ACCORDING TO

SAVINGS

75

5.11 PURPOSE OF SAVINGS 77

5.12 PURPOSE OF SAVINGS BASED ON OCCUPATION 78

5.13 PURPOSE OF SAVINGS BASED ON EDUCATION

QUALIFICATION

79

5.14 PURPOSE OF SAVINGS BASED ON MONTHLY INCOME 80

5.15 PURPOSE OF SAVINGS BASED ON AGE OF

RESPONDENTS 81

5.16 PREFERENCE OF INVESTMENT 83

5.17 RANK FOR INVESTMENT ALTERNATIVES IN LUCKNOW 85

5.18 RANK FOR INVESTMENT ALTERNATIVES IN KANPUR 86

5.19 RANK FOR INVESTMENT ALTERNATIVES IN ALLAHABAD 87

5.20 RANK FOR INVESTMENT ALTERNATIVES IN SELECT

CITIES 88





5.25 TOP FIVE INVESTMENT ALTERNATIVES IN SELECT CITIES 93

5.26 INVESTMENT ALTERNATIVES BASED ON OCCUPATION 94

5.27 INVESTMENT ALTERNATIVES BASED ON EDUCATIONAL

QUALIFICATIONS

96

5.28 INVESTMENT ALTERNATIVES BASED ON MONTHLY

INCOME 97

5.29 REASONS FOR INVESTMENT IN PENSION SCHEMES 99

xvii


SCHEME

101


SCHEME 103


SCHEME 105


SCHEME 107




5.37 REASONS FOR INVESTMENT IN PENSION SCHEME IN

SELECT CITIES 112


5.39 REASONS FOR INVESTMENT BASED ON OCCUPATIONS 115

5.40 REASONS FOR INVESTMENT BASED ON EDUCATIONAL

QUALIFICATIONS 117

5.41 REASONS FOR INVESTMENT BASED ON AGE 118

5.42 RANK BASED ON INFLUENCING FACTORS 120







5.49 TOP TEN FACTORS FOR SELECTION OF PENSION

SCHEMES IN THREE CITIES 127


5.51 SOURCES OF INFORMATION FOR PENSION SCHEMES 129

5.52 SOURCES OF INFORMATION BASED ON OCCUPATION 131

5.53 SOURCES OF INFORMATION BASED ON EDUCATIONAL

QUALIFICATIONS

132


STRUCTURE

133


OBJECTIVES

134


OCCUPATION

135

5.57 PREFERENCE FOR PAYMENT OPTIONS 136

5.58 PREFERENCE FOR PAYMENT OPTIONS IN SELECT CITIES 136

5.59 AMOUNT INVESTED REGULARLY IN SELECT CITIES 137

5.60 REGULAR INVESTMENT BASED ON OCCUPATION 137

5.61 REGULAR INVESTMENT BASED ON EDUCATIONAL

QUALIFICATIONS

138

5.62 REGULAR INVESTMENT BASED ON MONTHLY INCOME 139

5.63 REGULAR INVESTMENT ON TO MONTHLY EXPENDITURE

140

5.64 REGULAR INVESTMENT BASED ON MONTHLY SAVINGS 141

xviii

5.65 REGULAR INVESTMENT BASED ON MARITAL STATUS 142

5.66 REGULAR INVESTMENT BASED ON AGE 143

5.67 REGULAR INVESTMENT BASED ON GENDER 143

5.68 LEVEL OF FULFILLMENT OF OBJECTIVE IN PENSION

SCHEME 144

5.69 SATISFACTION LEVEL FOR PENSION SCHEMES 146

5.70 FACTORS DISCOURAGING INVESTMENT IN PENSION

SCHEMES

148

5.71 FACTORS DISCOURAGING INVESTMENT 149

5.72 PROBLEMS FACED BY RESPONDENTS AFTER INVESTING 150

Introduction

Ph.D. Thesis by Sapna Singh

1

Chapter 1

INTRODUCTION

1.0 Preamble

The thesis focuses and seeks to identify the perception, attitude,

behavior and factors influencing the prospective and current

investors regarding the use and usefulness of different pension

schemes for old age security.

1.1 Need for Present Work

India is an emerging economy and if it wants to continue its growth,

fight with poverty, reduce inequalities, remove corruption and

increase productivity (Planning Commission, 2008), it’s necessary for

the government to provide a social safety. Otherwise, people will

unable to fight with poverty because of income reductions involves

due to social reason, medical reason, injury, and ageing (Krishna,

2010). India is facing problem of increasing informal sector,

financially deprived people, non-educated and mobile population. To

implement the social safety nets such as a pension system for a large

population (Hussmanns, 2004). There is a need to implement

Pension reform. Although it is difficult and challenging in terms of

second generation economic reforms (Jenkins and Khilnani, 2004;

IIEF, 2011), to implementing pension reforms it is necessary for the

central government to provide solutions in terms of innovative policy.

Introduction


2

An Indian economy is growing rapidly and it is one of the fastest

growing economies in the world, but the socio-economic development

of the country affected due to the vast structural problems.

Unemployment is the main issue and 80% employee of total work

force involved in the informal sector. The saving pattern for

retirement is not up to the marks and most of the people depend

upon their family after retirement, but in current scenario family

support is less reliable at retirement due to migration of young

generation from native place and decreasing trend in fertility.

Population of 60+ age people increasing rapidly and better medical

facility increased Longevity has increased rapidly. While the people of

60+ years of age are the fastest growing segment. Nearly every 8th

elderly person of the world lives in India. Most of the elderly people

live in India are not covered by any formal pension system. Most of

them depend upon their own earning as well as money gets from

their children. This type of informal system is unable to provide

satisfactory old age financial security and becoming increasingly

strained. The annual growth rate is 3.8% for the over 60 age group. It

was 55.3 million in 1991 and 75.9 million in 2001 (Swarup, 2013).

So, this shows the need to increase the pension coverage for the

workers of informal sector.

1.2 Objective of the Present Work

The thesis studies and examines the prospective & current investors

perception, preferences, attitude and factors toward the different

Introduction


3

pension schemes as an investment product as well as to fulfill the

need of old age security with specific reference to Uttar Pradesh’s

three major cities i.e. Lucknow, Kanpur and Allahabad.

1.3 Introduction to Pension System

Pension is a welfare method to provide financial security during old

age. People gets pension after completing required number of year

services. Its payment starts after retirement on monthly basis and

end on the death of the person. So that, pension provides long term

income benefit in non-working years. It serves the purpose of

independence and secures the life from financial risk & poverty.

Modern method for pension is matured in the United Kingdom.

Initially pension was optional and depends on individual to

individual. The formal system for pension developed during 1713 for

public sector employee of custom department in United Kingdom

named as superannuation fund. In 1810, pension scheme was

founded for the civil servants of British Government by Parliament

(Sanyal and Singh, 2013). In United Kingdom, a state based pension

scheme was proposed during 1880. At the start of twentieth century,

developed countries proposed two types on pension schemes. First

for state based and second based on occupation. The coverage of

pension schemes was low due to the majority of workers working in

the informal sector.

The question arises that how can we provide pension. The pension

can be delivered in two ways. The first method is Pay As You Go, in

Introduction


4

this method the young workers paying pension for retired workers.

They want same treatment from their younger’s during old age. This

type of system doesn’t require any funding and adopted by many

countries. The second method, each and every person belonging to

different generation contributes income to a fund for a specified

period of time. The return based on the contribution is utilized for

payment of pension.

In the above methods, two things is common i.e. one is time and

other one is risk. The reason is that both involve the transferring of

money from post-retirement to post-retirement. This involves risk of

receiving less pension amount as compared to actual planning.

There are three types’ methods given as follows for pension: (1) the

defined benefits plan, in this plan person gets prior information of

benefits prior to accepting the plan. (2) The defined contributions

plan, in this plan each contributes for their regiment. In this method

contribution is fixed and pension is in the form of annuity based on

the returns on the investment. (3) The notional defined contribution

plan, this method is same as defined contribution method. The

contribution is fixed and based on earnings. The returns are based

on gross domestic product of the country (Holzmann and Edward,

2006).

In the literature three methods are discussed (Pordes, 1994). In the

first method the social security system is funded by state. This

method is classified in two ways and given as follows: (i) Universal

Introduction


5

pension, in which all the citizens are gets pension benefits. (ii)

Pension is based on following means test i.e. income, retirement from

paid employment etc. The first method is social security tax raised by

government and paid as pension. This is like defined benefit plan but

some countries are following notional defined contribution plan.

The second method defined in terms of occupational pension

schemes. The employer is sponsoring the pension. These methods are

funded by the employer as well as workers. The pension payment is

paid from the fund on the retirement. This method is same as defined

benefit method but its different version is based on individual

retirement account.

The third method is based on additional savings. In this method,

other assets are used for retirement benefit. After retirement, a

person can sell or rent their homes for this purpose. Individuals can

also join another work after retirement.

1.3.1 Indian Pension System

In India context, it has a long traditional old age financial support.

Old age security concept started in 3rd century B.C. In Sukraniti

defined that a king will pay half of the earnings for the people those

will serve for forty years (Gayithri, 2007). During the British colonial

rule in 1981, the civil service pensions were defined by the Royal

Commission. The further provisions made for pension in Government

of India Acts defined in1919 and 1935 made. These schemes also

adopted for public sector workers. After independence, to include

Introduction


6

private sector for pension benefit several provident funds started

(Goswami, 2001).

Pension schemes in the Indian context given as follows:

1) Pension schemes for civil service employees

2) Employee’s Provident Fund Organization Schemes (EPFO)

3) Pension schemes based Occupation

4) Public Provident Fund

5) National Old Age Pension Scheme

6) National Pension Scheme

7) Micro-pensions and other schemes

The details of different schemes given as follows:

1. In civil service pension, it includes the employee of both i.e. central

and state government. The pension payments are based on defined

benefits plan and depend on the final salary and paid from the

current revenues of governments. Currently these schemes are

changed from defined benefit plan to defined contributory plan for

the new employees.

2. Employee’s Provident Fund Organization (EPFO), the Employees’

Provident Fund (EPF) started in 1951. It was amend in 1952. EPFO

manages the fund; it also provides different schemes i.e. pension and

insurance for organized sector workers. EPFO is the world’s largest

organizations to mange clients and huge volume of transactions. The

EPFO assist the board and provides three schemes given as follows:

Introduction


7

a. Employees' Provident Fund Scheme (EPFS), 1952, mandatory

saving scheme.

b. Employees' Pension Scheme (EPS), 1995, it provides pension to

different members.

c. Employees' Deposit Linked Insurance Scheme (EDLIS), 1976, it

provides insurance benefits during death.

The EPFO covers workers based on monthly earnings of i.e. Rs. 6,500

or less in an origination where twenty or more staff members.

3. Pension based on occupation; in the public sector origination

pension provides in the same as civil servants. Now system is

changing from defined benefit to defined contributory. The private

sector origination is also contributing in these occupational schemes.

The pension payment method of varies from organization to

organization. The organization manage the pension fund itself or

jointly with pension providers.

4. Public Provident Fund (PPF), PPF started in 1968 and it is a

voluntary tax saving defined contributory saving option in their

personal accounts. The benefit of this scheme is taken by all the

citizens other than non-resident Indians. The main objective of this

scheme is to save income tax. The minimum maximum contribution

is defined. A person can withdraw from sixth year. The loan can also

avail form third year to fifth year.

5. National Old Age Pension Scheme, the scheme was launched in

1995 for poor people more than 65 age. The Rs. 200 amount per

month is contributed by the central government as well as

Introduction


8

contribution by the different state governments. In 2011, the age was

reduced from 65 to 60 years and also the central government

contribution increased from Rs. 200 to Rs. 500 for the person age

above 80 years.

6. National Pension Scheme (NPS), it is evolved after 2003. National

pension scheme was started for new employees who join service after

January1, 2004. Its origin is based on the report of Old Age Social

and Income Security committee (GOI, 2000), Working Group’s report

(GOI, 2001) and Expert Group’s report (GOI, 2002). These reports

recommended forming a Pension Fund Regulatory and Development

Authority (PFRDA) and PFRDA bill in introduced in Parliament in

2005. Initially this scheme was for government employee but later in

year 2009, it is opened for all citizens. In 2009, a new scheme

introduced i.e. voluntary savings in which individual can withdraw

their savings according to their needs. To increase the coverage of

NPS, another new scheme named as NPS-Lite was started. These all

schemes are based on contribution of individual and not ensure for

guaranteed pension. Till May 2013, 4,90,988 persons have

subscribed to NPS. Out of these numbers of persons, more than fifty

percent belonging to government services for which NPS is

mandatory. For involving the unorganized sector in NPS, the

government initiates new scheme named as swavalamban, in this

scheme government made contribution of Rs. 1000 per annum for

the financial year 2010-11 and 2012-13.

Introduction


9

7. Micro-pensions and Other Schemes, it is provided by the

microfinance institutions. Micro-pensions development is based on

the working of micro finance instructions and working of non

government organizations. The schemes provided by them are based

on specific needs of individual groups in exchange of small

contributions. Self-Employed Women’s Association (SEWA) is the

successful example of Micro-pension. 50,000 women are talking

benefits of SEWA’s micro-pension scheme. This scheme is achieving

its goal because it is targeting on specific groups i.e. economically

weaker section not the masses. Other schemes are based on the

saving offered by banks, and schemes provided by insurance

companies. Which will provides the dual benefit of insurance as well

as pension.

1.3.2 Coverage and Size

Majority of pensions payments are largely financed from current

revenues for government organization or the participation of

employee and employer in formal organization. Due to this reason,

only 24 percent of the working individual getting benefits of pension

provisions and most of them are from organized sector (Sanyal and

Singh, 2013). Majority of workforce are belonging to the unorganized

sector and not getting any benefit of formal pension system for old

age financial security. It is calculated that in 2001, near about 8.2

percent of population was above 60 (Sanyal and Singh, 2013). The

existing pension system contains a small segment of people. The

Introduction


10

coverage of population by the existing pension schemes are shown in

Table 1.1.

Indian government pension liability on the civil servants was around

2.6% of Gross domestic product in year 2012-13 as shown in Figure

1.1. Pension bill of Indian Government was around 0.68% percent of

Gross domestic product in year 2007-08, 1.17% in year 2009-10 and

0.91% in year 2011-12. For year 2012-13, pension liability was

budgeted around Rs. 814.65 billion and around Rs. 862.9 billion in

year 2013-14. The state governments also facing the same problem

and their pension expenditure in year 2012-13 is budgeted around

Rs. 1,404 billion i.e. 1.7% of Gross domestic product.

1.3.3 Need to Increase the Growth and Coverage of Indian

Pension Market

The low coverage of pension schemes is due to the factor that

schemes are compulsory for central government employees and v

voluntary for others. Pension reforms started in India after 1991 but

major imitative taken place in year 2003. Three major initiatives

given as follows: The change in the scenario for pension in 2004 for

government employees, the implementation of new pension scheme

for all people and the induction of new NPS-Lite scheme for the poor

people that contains small savings.

Introduction


11

Scheme Year Coverage in Millions

EPFO1 2012-13 85.5

2013-14 86.2

Civil Servants2 2012-13 2.6

2013-14 2.5

State Government3 2012-13 7.4

2013-14 7.0

Local Bodies4 2012-13 2.1

2013-14 2.0

Central Government Autonomous Bodies5 2012-13 3.5

2013-14 3.1

State Government Autonomous Bodies6 2012-13 2.4

2013-14 2.1

Defense7 2012-13 1.3

2013-14 1.6

P.P.F.8 2012-13 1.0

2013-14 1.2

NPS (excluding 2-6)9 2012-13 2.2

2013-14 2.8

NOAPS10 2012-13 2.2

2013-14 2.9

Formal Sector coverage outside EPFO11 2012-13 5.0

2013-14 5.8

Micro-pension and other Private pension12 2012-13 2.1

2013-14 2.6

Total 2012-13 117.3

2013-14 119.8

Table 1.1 : The Coverage of Pension

The data collected form the following source: (1) EPFO Annual Report, 2012-13,

2013-14; (2) (3)(4)(5)(6) www.mospi.nic.in; (7) The World Military Balance, 2013-14;

(8) Stelten (2014); (9) www.pfrda.org.in; (10) The Estimated of NSSO 61st Round

and Tendulkar Report; (11) Stelten (2014); (12) Stelten (2014).

Introduction


12

Figure 1.1 : Pension Payment of Civil Employee as a % of Tax Revenue and

Gross domestic products (Source: www.rbi.org.in)

The current contributory new pension system covers very small

portion of informal workforce. The NPS is not getting success to

involve those people that are unable to save money for old age

security. Financial knowledge required to understand the new

pension system is also inadequate. Thus, new pension system is not

achieving its goal. Considering these reasons the NPS getting slow

response so far, cause majority of customers from the government

organization, for whom NPS is mandatory (Sanyal et. al., 2011). The

new pension system not provides any guarantee to get minimum

pension, so its objective to provide of welfare is defeating. So, there is

a need to improve NPS, which can ensure minimum pension and

cover large population and also reduce fiscal cost of India & increase

the growth of Indian pension market.

Introduction


13

1.3.4 The National Pension System & Its Provisions

In this sub-section we are describing about the new pension system,

its infrastructure and implementation issues. In India ageing

population is growing rapidly. So, there is a need to provide the

financial security at old age. In 1998, the Ministry of Social Justice

and Empowerment formed the Committee for Old Age Social and

Income Security to address the financial issue of old age. The Old Age

Social and Income Security committee focuses on 3 issues:

1. The pension liability for government employees was unaffordable.

2. The current system for private workers was not satisfactory to

provide pension at old age.

3. There are no provisions for informal sectors workers to avail the

pension.

A committee is formed to look these problems and made their

recommendation for the solutions in their report, Old Age Social and

Income Security (Dave, 2000). The committee recommended that

there is a need of contributory system that buildup wealth for

pension provisions. Shah (2006) summarizes the key points for the

development of new system. These points are given as follows: (1) To

increases the coverage of pension; (2) It should be affordable for

individual; (3) It should be in the reach of every required individual;

(4) Investment should be based on requirement and choice; (5) It

should be covered by regulatory framework; and (6) It should be

Introduction


14

sustainable in long-run. Old Age Social and Income Security

committee name as National pension system for implementation.

The National pension system started in 2004, and grown to assets of

around USD 7 billion and around 6 million accounts. It is

implemented as a mandatory for government employees and

voluntary for others.

The new pension system divided in different schemes and there is

lack of choice for investor to maximize their investment. The Second

point is that, there is transparency difference between new pension

scheme and Employees Provident Fund Organization. So, there is

need to clearly defined transparency issues of new pension scheme.

Third issue is inconsistent tax saving provisions. These issues makes

new pension system unfavorable in compare to old system.

In addition to these factors some other factors such as fees charged,

the gap between current new pension system and originally defined

new pension system. There is a need to adopt the new pension

system in such way that it covers the original recommendation of Old

Age Social and Income Security report. There is a need to focus on

these issues such as payout policies should be clear and need to

develop pension systems based on occupation that will focus on

informal sector for the development of intuitional framework of new

pension system.

The key issue has been the lack of mechanism for regulation. There

is a need to define independent mechanism for regulating the

Introduction


15

pension system. For achieving this purpose Pension Fund Regulatory

Development Authority bill passed in 2013. This makes Pension

Fund Regulatory Development Authority, an independent regulator

for regulating new pension system. Pension Fund Regulatory

Development Authority working on issue that makes new pension

system as defined in Old Age Social and Income Security report. It

long term goal is to provide universal pension that can reach to every

individuals.

The Implementation

In 2002, Government of India decided on the basis Old Age Social

and Income Security report that new employs those recruits from

first January 2004 onward will get pension benefit through new

pension scheme. The employer and employee contribution set 10%

for each in the employees new pension scheme account every month.

The new pension scheme is implemented in the following bodies as

on March 2014: In all the accounting formations of India

Governments, and majority of central autonomous bodies. Till March

2014Twenty five State Governments implemented the new pension

scheme provisions (Department of Financial Services, 2014).

In August 2003, the Department of Economic Affairs notified a

regulator for monitoring the working of new pension scheme, before

the start of the working of the new pension scheme in January 2004.

Finally, the pension fund regulatory development authority bill

Introduction


16

presented Indian Parliament and passed by in 2005, and was finally

passed by Parliament in 2013 (Dave, 2006).

In April 2009 the new pension scheme was open to all citizens on a

voluntary basis. Specific to informal sector in April 2010, a different

scheme offered named as NPS-Lite. In respect to NPS-Lite, a different

scheme launched named as Swavalamban for the worker of informal

sector for each financial year, where government will contributes

1000 Rs. in worker account, those contribute minimum 1000 Rs. in

their NPS-Lite account. The non government organizations and non-

banking companies named as aggregators in this scheme are eligible

to perform different functions. In December 2011, the corporate

model of new pension scheme was launched for the employees of the

corporate sector including undertakings of public sector (Renuka,

2014).

New Pension Scheme Infrastructure

New pension scheme (NPS) started in 2004 for new recruits of

Government of India services. Although PFRDA Bill not passed by the

parliament of India in 2004. The bill includes the process and

procedure for the private contracts between the different institutional

parties involved in the future pension system. The following parties

involved in the future pension system:

a. Points of Presence (PoP) There are two types of PoP. One for

central government departments and bodies i.e. PoP-SP & PoP for

others.

Introduction


17

b. A Central Record-keeping Agency (CRA) to maintain the records.

c. Pension Fund Managers (PFMs) for margining the funds.

d. A Custodian for this purpose.

e. The flow of funds will be mange by the Trustee Bank between the

government and the central record-keeping agency.

f. To access and monitor the working of the PFMs, Custodian and

Trustee Bank. A new pension scheme (NPS) trust is created under

the Indian Trusts Act, 1882 for this purpose.

g. Annuity will be provided by different service providers.

Contributions of employee are sending from the POPs to the Trustee

Bank. The Trustee Bank sends this money to the respective PFMs.

Who will invest this money according to guidelines and procedures

given by the pension fund regulatory development authority. The role

of Trustee Bank is important for the flow of funds between the

different stakeholders. At the time of retirement, it is mandatory for

the investors to buy an annuity product from the any one annuity

service providers notified by the pension fund regulatory development

authority. There are two different kind accounts defined in new

pension scheme with different restrictions. The first one is Tier-I

account, it does not allow withdrawals till retirement age and second

one is Tier-II account, it does not holds any restriction for

withdrawals. If a person wants to open Tier II account, it has to open

Tier I first. Tire-I account for the employees working in the

government sector. The government employee can also contribute in

Tire-II account after fulfilling the Tire-I contribution.

Introduction


18

Figure 1.2 : NPS Architecture

1.4 The Reasons of Growing Pension Market

If we can increase the coverage of pension market or can provide the

pension to everyone. It means to say that peoples those qualifying age

i.e. 60 and 60+ will be eligible for receiving pension. The UNDESA

calculated the future population in 2010. Estimation of population

from year 2010 to 2050 periods is given in the Table 1.2 for every five

year intervals.

Introduction


19

Year 60+ 61+ 62+ 63+ 64+ 65+ Total

Population

No. % No. % No. % No. % No. % No. %

2010 93 7.6 86 7.0 80 6.5 73 6.0 67 5.5 60 4.9 1225

2015 113 8.7 105 8.0 96 7.4 88 6.7 79 6.0 70 5.4 1308

2020 136 9.8 126 9.1 117 8.4 107 7.7 97 7.0 87 6.3 1387

2025 160 11.0 150 10.3 139 9.5 128 8.8 117 8.0 106 7.3 1459

2030 188 12.3 175 11.5 163 10.7 151 9.9 138 9.1 126 8.3 1523

2035 217 17.7 203 16.6 189 15.5 176 14.3 162 13.2 148 12.1 1225

2040 250 15.4 234 14.4 219 13.5 203 12.5 187 11.5 172 10.6 1627

2045 286 17.2 268 16.1 251 15.1 233 14.0 216 13.0 199 11.9 1665

2050 323 19.1 304 18.0 285 16.8 266 15.7 247 14.6 228 13.5 1692

Table 1.2 : Estimation of Age Wise Population*

*No. denotes in million and % values in terms of total population.

Literature Survey


20

Chapter 2

LITERATURE SURVEY

The factors influencing a person to collect wealth can be immense. It

basically depends on the need of the person who has to accomplish

the set targets and goals of his life. Accumulation of wealth assures

the person that he would not have to face any adversity at the old

age. There are many issues that drive the investors to get involved in

the investment planning such as life expectancy, requirement of

income and possible expenditures, policies related to taxation etc. are

also important that affect planning retirement policy to meet the

future requirement. Since life expectancy has risen in past 30 years

and amounts to increase 2-3 years more than expected per decade

and further continues to grow throws our focus on planning the

retirement and meeting the needs of life (Selene, 2005). People get

involved in some or the other financial planning as the basic nature

of human is to save little for the future purposes. This may be

strategized according to the earnings and the requirements of person.

Seeing life expectancy growth planning of retirement becomes

important though people are not so serious about this matter till

their mid- life because they are busy meeting their other important

expenses (Grace, Weaven and Anderson 2008). Planning for

retirement must start early then only it can be strategically

implemented to serve its basic purpose. The living standard and the

expenses are the key factors which govern the investment patterns of

Literature Survey


21

the investors since the taxation laws regarding change brings

confusion in the mind of investors and also the future is uncertain,

the perception comes in as spending in retirement policies is less

beneficial (Selene, 2005). People accumulate wealth because of their

income so income is the primary source of collecting wealth so it

needs to be earned so that it is invested (Selene, 2005). Income can

be controlled by the individuals to some extent but the external

factors lay pressure on the income levels because future being

unpredictable and any unplanned expense can come in front of a

person. Since accumulation of wealth can be planned but it cannot

be perfect so it gives room for retirement planning and financial need

may vary depending on the gender so the gender perspective is also

important in retirement planning. Therefore, it is important to

explore and contrast the issue of financial retirement planning

from the perspectives of both male and female consumers.

Savings behavior associated with retirement planning has often been

explored in the context of retirement behavior theories. Commonly

used theories are associated with the individual choice perspective,

life course perspective and cumulative advantage perspective. In

relation to individual choice, retirement is viewed as a stage in life

which is planned and worked toward by the individual. Furthermore,

the road to retirement can be designed in accordance with the

individual’s preferences for abrupt work termination or for a gradual

withdrawal from the workforce (Ekerdt et. al., 2001).

Literature Survey


22

In contrast to individual choice theory, Retirement planning is

affected by the factors such as the experience, age, education,

gender, income, etc. which can be an opportunity or constraint which

influence the retirement planning (Devaney and Haejeong, 2003;

DeViney, 1995). Therefore, anticipating the retirement depends on

the situational approach towards their future life (Ekerdt et. al.,

2001).

Cumulative advantage theory states that advantages and

disadvantages are based on previous successes and failures of a

person which is also closely related to human capital model.

According to this model investment in oneself results in higher

income and therefore increases retirement options (Angela, 1996;

Garry, 1975). Although this theory is contradicted by the real issues

such as females’ of similar education levels, capabilities and

experience are often paid less than man (Devaney and Haejeong,

2003). However it is argued by Ekerdt et. al. (2001, p. 162),

“regardless of the way that retirement behavior is theorized, there is a

meta-model of older workers that assumes they are on a path to

retirement, holders of plans and preferences”.

Consumer decision making theory is another way in which

behavior of individual’s could be understood concerning retirement

planning. Financial products influence the decisions regarding

financial planning for future retirement. This is appropriate relating

to financial planning for retirement which is directed toward pension

Literature Survey


23

funds and other savings schemes. Consumer decision-making theory

states the process of decision making as the one which starts with

the need recognition, and evaluation of various alternative products

and thorough searching before purchase of any investment (Dewey,

1933). Needs are recognized when there is difference between actual

and desired states and it is enough to motivate an initiation action in

order to correct the differences (Hill, 2001). In the case of retirement

planning or superannuation, need recognition is difficult because one

can realize his need over a period of time and when the individual

reaches his age of retirement this difference becomes apparent and it

is not easy then to rectify it.

Further it is important to analyze how decision- making of consumer

changes when the decision to get into a product category such as

superannuation becomes necessary, such as in Australia where in all

employees must contribute minimum to 9% to their superannuation

funds. When government policies are applicable it diminishes the

need recognition by the consumer and also the prospective investors

don’t go through the stage of the decision-making process (Dewey,

1933), also the consumer is not motivated to search other options,

this happens because need recognition occurs at social level rather

than individual level ultimately policy decisions in relation to the

financial retirement plans must be contained within economic theory,

and the theories of human behavior have not been considered

relating to the consumers such as stakeholders associated with

consumption have been ignored.

Literature Survey


24

Investors and Financial Planning for Retirement

Investors get confused and are often disinterested about financial

products including retirement planning (Vidler, 2004). Contribution

to pension plans is not preferred by many investors than value in

paying off their debts. Young investors (aging from 18 to 24 years) do

recognize to plan their retirement fund, so this behavior does not

result into appropriate savings (Webster, 1997). Age of the investor is

such an obvious variable that has a significant impact on financial

planning for the purpose of retirement also not of less importance is

the gender of the investor. Because of the social and economic

changes working conditions and patterns have changed and affect

men and women in their own ways in recent decades (Weagley and

Eunjeong, 2004).

Individuals tend to accumulate retirement wealth depending on their

gender experiences In particular show that different working patterns

are followed by men and women throughout their lives which

influences their ability to accumulate wealth. For example, now

women are equally significant contributors at work places as men but

according to research more than half of working women do not

contribute to any retirement plans. However, women who contribute

do not contribute at par as males but less than them because of

breaks in their careers (U.S. Department of Labor, 2007). While this

could be questioned, that this is not the case in Australia where it is

compulsory to contribution for superannuation (pension) by all

Literature Survey


25

workers. Women’s are more comfortable in the part-time/casual

employment sector because of their family issues and non

employment issues for a long period affect the sum of amount

accumulated at the time of retirement as retirement fund.

Previous researches show that men and women do differ significantly

in the area of financial decision making. For example, women chose

less risky investment options than men and their investment

decisions differ significantly. Investment decision differ in women as

they prefer investment vehicle with low risk and men on other hand

are much more capable in taking financial risks because they have

an upper hand in the family decisions (Sunden and Brian, 1998) and

are more informed about the financial choices which is also termed

as financial expertise in men. Financial expertise or financial literacy

is another different aspect related to gender. Studies show low

financial literacy in women allover which makes it appear that

women are significantly low in their financial knowledge than men.

(Euwals, Angelika and Axel, 2004). Worthington (2005, 2006), earlier

researches show that there is a significant difference in both men

and women regarding financial decision making and it was also

acknowledged that women show low score in their financial

knowledge and low overall information of retirement funds than men.

Knowing this it becomes obvious that men have more confidence and

competence to take financial decisions regarding personal loans,

stocks and bonds insurance in contrast to women who are much

comfortable and convinced with the financial management taken as a

Literature Survey


26

whole (Chen and Ronald, 1998). Women rely on their spouses

basically for financial decisions and don’t see themselves as separate

individual regarding their life decisions. So they pay little attention to

their decisions including any retirement plan. Women prefer

combined retirement rather than separate offers (Selene, 2005). For

example, women spend most part of their life in child rising without

payment and also have irregular job life which makes them

financially dependent on their spouse income for all needs

irrespective of its financial nature which can be future or immediate

financial need (Jefferson and Alison, 2005). This Makes men more

confident in financial dealing and gives higher freedom of actions to

them in situations where men have to exhibit being financially wise

than women who experience, while women experience a related

sense of jealousy and deficiency (Furnham and Michael, 1998).

Grace et. al. (2010), planning for the superannuation is examined

with reference to individual choice of life course and cumulative

advantage perspectives and also studying investors’ behavior

theories. Retirement planning is dealt with point of both men and

women. The behavioral aspect of investor is examined by dealing with

perception of retirement. In-depth information was gathered by

adopting a qualitative research design in context to real life in order

to form a theory. 21 semi structured exploratory interviews were

conducted to aid in the identification and the description of the

various feelings and thoughts that both female and male customers

have regarding the financial retirement planning. The 21 in-depth

Literature Survey


27

interview findings show that perspectives differs gender wise

regarding retirement planning. Males are driven towards perspective

of individual choice wherein assumption comes that retirement is

ought to be next stage in individuals life where lifestyle is

contributing to the present standards of living. Women basically go

on the life course viewpoint where the life is not dependent on the

presumptions and assumptions about the future stages in life but be

the one who consider the circumstances of one’s’ life dependent to

outcomes. To enhance the value of research, methodology of

perceptual mapping was considered and analysis was done thus

giving the knowledge about the behavior and attitude of investors

towards financial retirement planning.

Beck's (1984), findings show that people who were more motivated for

retirement programs planning were the economically and socially

advantaged worker who could have easily got opportunity to get into

such programs. It was found that people benefitting most from the

retirement preparation programs were the older workers and those

who were less educated, with low occupational status, no pension

scheme coverage, and consequently with low retirement income.

Everyone does not get actively involved in any schemes how so ever

the scheme may be for them only (Hayes and Marcie, 1993).

Fillenbaum et. al. (1985), stated that the real motivation to plan

retirement comes from perception of adequacy of individual income

by high income group people to take action in maintaining their

Literature Survey


28

status quo as regards to the standard of living and expenditures in

retirement. People with low income don’t foresee changes in their

living standards and those who come under middle class feel trapped

in planning retirement or any other financial investment because

they are always in condition of hand to mouth and with very less

savings.

Richardson and Keith (1989), found out that the age and income

were one of the most important predictors of financial planning.

People reaching the time of retirement got more involved in

investments or savings. The family responsibilities and life cycle

affects the individual’s ability to plan and invest in any investment

option. Regular expenses such as raising children, paying home

mortgages and the liabilities of family are firstly met before planning

retirement and the left over resources are only freed for retirement

savings. Attitudes differ from planning retirement or socioeconomic

indices such as seriousness towards retirement may be of less

importance for preretirement planning.

Numerous studies suggest that preparation for retirement typically

increases with the age and older age groups show greater interest in

financial preparation for retirement (Evans, David and Raymond,

1985; Kilty and John, 1986). Anticipatory planning must be started

early approx fifteen years prior to actual retirement, but such process

is not very familiar in the United States and also among professional

(Kilty and John, 1986; Block, 1984). Moreover, occupational

Literature Survey


29

employment provides low rates of pension coverage, job mobility and

the possible retirement income is influenced by level of income or

wages earned by labor force who work as labors most of their life

(Rix, 1993).

Malroutu et. al. (1995), to examine the effect of the socio

demographic factors, data from the 1989 Survey of Consumer

Finance was used, work related, human capital, and objective

variables were cheeked on the perceived adequacy of the retirement

income of the pre-retirees. After adding subjective variables to the

analysis, pre-retirees' perception was positively related to planning to

save within 5 years with of having adequate retirement income.

Gender differences studies show that in retirement planning men as

compared to women are financially soundly prepared to leave the

workforce (Glass et. al., 1998a; 1998b). Beyond the economic factors

that contribute to gender differences in savings, different

psychological accounts have been advanced to explain why women

are more poorly prepared. Specifically, compared to men, while

making financial decisions women tend to bear less risk (Powell et.

al., 1997; Sunden and Brian, 1998), and overlook the essence of

retirement planning treating it as less important (Kragie, Martin and

Marilyn, 1989). Furthermore, it has been suggested that women often

view financial planning as being a male’s responsibility (Glass et. al.,

1998b).

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Joy and Douglas (2005), designed to complement that line of work by

exploring the extent to which demographic factors (age, income

gender, and educational background) are related workers’

perceptions of financial stability in retirement. Results revealed that

demographic variables were associated with individuals’ perceptions

of how difficult it will be to fund their retirement, and perceptions of

the importance of income from personal savings, pension plans,

Social Security, and family members. Findings are discussed in

terms of how perceptions of income are related to income patterns

experienced by current retirees. All together, the results show that

the need to develop public policy initiatives and tailored retirement

intervention programs is that it meets the needs of subgroups of

workers.

Several studies have shown that savings tendencies are positively

related to income (Bassett et. al., 1998; Grable and Lytton, 1997;

Glass et. al., 1998a). Many younger individuals report they lack

“extra” money to save for retirement (Devaney and Su, 1997), a

finding that is consistent with the significant positive correlation

between age and income (Hayslip et. al., 1997). Moreover, less-

educated individuals (Hayslip et. al., 1997) and women (Rix, 1990)

typically earn lower pre-retirement salaries than more-educated

individuals and men, which limits the likelihood of contributory

retirement savings among members of the former two groups. This

implies that those with the lowest level of income (and thus, those

who are the least likely to save) are young women with limited

Literature Survey


31

educational backgrounds. Income has also been linked to

participation in employer-sponsored retirement savings programs

(Basset et al., 1998; Gale and Scholz, 1994). Specifically, Francis

(1998), found that those in lower income brackets can expect to

receive minimal support from 401(k) plans, whereas those in the

highest brackets can expect to receive substantial support from this

source.

The estimates of Wiatrowski (1993), showed that the percentage of

Americans who were supported by pension plans would have

increased from 55 percent in 1988, to 88 percent at the end of the

year 2018.

This increase in coverage would appear to be a positive step toward

improving the financial stability of many future retirees. It is

important to note, however, that this predicted change in coverage is

not because there will be an increase in the absolute number of

pension programs available. Rather, the change occurs due to a

substantial increase in coverage from the existing pension programs

as the end result of an influx of women who entered the workforce

during that 30-year period (Wiatrowski, 1993). Because defined

benefit pension programs typically determine payouts based on

preretirement income levels and length of employment, individuals

who change jobs (Wiatrowski, 1993) or have discontinuous work

histories (Rix, 1990) can expect to receive smaller benefits. Therefore,

women those who are covered by these types of plans are expected to

Literature Survey


32

receive less pension income as compared to men due to their

discontinuous working and low pre-retirement earning levels (Talaga

and Beehr, 1995). It has also been shown that income and

educational level are related to the availability of employer-sponsored

pension plans, as well as participation rates in those plans (Talaga

and Beehr, 1995). It has also been shown that income and

educational level are related to the availability of employer-sponsored

pension plans, as well as participation rates in those plans (Basset

et. al., 1998; Gale and Scholz, 1994; Grable and Lytton, 1997).

High paying income sources for most of the retirees is from Social

Security rather than any other source (Kleinman, Anandarajan and

Lawrence, 1999). However, some segments of the population have a

tendency to be liable on Social Security than others. DeVaney and Su

(1997), it is also clearly known fact that women are more expected to

be dependent on Social Security as being compared to men.

DeVaney and Su, (1997), found that retired women received 57.2

percent of their total income from the Social Security, whereas men

received 36.6 percent of their income from this source. Even though

women receive a high fraction of their retirement income from Social

Security than men but in the way of monthly benefits they receive

less. The lower level of Social Security benefits as was the case with

pensions earned by women has been accredited to lower pay scales in

their career history and frequently interrupted or intermittent work

patterns (Block, 1984; Rix, 1990).

Literature Survey


33

Wills and Ross (2002), proposed a model states that individuals must

involve in the decision of saving for retirement themselves and any

such model of savings decision must be made for personal retirement

saving. More specifically involvement of the individual is looked in the

term of awareness about the need to save for the retirement purpose

and knowing the procedure of how savings can be done for the same.

A sense of perceived ownership comes by such activity which helps

the customer in having confidence. The model of the experiential

learning cycle concept shows that the fundamentals of the

investment are grounded in it. Experience is lacked on the basis of

little involvement or non involvement. Individuals do not learn to save

for the retirement purposes till they take any investment decision.

Personal retirement savings are required for financial purpose. It is

important for individuals to be involved in the decision to experience

the art of planned savings. Since the life expectancy has raised

people live longer and equally important is the increasing number of

the people in retirement leading to reduced workforce. It is important

for the individuals to be actively participating in investment for their

retirement.

Robb (2010), examined the attitudes of employees toward

annuitisation of retirement assets and explored the basic relationship

between employees’ attitudes and their characteristics toward

immediate annuities. Collection of data for this study was done

through online questionnaires emailed to the employees who

participated in the defined contribution plan. The survey gathered

Literature Survey


34

information on retirement portfolio losses, expected longevity,

financial confidence, familiarity with annuities, and attitudes toward

immediate annuities. A total of 744 individuals answered the survey

for a response rate of 43.2% on the basis of results drawn from

independent t tests; it was found that there were statistically

important differences between the attitudes of women and men

toward immediate annuities. Women held more positive attitudes

toward immediate annuities than men, and women who had taken a

retirement planning class had more positive attitudes than women

who had not attended a retirement class. In contrast, men who had

attended a retirement class expressed less positive interest towards

immediate annuities as compared to men who had not. Male

overconfidence in their investment knowledge and skills may explain

this finding. A Pearson correlation coefficient expressed a negative

correlation between the attitudes toward annuities and risk aversion.

As investment risk tolerance decreases, attitudes toward immediate

annuities become more positive. An analysis of variance found that

individuals had more positive attitudes towards the immediate

annuities who had larger than average life expectancies than subjects

with shorter than average life expectancies. Surprisingly, individuals

claiming to be the most familiar one with the immediate annuities

showed the least interest toward annuities. Income and assets,

marital status, and financial confidence were not statistically

significantly related to attitudes toward annuities. Implications for

Literature Survey


35

consumers, financial professionals, educators, and policymakers

were drawn from the results of the study.

Lai (2008), aims to recognize the perception of the younger

generations and various factors such as age, situation, information

and performance factor which affects in perceiving the retirement and

influence the choice of pension product and its decision making.

Further the decision making about the pension purchase is made in

contrast to the people’s mindset towards the retirement and the

purchase decision correspondingly. The confidence in decision

making comes with how well it serves the need of individual after

retirement. The methods involved in research are survey

questionnaires, descriptive statistics. The findings demonstrate that

though the difference in ages showed difference in the perception

about the retirement but a similar model of pension purchase is

followed. Decision making of pension purchase also includes the

discussion about performance factor, Information channel and the

situational factors. The results sub sequential to the studies helps in

motivating the pension providers to promote pension products even

more efficiently and effectively by educating the people for better

planning of retirement when the customer knows the possible

benefits of pension for retirement.

The level of self- satisfaction comes from the work lives overall

portrayal before the retirement. Hopkins et. al. (2006), the level of

satisfaction and planning depends on how we look and perceive

Literature Survey


36

about the retirement. The transition of retirement is stressful for one

who doesn’t and comforting for those who plan their retirement and

future sources of income. Self evaluation plays a great role in

estimating work life and post retirement life. Retirement transition

turns to “old age” and “disruption.” For those who consider their

work life transition to retirement as a matter of self identity which

becomes the centrality of individuals work role and it is

comparatively lower for retirees who view retirement as a “new

beginning” and “continuation. Higher the self-actualization of an

individual before retirement, the lower will be the expectation after

the retirement. However, it should be noticed that satisfaction of self

identity must be built on the premises that good financial planning is

necessary to meet individual physiological needs. One’s level of self-

actualization at work does not mainly affect and defines the

individuals’ perceptions of retirement.

Cocco and Lopes (2004), Study Of Defined Contribution Or Defined

Benefit. An experimental study of pension choices states that

individual pension choices range between two different plans that

are defined contribution (DC) and a defined benefit (DB plans). The

difference in the DB plans is in their contribution rates and way of

calculation in retirement benefits, as a proportion of lifetime earnings

or as a proportion of final salary. Other determinants of pension

choices, found that: (i) individuals with higher income growth

options prefer DB final salary plans, and have low interest in

choosing the DC plan; (ii) individuals with higher earnings instability

Literature Survey


37

do not prefer DB final salary plans; (iii) Ones with high earnings may

preferably choose either the DB or the DC final salary plan. Evidence

shows that different pension plans are basically selected with

personal choices.

Gort (2009), stated in his study on Active Management and

Overconfidence quoted that: in the practical study over Swiss

pension plans, pension plans that favored active management over

indexing in implementation of their strategic asset allocation were

examined. Experimental surveys show, that their success has been

below expectations, because the performance of Swiss pension plans

in international equities and domestic was below than market

indices. The results of this study of decision makers of Swiss pension

plans throws some light on why popularity active management is still

maintained.

Imam (2011), in his paper he examined the potential and actual role

played by government in pension fund management .In investment

performance the government plays an important role in the term of

risk and return and by properly placing the pension funds in taking

advantage of the benefits. Typically Pension funds embrace low

proportions of equity in their portfolios which affects the growth of

pension funds growth and low equity proportions mean more safety

for the pension funds. To some extent “home bias” occurs because, it

is not necessary for regulators to lay strict limits on the proportion of

equities and thus a substantial extent for improvement in the status

Literature Survey


38

of current system is possible. Other issue which requires attention is

the tax treatment for making the new pension scheme equitable.

Rono et. al. (2010), focused in their study on the return of

investments for pension schemes and pension funds which comes

under the impact of RBA guidelines and analyzing it. Random

sampling was done of 175 fund trustees. Participation in the survey

amounted to 13 fund managers from registered fund management

companies. The questionnaire was filled through the drop- and-pick

method. Data was analyzed using the SPSS (Statistical Package for

Social Sciences) and was summarized using descriptive statistics,

such as standard deviation mean, percentages t-tests, and

frequencies for mean differences were used. The study found that

return for annual investment for retirement benefits schemes in the

last three years ranged from 10 to 27.52% and sometimes lowering

below the annual inflation.

Research Methodology


39

Chapter 3

RESEARCH METHODOLOGY

3.0 Introduction

Data are an essential input to the effective analysis of the perception

of the investors toward the investment in pension schemes. So, we

have applied Research Methodology. Research Methodology provides

way to solve a particular problem. It provides a way to solve a

problem in scientific manner. Research Methodology performs

different steps that are implemented by researcher in solving his

research problem.

J. W. Best (1999) defined that Research is well thought-out to be

proper, organized, exhaustive process of carrying on the scientific

method of study. It involves a more organized arrangement of

analysis usually resulting in some of formal record of procedures and

report of result or conclusions.

This chapter focuses on Design of the sampling strategy associated

with the definition of the experimental hypothesis and of the variable

of interest. It brings about the inferential study of the perception

analysis in the select cities.

3.1 Research Statement

The problem studied in the present context is entitled - “A Study of

Investors Perception towards Pension Schemes in India” The research

work focuses on current and prospective investor's perception



40

towards pensions schemes in cities of Lucknow, Kanpur and

Allahabad in Uttar Pradesh State. The study has been undertaken to

formulate and test the different hypothesis to find to the following

questions:

1. What are the factors that influence investment in Pension

Schemes?

2. What are the problems faced by investors of Pension Scheme?

3. Which tools of investment are popular among the investors?

4. What is the pattern of investment in Pension Schemes?

5. What are the factors that discourage investors of Pension

Schemes?

3.2 Research Design

In this section we are describing about the design of research. In

research design, we are discussing about the objective of the study,

hypothesis formation, nature of data as well as source of data, tools

and techniques used for data collection, sample design, area of the

study, data Scaling and measurement methods and finally tools and

methods used for of data analysis.

The research design is based on the theoretical structure within

which research is conducted. It constitutes the plan for collection,

arrangement and analysis of data. A research design includes an

outline of what the researcher will do from writing the hypothesis and

its operational implication to the final analysis of the data. In this

study, we are applying descriptive research design strategy.



41

3.2.1 Objectives of the Study

(a) Key objective of the study is to study the perception of investors

towards the investment in pension schemes.

(b) Subsidiary objectives of the study are as follows:

1. To analyze the problems of investors in investing their money in

pension scheme.

2. To analyze the investors level of fulfillment of objectives regarding

pension scheme.

3. To examine the pattern of investment for Pension Schemes in

Lucknow, Kanpur and Allahabad city.

4. To study investors preference with regards to pension scheme v/s

other investment products.

3.2.2 Hypothesis Formation

Hypothesis formation involved the design of the experimental

hypothesis and of the variable of interest involving definition of the

sampling units, the target population, the sampling frame, and the

sampling frame is a register of the target population which defines all

the sampling units within the target population. The choice of

sampling method will depend on the objectives of the survey and

perhaps on the survey technique being employed.

Strict experimental method requires that each hypothesis should be

accompanied by an equivalent null hypothesis whose validity is to be

tested. Thus, if the hypothesis is that speeds have decreased, the null

hypothesis might be that "speed has not decreased or alternatively



42

that speed has increased". The difference between these alternative

null hypotheses is that the first is less restrictive, and therefore less

likely to be rejected than the second.

The following hypothesis created to test the relationship

between different factors and investment in pension scheme:

1. Association between regular investment in pension scheme and

occupation of the respondents.


education of the respondents.


income of the respondents.


expenditure of the respondents.


savings of the respondents.


marital status of the respondents.


age of the respondents.


gender of the respondents.

To test the hypothesis, we are use Chi-square test of independence

for the above hypothesis.



43

3.2.3 Nature of Data and Sources of Data

This study considers primary as well as secondary data. Primary data

is the data that is collected for the first time and that is original in

nature. This data has been collected through questionnaire.

Secondary data has been collected by someone else. Secondary data

has been collected from news papers, magazines, websites, general

discussion with pension fund managers and employee’s of different

pension funds organizations of and published data of PFRDA and

pension fund companies.

3.2.4 Tools for Data Collection

The study covers both types of data i.e. primary and secondary.

Primary data was collected with the help of questionnaire which was

distributed and collected from the respondents of Lucknow, Kanpur

and Allahabad cities of Uttar Pradesh State. The questionnaire has

two sections; the first section relates to demographical profile of

respondents and the second part relates to questions regarding the

perception of investors towards pension schemes. The data has been

collected directly by door to door investigation. Sample respondents

were requested to give a free and frank response.

3.2.5 Sample Design

Purposive sampling method is used to collect data. Hundred

respondents each are taken from three highly populated cities of

Uttar Pradesh namely, Lucknow, Kanpur and Allahabad cities. A



44

structured questionnaire was given to respondents of the select cities

which consisted of both open ended and close ended questions.

(a) Population - Population includes Pension schemes investors of

selected cities of the Uttar Pradesh State.

(b) Sample element - Individual Pension schemes investors are the

sample element.

(c) Sampling technique - Purposive sample technique is applied to

select the sample.

(d) Sample size - The sample size of 100 respondents each was taken

from Lucknow, Kanpur and Allahabad cities. Total 380 respondents

from these cities were asked to fill up the questionnaire. Out of 380

respondents total 300 respondents select for the study. The number

of respondent’s approaches and select for the three cities given as

follows: For Lucknow, Total 140 respondent’s approaches and 100

selected. For Kanpur, Total 125 respondent’s approaches and 100

selected. For Allahabad, Total 115 respondent’s approaches and 100

selected. Due to the partial response from some respondents, we

have discarded some respondent.

(e) Questionnaire design - A Structured questionnaire was prepared

and distributed among the selected Pension schemes investors of the

Lucknow, Kanpur and Allahabad cities to study their perception and

preferences regarding pension schemes.



45

3.2.6 Area of the Study

The study is limited to the three cities of Uttar Pradesh State.

Lucknow, Kanpur and Allahabad cities are selected for research

study as they are the three highly populated cities in Uttar Pradesh.

3.2.7 Data Scaling and Measurement

In order to increase accuracy of research work, qualitative data

scaling techniques such as nominal scale and ordinal scale are used.

3.2.8 Tools and Methods of Data Analysis

3.2.8.1 Tabulation and Classification of Data

The data was collected through a questionnaire and tabulated. The

data has been classified on the basis of age, education, qualifications,

occupation, monthly income, gender, marital status, monthly

savings; monthly expenditure held by the respondents. Cross

tabulation has been done according to different variables.

3.2.8.2 Frame Work of Data Analysis

The data was analyzed with the help of Statistical package for social

science (SPSS.10). It is a software package, which is widely used of

statistical analysis. It includes various ranges of statistical

procedures that used to summarizing data, determining whether the

differences between groups are statistical significant or not. SPSS

also contains several tools for analyzing data, including functions for

recording data and computing new variable as well as merging and

aggregating data files. Chi-Square Test was applied for testing the



46

hypothesis at 5% level of significance. Data was analyzed with the

help of tables, charts and diagram. Statistical technique like

percentile was used to analyze the data. Descriptive analysis has

been used. Garrett’s Rank technique was conducted to determine the

most important factors affecting Pension scheme investment. Likert’s

scale technique was also used for analyzing the satisfaction level of

respondents for the pension schemes.

3.2.8.2.1 Chi-Square Test

Karl Pearson in 1900 developed a non-parametric test. The test is

used to test the significance of the inconsistency between

experimental (observed) frequencies and the theoretical frequencies

(expected) obtained on the basis of theory or hypothesis. This type of

test is known as Chi-Square Test ( 2-test), and is used to test

whether the discrepancy between expected and observed values may

be attributed to the chance (fluctuations of sampling).

Chi-square test used to judge the significance of association between

attributes. It is necessary that the observed as well as theoretical or

expected frequencies must be grouped in the same way and the

theoretical distribution must be adjusted to give the same total

frequency as we find in case of observed distribution. 2 value is then

calculated as follows:

2 = ∑ (foij - feij)/ feij

Where

foij = Observed frequency



47

feij = Expected frequency

2observed < 2

Critical Accept the Null Hypothesis

and if,

2observed < 2

Critical Reject the Null Hypothesis

2Critical value taken from the table based on degree of freedom and

5% level of significance.

Conditions Characterizing the 2 Test

The Chi-square test can be validly applied if the following conditions

are satisfied:

(i) The observations recorded are collected on a random basis.

(ii) The sample observations should be independent, i.e., no

individual item should be included twice or more in the

samples.

(iii) The total number of observations should be reasonably large,

say N > 50.

(iv) The data should be expressed in such forms that for the

convenience of comparison and the given distribution should

never be replaced by relative frequencies or proportions.

3.2.8.2.2 Garrett’s Ranking Technique

To find out the most significant factor which influences the

respondent, this technique applied. To apply this method, each

respondent have been asked to assign the rank for all factors and the

outcomes of such ranking have been converted into score value with

the help of the following formula:



48

Percent position =

Where,

Rank given for the ith variable by jth respondents

Number of variable ranked by jth respondents

With the help of Garrett’s Table, the percent position estimated is

converted into scores. Then for each factor, the scores of each

individual are added and then total value of scores and mean values

of score is calculated. The factors having highest mean value is

considered to be the most important factor.

3.2.8.2.3 Likert’s Scale Technique

This scale is used to the study of social attitudes follow the pattern

devised by Likert. In this scale, the respondent is asked to respond to

each of the statements in terms of several degrees, usually five

degrees (but at times 3 or 7 may also be used) of agreement or

disagreement. In our research we are talking seven degree. Likert

scales are developed by utilizing the item analysis approach wherein

a particular item is evaluated on the basis of how well it

discriminates between those people whose total score is high and

those whose score is low. Those items or statements that best meet

this sort of discrimination test are included in the final instrument.

Thus, summated scales consist of a number of statements which

express either a favorable or unfavorable attitude towards the given

object to which the respondent is asked to react. The respondent



49

indicates his agreement or disagreement with each statement in the

instrument. Each response is given a numerical score, indicating its

favorableness or unfavorableness, and the scores are totaled to

measure the respondent’s attitude. In other words, the overall score

represents the respondent’s position on the continuum of favorable -

unfavorableness towards an issue.

3.3 Scope of the Study

The present research work is an attempt to study the investors’

perception towards pension schemes of three major cities of Uttar

Pradesh, namely; Lucknow, Kanpur and Allahabad. It involves

understanding the basic concept of social security, various pension

schemes, investment alternatives, factors influencing investment,

investor’s expectation regarding the pension schemes, investors’

preference of different investment options and satisfaction level of

investor towards the pension schemes investment. Similar studies on

this line may be conducted in other cities too and for different

investment products in India. Further research can also be

conducted for studying perceptions of pension fund managers

towards investment of funds.

3.4 Limitations of the Study

In this work the data was collected and interpreted with utmost

reliability and consistency but due to prejudices of a few respondents

and a flaw in present characteristics of this type of study, certain

limitations of the study are as follows:



50

1. The study depicts the present scenario in the select cities and

hence the result may not be applicable to another period of

time.

2. This research work considered only 300 respondents out of 380

respondents of the select cities.

3. Answer to the questionnaire depends upon the beliefs and

prejudices of investors.

4. It is assumed that respondents are true and honest in

expressing their views and have filled the questionnaire

honestly and without any bias.

5. The present study is restricted to information collected about

the Pension schemes investors with the help of questionnaire.

Profile of Select Cities of Uttar Pradesh


51

Chapter 4

PROFILE OF SELECT CITIES OF UTTAR PRADESH

4.0 Uttar Pradesh and Select Cities of Uttar Pradesh

4.0.1 Uttar Pradesh

The state is located in north India. Lucknow is capital of state.

Ghaziabad, Allahabad, Kanpur, Lucknow, Moradabad, Aligarh, and

Varanasi are well recognized for their industrial value in the Uttar

Pradesh as well as in India. It covers 243,290 km2 land area and it is

approximately equal to 6.88% of the total land area of the country. It

is the 4th largest state in India and also the most populous state in

India. It is also the 4th largest state by economy and its gross

domestic product is 7080 billion. Agriculture and service industries

plays important role in state economy. Service sector includes travel

as well as tourism industry, hotel & motel industry, real estate

market, stock exchange, insurance and financial consultancies.

It has a huge population and high growth rate. The population of

Uttar Pradesh increased 26 percent during the period of 1991 to

2001. Its number comes first in terms of population in India and as

on 1 March 2011, its population is 199,581,477. Uttar Pradesh

contributes 16.16 percent of Indian population. The inhabitant’s

density is 828 citizens per kilometer2. It is one of the densest states

in India. It has more number of metropolitan cities than any other

state. In terms of urban residents of the state, its position is 2nd in



52

India and constitutes 11.8 percent of Indian urban population i.e.

44.4 million. In 2011 census, its literacy rate was 70 percent as

compared to national average i.e. 74 percent.

It has a huge number of citizens, those belonging to below the

poverty line. Planning Commission made estimation for the year 2009

- 2010 stated that it had 59 million citizens, those belonging to below

the poverty line and its position is on top in India in terms of poor

people.

The following list showed national ranks of top five districts of

Uttar Pradesh:

Rank

In

India

District Population Growth

Rate (%)

Sex

Ratio

Literacy

(%)

Density Per

Kilometer2

13 Allahabad 5,959,798 20.74 902 74.41 1087

26 Moradabad 4,773,138 25.25 903 58.67 1284

22 Ghaziabad 2,358,525 41.66 878 85.00 3967

30 Azamgarh 4,616,509 17.17 1017 72.69 1139

9 Lucknow 4,588,455 25.79 906 79.33 1815

10 Kanpur 4,572,951 19.72 852 81.31 1449

Table 4.1 : Rank of Top Five Districts

http://en.wikipedia.org/wiki/Allahabad_District

http://en.wikipedia.org/wiki/Moradabad_district

http://en.wikipedia.org/wiki/Ghaziabad_district,_India

http://en.wikipedia.org/wiki/Azamgarh

http://en.wikipedia.org/wiki/Lucknow_district



53

It has around thirty universities, including four central universities,

twenty state universities; eight deemed universities, two IITs, one IIM,

one NIT, and one IIIT and several polytechnics, technical colleges and

ITIs.

In terms of net state domestic product from the period 2011–2012,

state holds the third largest economy in the country, with a net state

domestic product of 7080 billion. Agriculture and related works is the

primary occupation in state. Most of the farmers producing Wheat

and it are the state's main food crop and sugarcane is the main

commercial crop. About 70% of India's sugar comes from this state.

Most of the industries are situated in the Kanpur region, purvanchal

region and the Noida region. Major locomotive plants situated in

Mughalsarai. Major manufacturing products include engineering

products, electronics, electrical equipment, cables, steel, leather,

textiles, jewellery, frigates, automobiles, railway coaches, and

wagons. Uttar Pradesh has more number of small-scale industrial

units as compared to other states, i.e. 12% of over 2.3 million units

while cement production is the top sector of small and medium scale

industries with 359 manufacturing clusters.

From the period 2009 to 2010, the tertiary zone of the economy i.e.

service industries was the largest contributor to the gross domestic

product of the state, it is contributing 44.8 percent of the state

domestic product as compared to 44 percent from the primary sector

and 11.2 percent from the secondary sector. During the 11th five-year



54

plan, from the period 2007 to 2012, the average gross state domestic

product growth rate was 7.28 percent. It was lower than 15.5

percent, the average for all states of the country. The state’s per

capita gross state domestic product growth was Rs. 29417, lower

than the national per capita gross state domestic product growth of

Rs. 60972. The state's total financial debt stood at 2000 billion in the

year 2011. Labor efficiency is higher at an index of 26 than the

national average of 25. The tourism industry is as also playing

important role to strengthen the economy.

Noida and Lucknow is growing as major centers for the information

technology industry and related business. Due to this, state is

attracting foreign direct investment. Some large-scale industries

situated in Sonebhadra district in eastern Uttar Pradesh and it is

also known as the "Energy Capital of India". According 2013 data

released by Telecom Regulatory Authority of India (TRAI), it reveals

that state had the largest number of mobile subscribers in the

country. In Uttar Pradesh a total of 121.60 million mobile phone

connections out of 861.66 million in India.



55

Figure 4.1 : Map of Uttar Pradesh



56

4.0.2 Select Cities of Uttar Pradesh

4.0.2.1 Lucknow

Lucknow is situated in the Uttar Pradesh state in northern India and

it is the capital of Uttar Pradesh. City is the district headquarters as

well as divisional headquarters of Lucknow Division. Lucknow city

was established in 1775 because of nawab of Awadh changed his

capital from Faizabad to Lucknow. Lucknow city is one of the most

prosperous and glittering cities in India.

In 2011 census records, district population is 4,588,455 and it has

9th rank in India. The district has a population density of 1,815

peoples per kilometer2. From the period 2001 to 2011, its population

growth rate was 25.79% and its sex ratio is 906 females for every

1000 males. It has a 79.33% literacy rate.

In current scenario, job market of Lucknow is on uptrend. Lucknow

placed 6th among all the cities in India for fastest job-creation, the

city is a major market and trading place in northern India and an

emerging center for producers of goods and services. Due to the

capital of state, the Government organizations and the public sector

are the main employers of the middle class. Liberalization has

created many opportunities in the business and service sector and

self-employed professionals are burgeoning in the city.

The distribution of main workers in the year 2001 by different

categories reveals that almost 21% people are involved in cultivation

while another 6% are agriculture based laborers. This is reasonably



57

understandable in the district where rural population percentage is

low as 37%. What is remarkable is that the share of population in

rural areas has registered a decline from about 37% in year 1991 to

36% in year 2001. In the same row cultivators declined from 29.73%

in year 1991 to 21.06% and agricultural laborers declined from

8.70% to 6.50% in the year 2001. Agricultural fervor of the workforce

shows a decline in favor of non-agricultural activities in the state.

Lucknow is the head office of both the Small Industries Development

Bank of India as well as The Pradeshiya Industrial and Investment

Corporation of Uttar Pradesh. Confederation of Indian Industry and

Entrepreneurship Development Institute of India is also situated in

the city to promote the business activities. The following

manufacturing units situated in the Lucknow such as HAL, Tata

Motors, Eveready Industries, Omax Auto and Scooters India Limited.

The small-scale and medium-scale manufacturing units are situated

in the Chinhat, Aishbagh, Talkatora, Amausi and Mohanlalganj area.

City has the fastest rising property business as well as its rates

increasing due to the redevelopment of several areas. There are

several malls and multiplex situated in Lucknow city.

Traditionally, Lucknow district is also known as a mandi town for

world class mangoes, melons, and grains production in the

surrounding areas. City is known for small scale industries. These

industries are based on its exclusive styles of embroidery, such as

Chikan work and Zardozi work, both of which are also export to other



58

countries. Chikan is also used by fashion designers in, T.V. serials,

and Bollywood movies and abroad. These works are also popular in

other states and has very high demand.

Figure 4.2 : Map of Lucknow



59

4.0.2.2 Kanpur

Kanpur is the largest urban district in Uttar Pradesh. It is 10th

biggest city in India and 2nd largest city in terms of number of

industries in Northern India. Kanpur city is also known as Leather

City because it contains world level largest and finest tanneries

(approximately 350 in numbers). The city is the headquarters of

Kanpur district and Kanpur division. It is the main center for

commercial and industrial activities in north India. It was main

center of the industrial revolution in India. Kanpur was also known

as "Manchester of the East". Today city is known for the production

of Ghari detergent power, Red Tape Shoes, Goldie spices, Duncans

Industries, many middle-scale industries and Hosiery business etc.

The offices of various financial/commercial organizations and top

level banks are also situated in the Kanpur city. Reserve Bank of

India (RBI) has its office in Kanpur city. The Registrar of companies

has also its office in Kanpur. The UTI, IDBI and various insurance

companies have their major offices in the city. Apart from these

almost all nationalized/ private limited banks offices situated here.

The Standard Chartered Grindlays bank also has its branch in the

city for the development of business. Stock exchange is also situated

in the city. The Major trading places in the Kanpur city are Leather

based products, Stock exchange, Spices, Textiles, Fertilizers &

Chemicals, Hosiery, Soaps & Detergents, Electrical goods and lots of

General merchant.



60

On the basis of year 2011 census data, district has a population of

4,572,951 inhabitants. It has a population density of 1,449 peoples

per kilometer2. From the period 2001 to 2011, its population growth

rate was 19.72 percent. Allahabad district sex ratio is 852 females for

every 1000 males. It has 81.31 percent literacy rate. It has an area of

over 605 km2.

Figure 4.3 : Map of Kanpur



61

4.0.2.3 Allahabad

It is one of the major & largest districts in state. The three rivers of

India - Ganges, Yamuna and the mythical river of Sarasvati - meet at

a point in the Allahabad district, known as Sangam, considered holy

by Hindus. Allahabad was once the capital of United Province before

independence. Allahabad is also one of the greatest educational hub

having lots of major educational institutes like IIIT, MNNIT,

University Of Allahabad, Ewing Christian College and Gautam Buddh

Technical University affiliated number of Engineering Colleges,

MotiLal Nehru Medical College, JK Institute - these provides higher

education.

Allahabad is an agricultural district. The main crops are wheat, rice

and pulses in some area. Tube wells and canals are used for

irrigation purpose. The Income of the city gets boost up because of a

number of economic activities taking place here such as primary

activities, agriculture and animal husbandry, fishing, forestry and

logging, mining and quarrying etc. There are secondary activities and

manufacturing which may be registered or unregistered. One can get

to see a large number of constructions taking place in Allahabad

which again improvises the Allahabad economy. Because of the huge

number of domestic as well as international tourists coming here in

the Allahabad city, the tourism industry got a sufficient boost.

Among the several reasons of attracting people, the Kumbh Mela is

the major one. The Kumbh Mela is not only famous in India but



62

worldwide and therefore millions and millions of devotees come here

in Kumbh Mela organized here in every 12 years, thereby gearing up

the economy of Allahabad and making it largest gathering of humans

in the whole world.

There are a large number of small as well as large scale industries

found in the Allahabad city which made the economy of Allahabad

develop and helped in accelerating the development of the city. Some

of the significant industrial organizations found in the Allahabad

district are ITI Naini, Geep Industries, Triveni Sheet Glass Limited,

IFFCO, Raymond Synthetics Karchanna and Hindustan cable

Limited.

In 2011 census it has 5,959,798 peoples in the districts. It has 13th

rank in India on the basis of population. As of 2011 it is the most

populous district of Uttar Pradesh. Its population density is 1,087

peoples per kilometer2. From the period 2001 to 2011, its population

growth rate is 20.74 percent. Its sex ratio is 902 females for every

1000 males. Allahabad has highest literacy rate in the region and

close to national average. Its literacy rate is 74.41 percent as

compared to national average i.e. 74 percent.



63

Figure 4.4 : Map of Allahabad

In the next section, we are representing city wise demographic profile

of respondents.



64

4.1 Demographic Profile of Respondents of Select Cities

of Uttar Pradesh

Total 380 respondent’s data were collected during survey. Out of

which 300 respondent’s data selected for the study. This 300

respondent’s data contains 100 respondents from each city. This

data will be used to analyze their perception regarding Pension

Schemes. For this purpose purposive sampling technique method

was adopted during survey. This sample comprised of total 300

respondents out of which 233 are male respondents and 67 are

female respondents. The demographic profile based on diffent factors

such as respondent’s age, respondent’s marital status i.e. whether

respondent is single or married, respondent’s occupation,

respondent’s education, respondent’s monthly income, respondent’s

monthly expenditure and respondent’s monthly savings is given in

Table 4.2 as follows:

Demographic Factor

Classification Lucknow Kanpur Allahabad Total Percentage

Gender Male 85 75 73 233 77.67

Female 15 25 27 67 22.33

Total 100 100 100 300 100

Age 20-40 62 52 69 183 61.00

40-60 29 35 26 90 30.00

Above 60 9 13 5 27 9.00

Total 100 100 100 300 100

Occupation Business 29 31 25 85 28.33

Salaried 37 36 49 122 40.67

Farming & Allied Activities

21 17 15 53 17.67

Any other 13 16 11 40 13.33

Total 100 100 100 300 100



65

Education Qualification

S.S.C 13 8 3 24 8.00

H.S.C 11 13 8 32 10.67

Under Graduate

4 9 6 19 6.33

Graduate 44 48 38 130 43.33

Post Graduate 20 18 37 75 25.00

Any other 8 4 8 20 6.67

Total 100 100 100 300 100

Income Tax Tax Payers 71 77 73 221 73.67

Non Tax Payers

29 23 27 79 26.33

Total 100 100 100 300 100

Total Monthly Income

Up to Rs.15000

23 11 29 63 21.00

Rs.15000 to Rs.25000

26 27 21 74 24.67

Rs.25000 to

Rs.35000

22 15 15 52 17.33

Rs.35000 to Rs.45000

15 18 14 47 15.67

Above Rs.45000

14 29 21 64 21.33

Total 100 100 100 300 100

Total Monthly Expenditure

Up to Rs.10000

43 50 37 130 43.33

Rs.10000 to Rs.20000

35 23 31 89 29.67

Rs.20000 to Rs.30000

18 19 25 62 20.67

Rs.30000 to Rs.40000

1 5 6 12 4.00

Above Rs.40000

3 3 1 7 2.33

Total 100 100 100 300 100

Total Monthly

Savings

Up to Rs.5000 55 18 44 117 39.00

Rs.5000 to Rs.15000

29 46 37 112 37.33

Rs.15000 to Rs.25000

13 24 11 48 16.00

Rs.25000 to Rs.35000

1 8 3 12 4.00

Above Rs.35000

2 4 5 11 3.67

Total 100 100 100 300 100

Marital Status

Married 72 82 71 225 75.00

Unmarried 28 18 29 75 25.00

Total 100 100 100 300 100

Table 4.2 : Demographic Profile of Respondents

Data Analysis


66

Chapter 5

DATA ANALYSIS

5.0 Introduction

This thesis work focuses on the profile and perception of current and

prospective investors from the point of view of investment towards

pension schemes in select cities of Uttar Pradesh State. Three main

cities of Uttar Pradesh i.e. Lucknow, Kanpur and Allahabad were

taken for the study as they are the three highly populated cities in

Uttar Pradesh. Questionnaires were given to respondents of select

cities to collect the primary data. These questionnaires were given to

the respondents i.e. pension schemes’ current and prospective

investors of Lucknow, Kanpur and Allahabad cities. The

questionnaire has two parts. The first section relates to the

demographic profile of sample respondents i.e. savings, occupation,

age, income, gender, expenditure, marital status and education. The

second section relates to the perceptions of investors towards

Pension Scheme’s investment. In the latter part, the respondents

were asked questions regarding the sources of investments, reasons

for investing in Pension scheme, preference for tools of investments,

selection of schemes, factors discouraging pension scheme

investment, objective of investing in pension scheme and the level of

satisfaction regarding fulfillment of their objectives. 2 Test, Garrett's

Rank technique and Likert's scale were used to analyze the data.

Data Analysis


67

5.1 Demographic Profile of Respondents of Select

Cities of Uttar Pradesh

5.1.1 City Wise Respondents of Select Cities of Uttar Pradesh

State

Cities Respondents Cities Respondents

Lucknow 100

Kanpur 100

Allahabad 100

Table 5.1 : Respondents Form Each City

Total 300 respondents are taken for the study i.e., 100 respondents

each were taken from Lucknow, Kanpur and Allahabad cities as

shown in Table 5.1.

5.1.2 Gender Wise Classification of Respondents

Gender Lucknow Kanpur Allahabad Total

No. %

Males 85 75 73 233 77.67

Females 15 25 27 67 22.33

Total 100 100 100 300 100.00

Table 5.2 : Gender Wise Classification of Respondents

Figure 5.1 : Gender Wise Classification of Respondents

0

20

40

60

80

100

Lucknow Kanpur Allahabad

Males

Females

No. of

Responden

ts

Cities

Data Analysis


68

The above Table 5.2 and graph (Figure 5.1) depicts the gender wise

classification of respondents. From 100 respondents of Lucknow, 85

were males and 15 were females. In Kanpur, 75 were males and 25

were females while in Allahabad 73 were males and 27 were females

i.e. out of 300 respondents taken for the study, 233 were males and

67 were females.

5.1.3 Age Wise Classification of Respondents

Age Lucknow Kanpur Allahabad Total

No. %

20 to 40 62 52 69 183 61.00

40 to 60 29 35 26 90 30.00

Above 60 9 13 5 27 9.00

Total 100 100 100 300 100.00

Table 5.3 : Age Wise Classification of Respondents

Figure 5.2 : Age Wise Classification of Respondents

Table 5.3 and graph (Figure 5.2) gives the age wise classification of

respondents. It is found that out of 300 respondents taken for the

study, 183 respondents (61%) were in the age group 20 to 40 and 90

respondents (30%) were in the age group 40 to 60.Only 27

respondents (9%) were in the age group above 60.

0

20

40

60

80

100

20 to 40 40 to 60 Above 60

Luknow

Kanpur

Allahabad

No. of

Responden

ts

Age Group

Data Analysis


69

5.1.4 Marital Status of Respondents

Marital Status Lucknow Kanpur Allahabad Total

No. %

Married 72 82 71 225 75.00

Unmarried 28 18 29 75 25.00

Total 100 100 100 300 100.00

Table 5.4 : Marital Status Wise Classification of Respondents

Figure 5.3 : Marital Status Wise Classification of Respondents

Marital status of sample respondents in Table 5.4 and graph (Figure

5.3) indicates that majority i.e. 225 (75%) of the current and

prospective investors in Pension schemes were married while 75

(25%) were unmarried.

5.1.5 Occupational Status of Respondents

Occupation Lucknow Kanpur Allahabad Total

No. %

Business 29 31 25 85 28.33

Farming & Allied

Activities

21 17 15 53 17.67

Salaried 37 36 49 122 40.67

Any other 13 16 11 40 13.33

Total 100 100 100 300 100.00

Table 5.5 : Occupation Wise Classification of Respondents

0

20

40

60

80

100

Luknow Kanpur Allahabad

Married

Unmarried

No. of

Responden

ts

Cities

Data Analysis


70

Figure 5.4 : Occupation Wise Classification of Respondents

Occupation wise distribution of the respondents is given in Table 5.5

and graph (Figure 5.4) & it reveals that 85 respondents (28.33%)

belong to the Business category. 122 respondents (40.66%) were

salaried. 53 respondents (17.66%) were involved in farming and

allied activities, 40 respondents (13.33%) belonged to the other

category i.e. people those not earning form formal means.

5.1.6 Literacy Level of Respondents

Education Qualification Lucknow Kanpur Allahabad Total

No. %

S.S.C 13 8 3 24 8.00

H.S.C 11 13 8 32 10.67

Under Graduate 4 9 6 19 6.33

Graduate 44 48 38 130 43.33

Post Graduate 20 18 37 75 25.00

Any other 8 4 8 20 6.67

Total 100 100 100 300 100.00

Table 5.6 : Literacy Level of Respondents

0

20

40

60

80

100

Business Farming & Allied

Activities

Salaried Any other

Luknow

Kanpur

Allahabad

Occupations

No. of

Responden

ts

Data Analysis


71

Figure 5.5 : Literacy Level of Respondents

The literacy level of the respondents is given in table 5.6 and graph

(Figure 5.5) & it reveals that out of 300 respondents, 24 respondents

(8.00%) were educated up to school level i.e. S.S.C. 32 respondents

(10.66%) were educated up to higher secondary level i.e. H.S.C. 19

respondents (6.33%) were under graduates. 130 (43.33%) were

graduates. 75 respondents (25.00%) were post graduates and

remaining 20 respondents (6.66%) were certificate course and

diploma holders.

5.1.7 Respondents Paying Income Tax

Paying Tax Lucknow Kanpur Allahabad Total

No. %

Yes 71 77 73 221 73.67

No 29 23 27 79 26.33

Total 100 100 100 300 100.00

Table 5.7 : Respondents Paying Income Tax

0

20

40

60

80

100

Luknow

Kanpur

Allahabad

No. of

Responden

ts

Education

Data Analysis


72

Figure 5.6 : Respondents Paying Income Tax

The classification on the basis of respondents paying Income Tax is

given in Table 5.7 and graph (Figure 5.6) & it reveals that out of 300

respondents, 221 respondents (73.67%) were tax payers while 79

respondents (26.33%) were not paying income tax.

5.1.8 Income Wise Classification of Respondents

Monthly Income Lucknow Kanpur Allahabad Total

No. %

Up to Rs.15000 23 11 29 63 21.00

Rs.15000 to Rs.25000 26 27 21 74 24.67

Rs.25000 to Rs.35000 22 15 15 52 17.33

Rs.35000 to Rs.45000 15 18 14 47 15.67

Above Rs.45000 14 29 21 64 21.33

Total 100 100 100 300 100.00

Table 5.8 : Income Wise Classification of Respondents

0

20

40

60

80

100

Luknow Kanpur Allahabad

Yes

No

No. of

Responden

ts

Cities

Data Analysis


73

Figure 5.7 : Income Wise Classification of Respondents

The classification of respondents based on their monthly income is

given in Table 5.8 and graph (Figure 5.7). It is seen that out of 300

respondents, 63 respondents (21.00%) belonged to low income

category (Up to Rs.15000) while 74 respondents (24.67%) were found

in the income category of Rs.15000 to Rs. 25000. 52 respondents

(17.33%) belonged in the income level of Rs.25000 to Rs.35000. 47

respondents (15.67%) were found to be in the Rs.35000 to Rs.45000

income group and remaining 64 respondents (21.33%) belonged to

the highest monthly income level i.e. above Rs.45000.

5.1.9 Expenditure Wise Classification of Respondents

Monthly Expenditure Lucknow Kanpur Allahabad Total

No. %

Up to Rs.10000 43 50 37 130 43.33

Rs.10000 to Rs.20000 35 23 31 89 29.67

Rs.20000 to Rs.30000 18 19 25 62 20.67

Rs.30000 to Rs.40000 1 5 6 12 4.00

Above Rs.40000 3 3 1 7 2.33

Total 100 100 100 300 100.00

Table 5.9 : Expenditure Wise Classification of Respondents

0

20

40

60

80

100

Up to Rs.15000

Rs.15000 to

Rs.25000

Rs.25000 to

Rs.35000

Rs.35000 to

Rs.45000

Above Rs.45000

Luknow

Kanpur

Allahabad

Income Range

No. of

Responden

ts

Data Analysis


74

Figure 5.8 : Expenditure Wise Classification of Respondents

The classification of the respondents based on their monthly

expenditure is given in Table 5.9 and graph (Figure 5.8) & it reveals

that out of 300 respondents 130 respondents (43.33%) belonged to

the monthly expenditure group of up to Rs.10000 while 89

respondents (29.67%) were found in the category of Rs.10000 to

Rs.20000 monthly expenditure levels. 89 respondents (29.67%) were

in the monthly expenditure level of Rs.20000 to Rs.30000. 62

respondents (20.67%) are found to be in Rs.30000 to Rs.40000

monthly expenditure level and remaining 7 respondents (2.33%)

belonged to the highest monthly expenditure level i.e. above

Rs.40,000.

0

20

40

60

80

100

Up to Rs.10000

Rs.10000 to

Rs.20000

Rs.20000 to

Rs.30000

Rs.30000 to

Rs.40000

Above Rs.40000

Luknow

Kanpur

Allahabad

Expenditure

No. of

Responden

ts

Data Analysis


75

5.1.10 Classification of Respondents According to Savings

Monthly Savings Lucknow Kanpur Allahabad Total

No. %

Up to Rs.5000 55 18 44 117 39.00

Rs.5000 to Rs.15000 29 46 37 112 37.33

Rs.15000 to Rs.25000 13 24 11 48 16.00

Rs.25000 to Rs.35000 1 8 3 12 4.00

Above Rs.35000 2 4 5 11 3.67

Total 100 100 100 300 100.00

Table 5.10 : Classification of Respondents According to Savings

Figure 5.9 : Classification of Respondents According to Savings

The classification of respondents based on their monthly savings is

given in Table 5.10 and graph (Figure 5.9). Out of 300 respondents,

117 respondents (39.00%) belonged to the monthly savings group of

below Rs. 5000 while 112 respondents (37.33%) were found in the

category of Rs. 5000 to Rs. 15000 monthly saving levels. 48

respondents (16.00%) belonged to the monthly savings level of Rs.

15000 to Rs. 25000. 12 respondents (4.00%) are found to be in

Rs.25000 to Rs.35000 monthly savings group and remaining 11

respondents (3.67%) belong to the monthly savings level above

Rs.35000.

0

20

40

60

80

100

Up to Rs.5000

Rs.5000 to

Rs.15000

Rs.15000 to

Rs.25000

Rs.25000 to

Rs.35000

Above Rs.35000

Luknow

Kanpur

Allahabad

Savings Range

No. of

Responden

ts

Data Analysis


76

Interpretation of the Profile of Respondents

The profile of the respondents based on age indicates that the age

group between 20 years to 40 years constitutes the largest group

amongst the respondents who invest in Pension scheme. This shows

that the youth are attracted toward old age security and invest their

savings in pension scheme. Classification of the respondents based

on gender indicates that 77.67 percent are males. This shows that

males dominated as Pension scheme investors. Females were not

interested in investing pension scheme as compared to males.

Qualification wise classification of the respondents shows that

graduates constitute the majority of Pension scheme investors

followed by post-graduates. This indicates that the graduates and

post-graduates were attracted towards Pension scheme investments.

Occupational wise classification of the respondents indicates that

most of the respondents belong to the salaried class, followed by

business class and the persons involved in farming and allied

activities. Classification based on income of the respondents reveals

that 24.67% of the pension scheme investors had monthly income

between Rs. 15000 to Rs. 25000, followed by monthly income group

above Rs. 45000. Income Tax payable by respondents reveals that

73.67% respondents were tax payers. This leads us to suggest that

the tax payers also used Pension scheme investment as a tax saving

tool.

Data Analysis


77

5.2 Perception of Investors towards Pension Scheme

Investment

5.2.1 Purpose of Savings

5.2.1.1 Purpose of Savings of Respondents of Select Cities of

Uttar Pradesh

Purpose of Savings Lucknow Kanpur Allahabad Total

No. %

Children Education 55 59 55 169 56.33

Children Marriage 44 28 41 113 37.67

House Construction 34 33 40 107 35.67

Retirement Planning 51 39 55 145 48.33

Tax Planning 42 44 34 120 40.00

Table 5.11 : Purpose of Savings

Figure 5.10 : Purpose of Savings

People save their money for different purposes i.e. children

education, children marriage, house construction, retirement

planning and tax planning. Table 5.11 and graph (Figure 5.10)

indicates that the main purpose of savings was for education of

0

20

40

60

80

100

Luknow

Kanpur

Allahabad

Purpose of Savings

No. of

Responden

ts

Data Analysis


78

children, (56.33%) followed by Retirement Planning (48.33%). Tax

planning was given the third priority by the respondents.

5.2.1.2 Purpose of Savings of Respondents by Occupation

Occupation

/ Purpose

of Savings

Children

Education

Children

Marriage

House

Constructio

n

Retirement

Planning

Tax

Planning

Total

Yes No Yes No Yes No Yes No Yes No

Business 58

(68.2)

27

(31.8)

25

(29.4)

60

(70.6)

31

(36.5)

54

(63.5)

29

(34.1)

56

(65.9)

36

(42.4)

49

(57.6)

85

(100)

Salaried 65

(53.3)

57

(46.7)

50

(40.9)

72

(59.1)

54

(44.3)

68

(55.7)

60

(49.2)

62

(50.8)

53

(43.4)

69

(56.6)

122

(100)

Farming &

Allied Activities

29

(54.7)

24

(45.3)

26

(49.1)

27

(50.9)

12

(22.6)

41

(77.4)

18

(33.9)

35

(66.1)

21

(39.6)

32

(60.4)

53

(100)

Any other 23

(57.5)

17

(42.5)

12

(30.0)

28

(70.0)

11

(27.5)

29

(72.5)

19

(47.5)

21

(52.5)

11

(27.5)

29

(72.5)

40

(100)

Total 175

(58.3)

125

(41.7)

113

(37.7)

187

(62.3)

108

(36.0)

192

(64.0)

126

(42.0)

174

(58.0)

121

(40.3)

179

(59.7)

300

(100)

*Figures in bracket denote %

Table 5.12 : Purpose of Savings Based On Occupation

Figure 5.11 : Purpose of Savings Based On Occupation

It is inferred from Table 5.12 and graph (Figure 5.11) that people

engaged in Business give the first preference to children education

(68.2%) followed by others (57.5%) and then people involved in

farming and allied activities class (54.7%). Business class people

0

50

100

150

200

250

YES No YES No YES No YES No YES No

Any other

Post Graduates

Graduates

Under Graduate

H.S.C.

S.S.C.

Children

Education

Children

Marriage

Tax

Planning

Purpose of Savings

No. of

Responden

ts

Retirement

Planning House Construction

Data Analysis


79

gave first priority to children education (68.2%) followed by the tax

planning (42.4%). Salaried class gave priority to children education

(53.3%) followed by retirement planning (49.2%). People involved in

Farming and allied activities gave first preferences to children

education (54.7%) followed by children marriage (49.1%). Others gave

first priority to children education (57.5%) followed by retirement

planning (47.5%). Thus it can be seen that children education is

given maximum importance than any other purpose of savings

followed by retirement planning and tax planning.

5.2.1.3 Purpose of Savings of Respondents by Education

Qualifications

Education qualification/

Purpose of

Savings

Children Education

Children Marriage

House Construction

Retirement Planning

Tax Planning

Total


S.S.C. 10

(41.7)

14

(58.3)

11

(45.8)

13

(54.2)

7

(29.2)

17

(70.8)

13

(54.2)

11

(45.8)

4

(16.7)

20

(83.3)

24

(100)

H.S.C. 20

(62.5)

12

(37.5)

15

(46.9)

17

(53.1)

11

(34.4)

21

(65.6)

14

(43.7)

18

(56.3)

7

(21.9)

25

(78.1)

32

(100)

Under

Graduate

11

(57.9)

8

(42.1)

6

(31.6)

13

(68.4)

8

(42.1)

11

(57.9)

5

(26.3)

14

(73.7)

6

(31.6)

13

(68.4)

19

(100)

Graduates 71

(54.6)

59

(45.4)

42

(32.3)

88

(67.7)

42

(32.3)

88

(67.7)

62

(47.7)

68

(52.3)

52

(40.0)

78

(60.0)

130

(100)

Post Graduates

47 (62.7)

28 (37.3)

31 (41.3)

44 (58.7)

33 (44.0)

42 (56.0)

35 (46.7)

40 (53.3)

41 (54.7)

34 (45.3)

75 (100)

Any other 10

(50.0)

10

(50.0)

8

(40.0)

12

(60.0)

5

(25.0)

15

(75.0)

16

(80.0)

4

(20.0)

10

(50.0)

10

(50.0)

20

(100)

Total 169

(56.3)

131

(43.7)

113

(37.7)

187

(62.3)

106

(35.33)

194

(64.7)

145

(48.3)

155

(51.7)

120

(40.0)

180

(60.0)

300

(100)


Table 5.13 : Purpose of Savings Based On Education Qualification

Data Analysis


80

Figure 5.12 : Purpose of Savings Based On Education Qualification

Table 5.13 shows the relationship between educational qualifications

and purpose of savings. Most of the respondents gave the priority to

children education. However the non-graduates gave the second

priority to children marriage while the graduate and post graduates

gave importance to tax planning.

5.2.1.4 Purpose of Savings of Respondents by Monthly Income

Monthly

income/

Purpose of Savings

Children

Education

Children

Marriage

House

Construction

Retirement

Planning

Tax

Planning

Total


Up to 36 27 21 42 21 42 26 37 10 53 63 Rs.15000 (57.1) (42.9) (33.3) (66.7) (33.3) (66.7) (41.3) (58.7) (15.9) (84.1) (100) Rs.15000

to

36 38 26 48 24 50 36 38 23 51 74 Rs.25000 (48.6) (51.4) (35.1) (64.9) (32.4) (67.6) (48.6) (51.4) (31.1) (68.9) (100) Rs.25000 to

28 24 21 31 20 32 27 25 21 31 52 35000 (53.8) (46.2) (40.4) (59.6) (38.5) (61.5) (51.9) (48.1) (40.4) (59.6) (100) Rs.35000 to

25 22 19 28 12 35 23 24 21 26 47 45000 (53.2) (46.8) (40.4) (59.6) (25.5) (74.5) (48.9) (51.1) (44.7) (53.3) (100) Rs.45000 44 20 26 38 30 34 33 31 45 19 64 and above (68.8) (31.2) (40.6) (59.4) (46.9) (53.1) (51.6) (48.4) (70.3) (29.7) (100) Total 169

(56.3)

131

(43.7)

113

(37.7)

187

(62.3)

107

(35.7)

193

(64.3)

145

(48.3)

155

(51.7)

120

(40.0)

180

(60.0)

300

(100) *Figures in bracket denote %

Table 5.14 : Purpose of Savings Based On Monthly Income

0

50

100

150

200

250


Any other

Post Graduates

Graduates

Under Graduate

H.S.C.

S.S.C.

No. of

Responden

ts

Children Education

Children Marriage

House Construc

tion

Retirement Planning

Tax

Planning

Purpose of Savings

Data Analysis


81

Figure 5.13 : Purpose of Savings Based On Monthly Income

Table 5.14 and graph (Figure 5.13) gives the relationship between

monthly income and purpose of savings. A unique trend has

emerged. As the income increases, priority is given to tax planning.

Majority of the respondents give first preference to children

education followed by retirement planning.

5.2.1.5 Purpose of Savings of Respondents by Age of

Respondents

Age group /

Purpose

of

Savings

Children Education

Children Marriage

House Construction

Retirement Planning

Tax Planning

Total

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

20 to 40

115

(62.8)

68

(37.2)

68

(37.2)

115

(62.8)

81

(44.3)

102

(55.7)

79

(43.2)

104

(56.8)

76

(41.5)

107

(58.5)

183

(100)

40 to 60

49

(54.4)

41

(45.6)

39

(43.3)

51

(56.7)

21

(23.3)

69

(76.7)

47

(52.2)

43

(47.8)

33

(36.7)

57

(63.3)

90

(100)

Above 60

5

(18.5)

22

(81.5)

6

(22.2)

21

(77.8)

5

(18.5)

22

(81.5)

19

(70.4)

8

(29.6)

11

(40.7)

16

(59.3)

27

(100)

Total

169

(56.3)

131

(43.7)

113

(37.7)

187

(62.3)

107

(35.7)

193

(64.3)

145

(48.3)

155

(51.7)

120

(40)

180

(60)

300

(100)

*Figures in bracket denote % Table 5.15 : Purpose of Savings Based On Age of Respondents

0

50

100

150

200

250


Rs.45000 and above

Rs.35000 to 45000

Rs.25000 to 35000

Rs.15000 to Rs.25000

Up to Rs.15000

Children Education

Children Marriage

House Construc

tion

Retirement Planning

Tax Planning

No. of

Responden

ts

Purpose of Savings

Data Analysis


82

Figure 5.14 : Purpose of Savings Based On Age of Respondents

Table 5.15 and graph (Figure 5.14) shows the relationship between

age and purpose of savings. It can be seen that those belonging to

the age group below 40 gave the first priority to children’s education

while both the age group 40 to 60 and above 60 gave priority to

retirement planning.

0

50

100

150

200

250


Above 60

40 to 60

20 to 40

Children

Education

Children

Marriage

House

Construction

Retirement

Planning

Tax

Planning

No. of

Responden

ts

Purpose of Savings

Data Analysis


83

5.2.2 Investment Alternatives

5.2.2.1 Preference of Investment Alternatives by the

Respondents of Select Cities of Uttar Pradesh State

Sr.

No.

Investment

Alternatives


Yes

No

Yes No Total Yes No Total Yes No Total

1. Savings A/C 64 36 100 80 20 100 63 37 100 207 (69)

93 (31)

2. Real Estate 32 68 100 39 61 100 19 81 100 90

(30)

210

(70)

3. Bank Deposit /

Recurring Deposit

47 53 100 48 52 100 48 52 100 143

(47.7)

157

(52.3)

4. P.P.F. 39 61 100 47 53 100 43 57 100 129

(43)

171

(57)

5. Post Office Schemes 38 62 100 27 73 100 33 67 100 98

(32.7)

202

(67.3)

6. Gold/Silver/

Antique/Diamond

36 64 100 33 67 100 50 50 100 119

(39.7)

181

(60.3)

7. Insurance 70 30 100 63 37 100 63 37 100 196 (65.3)

104 (34.7)

8. Government

Securities

21 79 100 6 94 100 12 88 100 39

(13)

261

(87)

9. Pension Schemes 62 38 100 79 21 100 72 28 100 213

(71)

87

(29)

10. Share Market/

Mutual Fund

43 57 100 59 41 100 42 58 100 144

(48)

156

(52)

11.

Company Fixed

Deposit/Debentures/

Bonds/Chit Funds

8

92

100

9

91

100

9

91

100

26

(8.7))

274

(91.3)

12. Any Other 4 96 100 3 97 100 6 94 100 13

(4.3)

287

(95.7)


Table 5.16 : Preference of Investment

Data Analysis


84

Figure 5.15 : Preference of Investment

Table 5.16 and graph (Figure 5.15) shows the preference of

investment alternatives by the respondents of Lucknow, Kanpur and

Allahabad Cities. Savings A/C, Pension schemes and Insurance are

popular tools of investment in selected cities of Uttar Pradesh state.

69% respondents give preference to saving A/C, 71% respondents

give preference to Pension schemes and 65.3% respondents give

preference to Insurance.

0

50

100

150

200

250

300

350

Allahabad (No)

Allahabad (Yes)

Kanpur (No)

Kanpur (Yes)

Lucknow (No)

Lucknow (Yes)No.

of

Respon

dents

Preferences

Data Analysis


85

5.2.2.2 Rank for Investment Alternatives (Lucknow City)

Sr.

No.

Investment Alternatives/

Rank

1 2 3 4 5 6 7 8 9 10 11 12 Total

1. Savings A/C 28 07 07 17 10 06 07 04 04 07 02 01 100

2. Real Estate 14 09 10 04 08 13 07 14 06 07 05 03 100

3. Bank Deposit /Recurring

Deposit

05 14 13 10 10 07 15 13 08 03 01 01 100

4. P.P.F. 16 07 11 06 08 09 11 06 15 05 03 03 100

5. Post Office Schemes 10 09 10 11 06 09 09 15 06 09 05 01 100

6. Gold/Silver/Antique/Diamond 14 14 03 03 06 06 10 12 20 03 09 00 100

7. Insurance 03 18 23 13 09 10 06 05 04 02 03 04 100

8. Government Securities 03 05 08 10 06 08 08 05 11 19 10 07 100

9. Pension Schemes 03 14 11 18 12 08 09 10 07 06 01 01 100

10. Share Market/Mutual Fund 06 03 04 08 13 15 06 07 10 14 11 03 100

11. Company Fixed Deposit/

Debentures/Bonds/Chit

Funds

00 00 01 00 11 09 08 03 10 18 38 02 100

12. Any Other 00 00 00 01 02 01 02 04 01 07 11 71 100

Table 5.17 : Rank for Investment Alternatives in Lucknow

Figure 5.16 : Rank for Investment Alternatives In Lucknow

0

20

40

60

80

100

120Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

No.

of

Respon

dents

Sources

Data Analysis


86

5.2.2.3 Rank for Investment Alternatives (Kanpur City)

Sr.

No.


Rank

1 2 3 4 5 6 7 8 9 10 11 12 Total

1. Savings A/C 21 13 10 15 12 07 08 06 03 02 02 01 100

2. Real Estate 14 10 06 08 12 11 05 12 03 08 09 02 100


Deposit

06 12 12 11 12 07 11 13 07 07 01 01 100

4. P.P.F. 10 11 06 11 09 11 13 08 06 04 11 00 100



7. Insurance 10 13 20 06 06 15 07 09 04 07 02 01 100


9. Pension Schemes 12 14 20 14 09 06 06 06 03 06 02 02 100




Funds

00 01 02 02 04 05 03 09 07 13 48 06 100

12. Any Other 00 01 00 00 04 03 01 01 01 03 08 78 100

Table 5.18 : Rank for Investment Alternatives in Kanpur

Figure 5.17 : Rank for Investment Alternatives in Kanpur

0

20

40

60

80

100

120Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

No.

of

Respon

dents

Sources

Data Analysis


87

5.2.2.4 Rank for Investment Alternatives (Allahabad City)

Sr.

No.


Rank

1 2 3 4 5 6 7 8 9 10 11 12 Total

1. Savings A/C 26 07 16 10 01 04 06 03 05 13 08 01 100

2. Real Estate 09 04 05 07 08 12 11 09 17 09 03 06 100


Deposit

03 14 09 13 12 10 05 18 05 06 04 01 100

4. P.P.F. 10 16 04 09 13 14 11 07 08 03 04 01 100



7. Insurance 12 17 19 12 09 05 05 03 10 05 02 01 100


9. Pension Schemes 10 17 12 15 13 05 05 09 04 04 03 03 100




Funds

00 00 01 03 04 05 05 05 04 17 48 08 100

12. Any Other 01 00 02 01 05 06 03 01 04 04 05 68 100

Table 5.19 : Rank for Investment Alternatives in Allahabad

Figure 5.18 : Rank for Investment Alternatives in Allahabad

0

20

40

60

80

100

120Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

No.

of

Respon

dents

Sources

Data Analysis


88

5.2.2.5 Rank for Investment Alternatives for Select Cities of

Uttar Pradesh

Sr. No.

Investment Alternatives/ Rank

1 2 3 4 5 6 7 8 9 10 11 12 Total

1. Savings A/C 75 27 33 42 23 17 21 13 12 22 12 03 300

2. Real Estate 37 23 21 19 28 36 23 35 26 24 17 11 300


Deposit

14 40 34 34 34 24 31 44 20 16 6 03 300

4. P.P.F. 36 34 21 26 30 34 35 21 29 12 18 04 300



7. Insurance 25 48 62 31 24 30 18 17 18 14 07 06 300


9. Pension Schemes 25 45 43 47 34 19 20 25 14 16 06 06 300




Funds

00 01 04 05 19 19 16 17 21 48 134 16 300

12. Any Other 01 01 02 02 11 10 06 06 06 14 24 217 300

Table 5.20 : Rank for Investment Alternatives in Select Cities

Figure 5.19 : Rank for Investment Alternatives in Select Cities

0

50

100

150

200

250

300

350Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

Sources

No.

of

Respon

dents

Data Analysis


89

The respondents were asked to rank their preferences regarding their

choice of investment alternatives. Garrett’s ranking method is

applied to find out the most popular investment source in the select

cities of Uttar Pradesh state.

According to Garrett’s ranking formula,

Percent position =

Where,

Rank given for the ith variable by jth respondents

Number of variable ranked by jth respondents

By using above formula to calculate % position, the obtained result is

compared with Garrett’s ranking table value. The total scores and

mean scores of each item are found out and rank is given according

to the mean scores.

5.2.2.6 Garrett’s Ranking Table (Lucknow City)

Sr. No. Investment Alternatives/ Rank Total

Scores

Mean

Scores

Rank

1. Savings A/C 6183 61.83 1

2. Real Estate 5457 54.57 6

3. Bank Deposit /Recurring Deposit 5579 55.79 3

4. P.P.F. 5526 55.26 5

5. Post Office Schemes 5406 54.06 7

6. Gold/Silver/Antique/Diamond 5346 53.46 8

7. Insurance 5779 57.79 2

8. Government Securities 4572 45.72 10

9. Pension Schemes 5576 55.76 4

10. Share Market/Mutual Fund 4787 47.87 9


Debentures/Bonds/Chit Funds

3728 37.28 11

12. Any Other 2278 22.78 12

Table 5.21 : Ranking For Investment Alternatives

Data Analysis


90

Figure 5.20 : Ranking For Investment Alternatives

5.2.2.7 Garrett’s Ranking Table (Kanpur City)

Sr.

No.

Investment Alternatives/ Rank Total

Scores

Mean

Scores

Rank

1. Savings A/C 6207 62.07 1

2. Real Estate 5454 54.54 6


4. P.P.F. 5419 54.19 7



7. Insurance 5778 57.78 3





Debentures/Bonds/Chit Funds 3464 34.64

11

12. Any Other 2228 22.28 12


0

10

20

30

40

50

60

70

Mean Scores

Rank

Sources

Tota

l M

ean

Score

an

d R

ank

s

Data Analysis


91


5.2.2.8 Garrett’s Ranking Table (Allahabad City)


Scores

Mean

Scores Rank

1. Savings A/C 5889 58.89 2

2. Real Estate 4944 49.44 8


4. P.P.F. 5642 56.42 5



7. Insurance 5990 59.90 1





Debentures/Bonds/Chit Funds 3359 33.59 11

12. Any Other 2639 26.39 12


0

10

20

30

40

50

60

70Mean Scores

Rank

Sources

Tota

l M

ean

Score

an

d R

ank

s

Data Analysis


92


5.2.2.9 Garrett’s Ranking Table for All the Select Cities of Uttar

Pradesh State


Scores

Mean

Scores Rank

1. Savings A/C 18279 60.93 1

2. Real Estate 15855 52.85 7


4. P.P.F. 16587 55.29 4



7. Insurance 17547 58.49 2





Debentures/Bonds/Chit Funds 10551 35.17

11

12. Any Other 7145 23.82 12


0

10

20

30

40

50

60

70

Mean Scores

Rank

Sources

Tota

l M

ean

Score

an

d R

ank

s

Data Analysis


93


From Table 5.20, 5.21 and 5.22 the most popular sources of

investment in Lucknow, Kanpur and Allahabad Cities can be

summarized as follows.

Rank Lucknow Kanpur Allahabad

1 Savings A/C Savings A/C Insurance

2 Insurance Pension Schemes Savings A/C

3 Bank Deposit /Recurring

Deposit

Insurance Gold/Silver/Antique/Diamond

4 Pension

Schemes

Bank Deposit

/Recurring Deposit

Pension Schemes

5

P.P.F. Share Market/Mutual

Fund

P.P.F.

Table 5.25 : Top Five Investment Alternatives in Select Cities

Table 5.25, indicates that the most popular sources of investment

are Savings A/C, Insurance, Pension Schemes, P.P.F, bank deposit

and Gold & Silver. Respondents do not prefer to invest in Real estate,

Post office scheme, Government securities, Company deposits,

Debentures, Bonds etc.

0

10

20

30

40

50

60

70Mean Scores

Rank

Sources

Tota

l M

ean

Score

an

d R

ank

s

Data Analysis


94

5.2.2.10 Investment Alternatives of Respondents by Occupation

Investment

alternatives/

Occupation

Business Salaried Farming

and allied activities

Any Other Total

No. % No. % No. % No. % No. %

Savings A/C

Yes 57 67.06 81 66.39 37 69.81 33 82.50 208 69.33

No 28 32.94 41 33.61 16 30.19 07 17.50 92 30.67

Real Estate

Yes 27 31.76 33 38.82 13 24.53 15 37.50 88 29.33

No 58 68.24 89 72.95 40 75.47 25 62.50 212 70.67

Bank Deposits

Yes 38 44.71 53 43.44 29 54.72 21 52.50 141 47.00

No 47 55.29 69 56.56 24 45.28 19 47.50 159 53.00

P.P.F.

Yes 30 35.29 64 52.46 21 39.62 13 32.50 128 42.67

No 55 64.71 58 47.54 32 60.38 27 67.50 172 57.33

Post Office

Yes 26 30.59 33 27.05 17 32.08 20 50.00 96 32.00

No 59 69.41 89 72.95 36 67.92 20 50.00 204 68.00

Gold/Silver

Yes 31 36.47 51 41.80 21 39.62 14 35.00 117 39.00

No 54 63.53 71 58.20 32 60.38 26 65.00 183 61.00

Insurance

Yes 52 61.76 87 71.31 34 64.15 24 60.00 197 65.67

No 33 38.82 35 28.69 19 35.85 16 40.00 103 34.33

Government

Securities

Yes 15 17.65 10 08.20 08 15.09 06 15.00 39 13.00

No 70 82.35 112 91.80 45 84.91 34 85.00 261 87.00

Pension

Schemes

Yes 59 69.41 89 72.95 39 73.58 27 67.50 214 71.33

No 26 30.59 33 27.05 14 26.42 13 32.50 86 28.67

Share Market/Mutual

Fund

Yes 46 54.12 56 45.90 26 49.06 16 40.00 144 48.00

No 39 45.88 66 54.10 27 50.94 24 60.00 156 52.00

Company FD

Yes 8 09.41 11 09.02 04 07.55 03 07.50 26 8.67

No 77 90.59 111 90.98 49 92.45 37 92.50 274 91.33

Any Other

Yes 02 02.35 03 02.46 03 05.66 05 12.50 13 4.33

No 83 97.65 119 97.54 50 94.34 35 87.50 287 95.67

Total 85 100 122 100 53 100 40 100 300 100

Table 5.26 : Investment Alternatives Based On Occupation

Data Analysis


95

The common investment tools are Savings A/c, Insurance, Pension

Schemes, Bank/Recurring deposits. Further, Business Class gave

importance to Saving A/c and salaried class preferred to invest their

money in insurance and pension scheme in addition to the above

tools. It is also found that farmers gave importance to investment in

bank deposits. Only others preferred to invest their money in post

office schemes. This indicates that others preferred safe investment.

Data Analysis


96

5.2.2.11 Investment Alternatives of Respondents by Educational

Qualifications

Investment

alternatives/ Education

SSC HSC Under

Graduate Graduate

Post

Graduate

Any

other Total

No. % No. % No. % No. % No. % No. % No. %

Savings Yes 21 87.50 28 87.50 16 84.21 89 68.46 38 50.67 15 75.00 207 69.00

No 03 12.50 04 12.50 03 15.79 41 31.54 37 49.33 05 25.00 93 31.00

Real

Estate

Yes 09 37.50 08 25.00 07 36.84 40 30.77 21 28.00 05 25.00 90 30.00

No 15 62.50 24 75.00 12 63.16 90 69.23 54 72.00 15 75.00 210 70.00

Bank

Deposits

Yes 12 50.00 12 37.50 05 26.32 67 51.54 36 48.00 10 50.00 142 47.33

No 12 50.00 20 62.50 14 73.68 63 48.46 39 52.00 10 50.00 158 52.67

PPF Yes 09 37.50 14 43.75 06 31.58 52 40.00 37 49.33 10 50.00 128 42.67

No 15 62.50 18 56.25 13 68.42 78 60.00 38 50.67 10 50.00 172 57.33

Post

Office

Yes 09 37.50 10 31.25 06 31.58 44 33.85 21 28.00 08 40.00 98 32.67

No 15 62.50 22 68.75 13 68.42 86 66.15 54 72.00 12 60.00 202 67.33

Gold/

Silver

Yes 08 33.33 06 18.75 09 47.37 50 38.46 39 52.00 07 35.00 119 39.67

No 16 66.67 26 81.25 10 52.63 80 61.54 36 48.00 13 65.00 181 60.33

Insurance Yes 14 58.33 17 53.13 12 63.16 84 64.62 52 69.33 17 85.00 196 65.33

No 10 41.67 15 46.87 07 36.84 46 35.38 23 30.67 03 15.00 104 34.67

Govt.

Securities

Yes 06 25.00 09 28.13 02 10.53 11 08.46 09 12.00 02 10.00 39 13.00

No 18 75.00 23 71.87 17 89.47 119 91.54 66 88.00 18 90.00 261 87.00

Pension

Schemes

Yes 13 54.17 17 53.12 12 63.16 93 71.54 61 81.33 17 85.00 213 71.00

No 11 45.83 15 46.88 07 36.84 37 28.46 14 18.67 03 15.00 87 29.00

Share

Market

Yes 12 50.00 10 31.25 07 36.84 67 51.54 40 53.33 08 40.00 144 48.00

No 12 50.00 22 68.75 12 63.16 63 48.46 35 46.67 12 60.00 156 52.00

Company

FD

Yes 04 16.67 02 06.25 01 05.26 08 06.15 09 12.00 02 10.00 26 8.67

No 20 83.33 30 93.75 18 94.74 122 93.85 66 88.00 18 90.00 274 91.33

Any Other Yes 02 08.33 04 12.50 01 05.26 04 03.08 03 04.00 01 05.00 15 5.00

No 22 91.67 28 87.50 18 94.74 126 96.92 72 96.00 19 95.00 285 95.00

Total 24 100 32 100 19 100 130 100 75 100 20 100 300 100

Table 5.27 : Investment Alternatives Based On Educational Qualifications

The Table 5.27 shows that investment alternatives by education.

Both the graduate and non-graduates prefer to invest in savings

account, pension schemes, share market, bank deposits and P.P.F.

Data Analysis


97

In addition to the above six investment alternatives, non-graduates

prefer to invest in post-office and savings account while the

graduates prefer to invest in gold/silver. This signifies those post-

office schemes are still popular among non-graduates.

5.2.2.12 Investment Alternatives of Respondents by Monthly

Income

Investment

alternatives/ Monthly

Income

Up to

Rs.15000

Rs.15000

to Rs.25000

Rs.25000

to Rs.35000

Rs.35000

to Rs.45000

Above

Rs.45000

Total

No. % No. % No. % No. % No. % No. %

Savings Yes 51 80.95 56 75.68 40 76.92 29 61.70 31 48.44 207 69.00

No 12 19.05 18 24.32 12 23.08 18 38.30 33 51.56 93 31.00

Real Estate Yes 15 23.81 22 29.73 12 23.08 14 29.79 27 42.19 90 30.00

No 48 76.19 52 70.27 40 76.92 33 70.21 37 57.81 210 70.00

Bank

Deposits

Yes 30 47.62 34 45.95 23 44.23 26 55.32 30 46.88 143 47.67

No 33 52.38 40 54.05 29 55.77 21 44.68 34 53.13 157 52.33

PPF Yes 21 33.33 36 48.65 26 50.00 22 46.81 24 37.50 129 43.00

No 42 66.67 38 51.35 26 50.00 25 53.19 40 62.50 171 57.00

Post Office Yes 27 42.86 30 40.54 15 28.85 08 17.02 18 28.13 98 32.67

No 36 57.14 44 59.46 37 71.15 39 82.98 46 71.88 202 67.33

Gold/Silver Yes 24 38.20 16 21.62 28 53.85 19 40.43 32 50.00 119 39.67

No 39 61.90 58 78.38 24 46.15 29 61.70 32 50.00 182 60.67

Insurance Yes 41 65.08 50 67.57 32 61.54 27 57.45 47 73.44 197 65.67

No 22 34.92 24 32.43 20 38.46 20 42.55 18 28.13 104 34.67

Government

Securities

Yes 11 17.46 10 13.51 06 11.54 08 17.02 04 06.25 39 13.00

No 52 82.54 64 86.49 46 88.46 39 82.98 60 93.75 261 87.00

Pension

Schemes

Yes 42 66.67 54 72.97 29 55.77 35 74.47 53 82.81 213 71.00

No 21 33.33 20 27.03 23 44.23 12 25.53 11 17.19 87 29.00

Share

Market

Yes 23 36.51 34 45.95 23 44.23 26 55.32 38 59.38 144 48.00

No 40 63.49 40 54.05 29 55.77 21 44.68 26 40.63 156 52.00

Company

FD

Yes 06 09.52 08 10.81 01 01.92 03 06.38 08 12.50 26 8.67

No 57 90.48 66 89.19 51 98.08 44 93.62 56 87.50 274 91.33

Any Other Yes 07 11.11 03 04.05 00 00.00 02 04.26 01 01.56 13 4.33

No 56 88.89 71 95.95 52 100.00 45 95.74 63 98.44 287 95.67

Total 63 100 74 100 52 100 47 100 64 100 300 100

Table 5.28 : Investment Alternatives Based On Monthly Income

Data Analysis


98

Table 5.28 shows the investment alternatives by monthly income. It

is significant to note that the common investment alternative

between the monthly income group below Rs. 25000 & above Rs.

25000 are Savings A/c, Bank Deposits, P.P.F., Post Office,

Insurance, Pension schemes, Share Market. In addition to the above

investment alternatives the monthly income group below Rs.25000

prefers to invest in Post office Schemes while the monthly income

group above Rs.25000 prefers to invest in gold and silver. If we

compare Table 5.27 and Table 5.28 there is a striking similarity.

Non-graduates and monthly income group of below Rs.25000 prefer

to invest in Post-office schemes, while graduates and monthly income

groups above Rs.25000 prefer to invest in Gold/Silver.

Data Analysis


99

5.2.3 Reasons for Investing in Pension Schemes

5.2.3.1 Reasons for investment in Pension Schemes by

Respondents of Select Cities of Uttar Pradesh State

Sr.

No. Reasons


Yes No

Yes No Total Yes No Total Yes No Total

1 Old Age Safety 70 30 100 83 17 100 64 36 100 217

(72.3)

83

(27.7)

2 Living

Standard 51 49 100 83 17 100 68 32 100

202

(67.3)

98

(32.7)

3 Tax

Exemption 58 42 100 61 39 100 55 45 100

174

(58)

126

(42)

4 Diversification

of Future Risk 34 66 100 22 78 100 37 63 100

93

(31)

207

(69)

5 Choice of

Scheme 26 74 100 25 75 100 22 78 100

73

(24.3)

227

(75.7)

6 Market Linked 30 70 100 38 62 100 30 70 100 98

(32.7)

202

(67.3)

7 Flexibility 35 65 100 24 76 100 22 78 100 81

(27)

219

(73)

8 Reliability 37 63 100 16 84 100 18 82 100 71

(23.7)

229

(76.3)

9 Independence 44 56 100 47 53 100 34 66 100 125

(41.7)

175

(58.3)

10 Grievance

Redressal

Facility

10 90 100 1 99 100 5 95 100 16

(5.3)

284

(94.7)

11 Prompt Service

12 88 100 8 92 100 5 95 100 25

(8.3) 275

(91.5)

12 Adequate Information

13 87 100 7 93 100 11 89 100 31

(10.3) 269

(89.7)

13 Professional Management

35 65 100 14 86 100 25 75 100 74

(24.6) 226

(75.3)

14 Low cost 33 67 100 51 49 100 37 63 100 121

(40.3) 179

(59.6)

15 Transparency 21 79 100 36 64 100 32 68 100 89

(29.6) 211

(70.3)

16 Well Regulated

29 71 100 20 80 100 25 75 100 74

(24.6) 226

(75.3)

17 Convenient 40 60 100 31 69 100 23 77 100 94

(31.3) 206

(68.6)

* Figures in the brackets denotes %

Table 5.29 : Reasons for investment in Pension Schemes

Data Analysis


100

Figure 5.24 : Reasons for investment in Pension Schemes

Table 5.29 and graph (Figure 5.24) shows the reasons for investment

in Pension schemes by respondents of Lucknow, Kanpur and

Allahabad. Out of 300 respondents, most of respondents invested in

Pension schemes because of old age safety at retirement (72.3%),

good livening standard (67.3%) was the second reason for investing

in pension scheme. Respondents felt that their investment in pension

scheme was safe and not very risky. The Third reason for investing in

pension scheme was because of tax exemption facility (58%). Also

independence (41.7%) and low cost (40.3%) were the other two

reasons for investing in pension schemes.

0

50

100

150

200

250

300

350

Old

Age S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of …

Ch

oic

e o

f S

ch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce R

edre

ssal …

Pro

mpt

Serv

ice

Adequ

ate

In

form

ati

on

Pro

fessio

nal …

Low

cost

Tra

nspare

ncy

Well R

egu

late

d

Con

ven

ien

t

Allahabad (No)

Allahabad (Yes)

Kanpur (No)

Kanpur (Yes)

Luknow (No)

Luknow (Yes)

Nu

mber

of

Respon

den

ts

Sources

Data Analysis


101


(Lucknow City)

Sr.

No.

Reasons of

Investments /Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

1 Old Age Safety 46 13 08 02 05 05 01 07 00 00 02 03 01 00 02 02 03 100

2 Living Standard 24 21 03 03 07 05 16 05 02 05 05 01 00 01 00 01 01 100

3 Tax Exemption 12 10 13 21 05 05 06 04 04 4 03 04 01 00 02 00 06 100

4 Diversification

of Future Risk

04 09 13 08 02 05 06 06 19 07 03 07 07 01 01 02 00 100

5 Choice of

Scheme

02 06 11 06 01 19 05 05 11 05 08 06 05 02 01 05 02 100

6 Market Linked 03 05 08 07 08 06 05 07 02 03 07 04 02 04 03 18 08 100

7 Flexibility 00 03 04 05 15 07 06 22 05 05 04 03 06 02 07 00 06 100

8 Reliability 00 02 19 04 04 07 01 08 05 09 03 07 05 05 06 05 10 100

9 Independence 02 07 04 12 13 04 08 03 10 06 21 01 04 03 00 01 01 100

10 Grievance

Redressal

Facility

01 00 01 00 01 04 02 03 01 03 09 11 03 13 20 06 22 100

11 Prompt service 00 00 02 02 01 05 08 02 04 11 05 04 07 09 11 05 24 100

12 Adequate information

00 01 01 02 03 02 05 02 04 01 09 22 05 11 12 07 13 100

13 Professional management

01 01 01 02 19 08 04 03 04 03 03 04 03 04 10 12 18 100

14 Low cost 02 02 01 05 06 09 05 06 04 04 05 03 05 05 04 07 27 100

15 Transparency 00 01 01 02 03 05 08 01 08 05 03 06 22 08 05 11 11 100

16 Well regulated 00 01 02 15 02 01 04 06 05 03 03 06 10 07 06 07 22 100

17 Convenient 03 17 03 04 03 04 02 05 03 04 07 07 05 05 06 03 19 100

Table 5.30 : Ranking Reasons for Investment in Pension Scheme

Data Analysis


102

Figure 5.25 : Ranking Reasons for Investment in Pension Scheme

0

20

40

60

80

100

120Rank17

Rank16

Rank15

Rank14

Rank13

Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

Num

ber o

f R

espondents

Reasons

Data Analysis


103


(Kanpur City)

Sr.

No.

Reasons of

Investments /Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Total

1 Old Age Safety 21 07 17 17 12 09 02 03 05 03 00 00 00 01 00 00 03 100

2 Living Standard 32 18 12 13 02 04 08 03 02 02 01 01 02 00 00 00 00 100

3 Tax Exemption 16 16 07 09 10 06 07 00 05 03 03 03 02 03 02 02 06 100

4 Diversification of Future Risk

02 06 04 03 05 06 07 13 09 05 11 11 04 05 03 02 04 100

5 Choice of Scheme 02 03 05 03 02 07 04 09 10 11 14 08 08 07 01 02 04 100

6 Market Linked 04 13 12 04 13 05 05 05 04 09 09 05 04 05 01 02 00 100

7 Flexibility 01 02 04 04 07 08 06 07 13 04 06 07 05 06 04 06 10 100

8 Reliability 00 00 03 04 07 05 07 05 09 08 06 06 07 03 08 06 16 100

9 Independence 06 08 09 08 07 08 09 06 09 09 04 02 06 04 02 01 02 100

10 Grievance Redressal

Facility 00 03 01 02 01 03 03 05 03 10 02 07 09 12 09 09 21 100

11 Prompt service 00 00 00 03 04 02 02 07 03 03 07 07 10 08 18 08 18 100

12 Adequate

Information 01 00 01 04 02 05 04 04 04 01 03 08 10 11 09 19 14 100

13 Professional

Management 02 02 03 02 02 03 05 03 02 05 03 05 08 10 12 08 25 100

14 Low Cost 09 08 09 05 05 11 04 02 03 03 04 05 03 05 06 07 11 100

15 Transparency 00 02 04 09 09 07 09 06 04 04 07 03 01 04 10 06 15 100

16 Well Regulated 02 06 01 04 06 03 06 12 04 04 06 03 06 03 06 04 14 100

17 Convenient 01 05 09 03 03 07 08 03 06 06 03 04 02 06 05 09 20 100


Data Analysis


104


0

20

40

60

80

100

120

Old

Age S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of

Fu

ture

Ris

k

Ch

oic

e o

f S

ch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce R

edre

ssal F

acilit

y

Pro

mpt

Serv

ice

Adequ

ate

In

form

ati

on

Pro

fessio

nal M

an

agem

en

t

Low

cost

Tra

nspare

ncy

Well R

egu

late

d

Con

ven

ien

t

Rank17

Rank16

Rank15

Rank14

Rank13

Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

Reasons

Num

ber o

f R

espondents

Data Analysis


105


(Allahabad City)

Sr.

No.

Reasons of

Investments /Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

1 Old Age Safety 35 09 09 05 06 06 08 02 05 02 04 01 02 01 02 00 03 100

2 Living Standard 21 29 10 04 08 08 03 03 03 05 01 02 00 03 00 00 00 100

3 Tax Exemption 14 15 13 10 05 06 07 04 03 05 03 03 04 04 02 01 01 100

4 Diversification of Future Risk

07 09 12 09 06 02 10 09 10 05 03 03 06 03 01 02 03 100

5 Choice of Scheme 00 07 02 03 05 06 05 12 05 08 05 09 03 09 07 03 11 100

6 Market Linked 06 03 07 09 11 05 06 10 06 04 08 02 06 06 03 03 05 100

7 Flexibility 01 03 04 07 05 07 05 01 09 09 09 06 08 04 06 02 14 100

8 Reliability 00 00 07 08 03 02 10 06 06 08 10 05 05 06 06 03 15 100

9 Independence 05 05 09 07 11 17 10 07 07 05 04 03 06 02 00 00 02 100

10 Grievance

Redressal Facility 01 03 00 01 00 01 02 02 01 09 03 13 08 10 11 11 24 100

11 Prompt Service 01 01 02 00 01 02 03 07 06 05 13 10 06 10 07 12 14 100

12 Adequate

Information 00 04 03 02 03 02 02 03 02 06 07 05 09 05 11 13 23 100

13 Professional

Management 01 01 05 07 06 05 07 04 02 03 02 04 11 09 08 07 18 100

14 Low Cost 03 01 10 10 08 05 07 01 07 03 05 07 05 06 06 05 11 100

15 Transparency 01 03 02 05 05 15 01 02 11 03 05 06 05 04 09 11 12 100

16 Well regulated 01 01 02 08 09 04 04 08 03 05 06 09 11 05 03 14 07 100

17 Convenient 01 05 00 03 05 03 07 10 05 04 05 04 05 13 03 04 23 100


Data Analysis


106


0

20

40

60

80

100

120

Rank17

Rank16

Rank15

Rank14

Rank13

Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

Num

ber o

f R

espondents

Reasons

Data Analysis


107

5.2.3.5 Ranks - Reasons for Investment in Pension Scheme in

Select Cities of Uttar Pradesh State

Sr. No.

Reasons of Investments

/Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

1 Old Age Safety 102 29 34 24 23 20 11 12 10 05 06 04 03 02 04 02 09 300

2 Living

Standard

77 68 25 20 17 17 27 11 07 12 07 04 02 04 00 01 01 300

3 Tax

Exemption

42 41 33 40 20 17 20 08 12 12 09 10 07 07 06 03 13 300

4 Diversification

of Future Risk

13 24 29 20 13 13 23 28 38 17 17 21 17 09 05 06 07 300

5 Choice of

Scheme

04 16 18 12 08 32 14 26 26 24 27 23 16 18 09 10 17 300

6 Market Linked 13 21 27 20 32 16 16 22 12 16 24 11 12 15 07 23 13 300

7 Flexibility 02 08 12 16 27 22 17 30 27 18 19 16 19 12 17 08 30 300

8 Reliability 00 02 29 16 14 14 18 19 20 25 19 18 17 14 20 14 41 300

9 Independence 13 20 22 27 31 29 27 16 26 20 29 06 16 09 02 02 05 300

10 Grievance

Redressal

Facility

02 06 02 03 02 08 07 10 05 22 14 31 20 35 40 26 67 300

11 Prompt

Service

01 01 04 05 06 09 13 16 13 19 25 21 23 27 36 25 56 300


01 05 05 08 08 09 11 09 10 08 19 35 24 27 32 39 50 300

13 Professional

management

04 04 09 11 27 16 16 10 08 11 08 13 22 23 30 27 61 300

14 Low cost 14 11 20 20 19 25 16 09 14 10 14 15 13 16 16 19 49 300

15 Transparency 01 06 07 16 17 27 18 09 23 12 15 15 28 16 24 28 38 300

16 Well regulated 03 08 05 27 17 08 14 26 12 12 15 18 27 15 15 25 53 300

17 Convenient 05 27 12 10 11 14 17 18 14 14 15 15 12 24 14 16 62 300


Data Analysis


108


0

50

100

150

200

250

300

350O

ld A

ge S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of

Fu

ture

Ris

k

Ch

oic

e o

f S

ch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce R

edre

ssal F

acilit

y

Pro

mpt

Serv

ice

Adequ

ate

In

form

ati

on

Pro

fessio

nal M

an

agem

en

t

Low

cost

Tra

nspare

ncy

Well R

egu

late

d

Con

ven

ien

t

Rank17

Rank16

Rank15

Rank14

Rank13

Rank12

Rank11

Rank10

Rank9

Rank8

Rank7

Rank6

Rank5

Rank4

Rank3

Rank2

Rank1

Num

ber o

f R

espondents

Reasons

Data Analysis


109

By using the Garrett’s formula to calculate the % position, the result

which is obtained is compared with Garrett’s ranking table value and

total scores of each reason are found out.

5.2.3.6 Garrett’s Ranking Table Reasons for Investment in

Pension Scheme in Lucknow City

Sr. No. Reasons of Investment Total Scores Mean Scores Rank

1 Old Age Safety

7073 70.73

1

2 Living Standard

6629 66.29

2

3 Tax Exemption

6118 61.18

3

4 Diversification of Risk

5627 56.27

4

5 Choice of Scheme

5351 53.51

6

6 Market Linked

4725 47.25

9

7 Flexibility

5054 50.54

7

8 Reliability

4792 47.92

8

9 Independence

5468 54.68

5

10 Grievance Redressal Facility

3352 33.52

17

11 Prompt Service

3633 36.33

16


3776 37.76

15


4115 41.15

11

14 Low Cost

3979 39.79

12

15 Transparency

3945 39.45

14

16 Well Regulated

3970 39.7

13

17 Convenient

4631 46.31

10

Table 5.34 : Rank and Mean Score of Reasons for Investment

Data Analysis


110

Figure 5.29 : Rank and Mean Score of Reasons for Investment

5.2.3.7 Garrett’s Ranking Table - Reasons for Investment in

Pension Scheme in Kanpur City


1 Living Standard 6680 66.8 2

2 Old Age Safety 7152 71.52 1

3 Tax Exemption 6063 60.63 3

4 Market Linked 4988 49.88 7

5 Independence 4827 48.27 8

6 Low Cost 5717 57.17 4

7 Diversification of Risk 4582 45.82 9

8 Choice of Scheme 4167 41.67 12

9 Flexibility 5624 56.24 5

10 Transparency 3619 36.19 15






16 Low Cost 4055 40.55 13



0

10

20

30

40

50

60

70

80

Old

Age S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of

risk

Ch

oic

e o

f sch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce r

edre

ssal …

Pro

mpt

serv

ice

Adequ

ate

in

form

ati

on

Pro

fessio

nal …

Low

cost

Tra

nspare

ncy

Well r

egu

late

d

Con

ven

ien

t

Mean Scores

Rank

Reasons

Tota

l M

ean S

core

and R

anks

Data Analysis


111



Pension Scheme in Allahabad City






5 Choice of Scheme 4516 45.16 8


7 Flexibility 4489 44.89 9

8 Reliability 4378 43.78 11


10 Grievance Redressal

Facility 3358 33.58

17

11 Prompt Service 3795 37.95 15

12 Adequate Information 3584 35.84 16

13 Professional Management 4119 41.19 13

14 Low Cost 4780 47.8 7

15 Transparency 4319 43.19 12

16 Well Regulated 4401 44.01 10

17 Convenient 4032 40.32 14


0

10

20

30

40

50

60

70

80

Old

Age S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of …

Ch

oic

e o

f sch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce …

Pro

mpt

serv

ice

Adequ

ate

…

Pro

fessio

nal …

Low

cost

Tra

nspare

ncy

Well r

egu

late

d

Con

ven

ien

t

Mean Scores

Rank

Reasons

Tota

l M

ean S

core

and R

anks

Data Analysis


112


According to Garrett’s ranking tables (5.34, 5.35, 5.36), the main ten

reasons for investment in Pension Scheme in three cities are

summarized as follows:


1. Old Age Safety Living Standard Living Standard

2. Living Standard Old Age Safety Old Age Safety

3. Tax Exemption Tax Exemption Tax Exemption

4. Diversification of Risk Market Linked Independence

5. Independence Independence Diversification of Risk

6. Choice of Scheme Low Cost Market Linked

7. Flexibility Diversification of Risk Low Cost

8. Reliability Choice of Scheme Choice of Scheme

9. Market Linked Flexibility Flexibility

10. Convenient Transparency Well Regulated

Table 5.37 : Reasons for Investment in Pension Scheme in Select cities

0

10

20

30

40

50

60

70

80

Old

Age S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of

risk

Ch

oic

e o

f sch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce r

edre

ssal …

Pro

mpt

serv

ice

Adequ

ate

in

form

ati

on

Pro

fessio

nal …

Low

cost

Tra

nspare

ncy

Well r

egu

late

d

Con

ven

ien

t

Mean Scores

Rank

Tota

l M

ean S

core

and R

anks

Reasons

Data Analysis


113

Old Age Safety, Living Standard and tax exemption were the top

three common reasons for investing in all the three select cities of

Uttar Pradesh in their order of priority.


Pension Scheme in Select Cities in Uttar Pradesh State


Sr. No. Reasons of Investment Total

Scores

Mean

Scores

Rank

1 Old Age Safety

20467 68.22

2

2 Living Standard

20673 68.91

1

3 Tax Exemption

18400 61.33

3

4 Diversification of Risk

16313 54.38

5

5 Choice of Scheme

14694 48.98

7

6 Market Linked

15703 52.34

6

7 Flexibility

14125 47.08

8

8 Reliability

13337 44.46

10

9 Independence

16827 56.09

4

10 Grievance Redressal Facility

10329 34.43

17

11 Prompt Service

10979 36.60

16


11010 36.70

15


11849 39.50

14

14 Low cost

13851 46.17

9

15 Transparency

12724 42.41

12

16 Well Regulated

12566 41.89

13

17 Convenient

12971 43.24

11

Data Analysis


114


Table 5.38 gives the ranks for different reasons for investment in

Pension Scheme. The main ten reasons for Investment by

respondents in Pension Scheme in select cities of Uttar Pradesh are

Living Standard, Old Age Safety, Tax Exemption, Flexibility,

Independence, Diversification of risk, Market Linked, Choice of

scheme, Reliability and Grievance Redressal Facility.

0

10

20

30

40

50

60

70

80O

ld A

ge S

afe

ty

Liv

ing S

tan

dard

Tax E

xem

pti

on

Div

ers

ific

ati

on

of

risk

Ch

oic

e o

f sch

em

e

Mark

et

Lin

ked

Fle

xib

ilit

y

Reliabilit

y

Indepen

den

ce

Gri

evan

ce r

edre

ssal fa

cilit

y

Pro

mpt

serv

ice

Adequ

ate

in

form

ati

on

Pro

fessio

nal m

an

agem

en

t

Low

cost

Tra

nspare

ncy

Well r

egu

late

d

Con

ven

ien

t

Mean Scores

Rank

Tota

l M

ean S

core

and R

anks

Reasons

Data Analysis


115


Occupations

Reasons for

Investment /

Occupations

Business Salaried Farming and

Allied Activities

Any Other Total

No. % No. % No. % No. % No. %

Old Age Safety Yes 63 74.12 84 68.85 39 73.58 31 77.50 217 72.33

No 22 25.88 38 31.15 14 26.42 09 22.50 83 27.67

Living

Standard

Yes 56 65.88 89 72.95 32 60.38 25 62.50 202 67.33

No 29 34.12 33 27.05 21 39.62 15 37.50 98 32.67

Tax

Exemption

Yes 52 61.18 80 65.57 27 50.94 15 37.50 174 58.00

No 33 38.82 42 34.43 26 49.06 25 62.50 126 42.00

Diversification

of Risk

Yes 26 30.59 43 35.25 17 32.08 07 17.50 93 31.00

No 59 69.41 79 64.75 36 67.92 33 82.50 207 69.00

Choice of

Schemes

Yes 16 18.82 34 27.87 13 24.53 10 25.00 73 24.33

No 69 81.18 88 72.13 40 75.47 30 75.00 227 75.67

Market Linked Yes 28 32.94 38 31.15 19 38.85 13 32.50 98 32.67

No 57 67.06 84 68.85 34 64.15 27 67.50 202 67.33

Flexibility Yes 20 23.53 34 27.87 14 26.42 13 33.50 81 27.00

No 65 76.47 88 72.13 39 73.58 27 67.50 219 73.00

Reliability Yes 23 27.06 24 19.67 16 30.19 08 20.00 71 23.67

No 62 72.94 98 80.33 37 69.81 32 80.00 229 76.33

Independence Yes 38 44.71 45 36.89 24 45.28 18 45.00 125 41.67

No 47 55.29 77 63.11 29 54.72 22 55.00 175 58.33

Grievance Redressal

Facility

Yes 06 07.06 07 05.74 03 05.66 00 00.00 16 5.33

No 79 92.94 115 94.26 50 94.34 40 100.00 284 94.67

Prompt

Service

Yes 05 05.88 09 07.38 06 11.32 05 12.50 25 8.33

No 80 94.12 113 92.62 47 88.68 35 87.50 275 91.67

Adequate

Information

Yes 09 10.59 14 11.48 04 07.55 04 10.00 31 10.33

No 76 89.41 108 88.52 49 92.45 36 90.00 269 89.67

Table 5.39 (Continue) : Reasons for Investment Based On Occupations

Data Analysis


116

Reasons for

Investment /

Occupations

Business Salaried Farming and

Allied

Activities

Any Other Total

No. % No. % No. No. % No. % No.

Professional

Management

Yes 18 21.18 32 26.23 17 38.08 07 17.50 74 24.67

No 67 78.82 90 73.77 36 67.92 33 82.50 226 75.33

Low Cost

Yes 29 34.12 54 44.26 18 33.96 20 50.00 121 40.33

No 56 65.88 68 55.74 35 66.04 20 50.00 179 59.67

Transparency

Yes 24 28.24 39 31.97 17 32.08 09 22.50 89 29.67

No 61 71.76 83 68.03 36 67.92 31 77.50 211 70.33

Well

Regulated

Yes 15 17.65 35 28.69 13 24.53 11 27.50 74 24.67

No 70 82.35 87 71.31 40 75.47 29 72.50 226 75.33

Convenient

Yes 26 30.59 36 29.51 15 28.30 17 42.50 94 31.33

No 59 69.41 86 70.49 38 71.70 23 57.50 206 68.67

Table 5.39 : Reasons for Investment Based On Occupations

Table 5.39 reveals that Old Age Safety, Living Standard,

Independence are the most important reasons for investment in

pension scheme based on different categories of occupation.

Business class and salaried class give importance to tax exemptions.

These classes wanted to avail the tax exemption. It is also found that

both business people and salaried class give priority to market trend

before investing also but salaried and others give importance to

affordability while investing in Pension scheme. Farmers give

importance to old age safety.

Data Analysis


117


Educational Qualifications

Reasons for Investment/

Education

S.S.C. H.S.C Under Graduate

Graduate Post- Graduate

Any other

Total

No. % No. % No. % No. % No. % No. % No. %

Old Age Safety Yes 19 79.17 27 84.38 15 78.95 89 68.46 51 68.00 10 50.00 211 70.30

No 05 20.83 05 15.62 04 21.05 41 31.54 24 32.00 10 50.00 89 29.70

Living

Standard Yes 13 54.17 14 43.75 15 78.95 88 67.69 59 78.67 10 50.00 199 66.33

No 11 45.83 18 56.25 04 21.05 42 32.31 16 21.33 10 50.00 101 33.67

Tax Exemption

Yes 10 41.67 11 34.38 10 52.63 81 62.31 50 66.67 09 45.00 171 57.00

No 14 58.33 21 65.62 09 47.37 49 37.69 25 33.33 11 55.00 129 43.00

Diversification

of

Risk

Yes 04 16.67 04 12.50 02 10.53 43 33.08 31 41.33 09 45.00 93 31.00

No 20 83.33 28 87.50 17 89.47 87 66.92 44 58.67 11 55.00 207 69.00

Choice of

Scheme

Yes 04 16.67 09 28.13 03 15.79 37 28.46 14 18.67 06 30.00 73 24.33

No 20 83.33 23 671.87 16 84.21 93 71.54 61 81.33 14 70.00 227 75.67

Market Linked Yes 12 50.00 10 31.25 08 42.11 41 31.54 21 28.00 06 30.00 98 32.67

No 12 50.00 22 68.75 11 57.89 89 68.46 54 72.00 14 70.00 202 67.33

Flexibility Yes 09 37.50 06 18.75 03 15.79 37 28.46 19 25.33 07 35.00 81 27.00

No 15 62.50 26 81.25 16 84.21 93 71.54 56 74.67 13 65.00 219 73.00

Reliability Yes 08 33.33 10 31.25 03 15.79 29 22.31 10 13.33 08 40.00 68 22.67

No 16 66.67 22 68.75 16 84.21 101 77.69 65 86.67 12 60.00 232 77.33

Independence Yes 10 41.67 09 28.13 06 31.58 63 48.46 25 33.33 09 45.00 122 40.67

No 14 58.33 23 71.87 13 68.42 67 51.54 50 66.67 11 55.00 178 59.33

Grievance

Redressal

Facility

Yes 01 04.17 04 12.50 00 00.00 07 05.38 02 02.67 02 10.00 16 5.33

No 23 95.83 28 87.50 19 100 123 94.62 73 97.33 18 90.00 284 94.67

Prompt

Service

Yes 01 04.17 04 12.50 01 05.26 10 07.69 05 06.67 04 20.00 25 8.33

No 23 95.83 28 87.50 18 94.74 120 92.31 70 93.33 16 80.00 275 91.67

Adequate

Information

Yes 01 04.17 04 12.50 01 05.26 14 10.77 07 09.33 04 20.00 31 10.33

No 23 95.83 28 87.50 18 94.74 116 89.23 68 90.67 16 80.00 269 89.67

Professional

Management

Yes 07 29.17 06 18.75 00 00.00 27 20.77 27 36.00 07 35.00 74 24.67

No 17 70.83 26 81.25 19 100 103 79.23 48 64.00 13 65.00 226 75.33

Low cost

Yes 11 45.83 14 43.75 10 52.63 57 43.85 21 28.00 08 40.00 121 40.33

No 13 54.17 18 56.25 09 47.37 73 56.15 54 72.00 12 60.00 179 59.67

Transparency Yes 05 20.83 08 25.00 02 10.53 43 33.08 24 32.00 07 35.00 89 29.67

No 19 79.17 24 75.00 17 89.47 87 66.92 51 68.00 13 65.00 211 70.33

Well

Regulated

Yes 08 33.33 09 78.13 02 10.53 30 23.08 18 24.00 07 35.00 74 24.67

No 16 66.67 23 71.87 17 89.47 100 76.92 57 76.00 13 65.00 226 75.33

Convenient Yes 10 41.67 11 34.37 03 15.79 34 26.15 24 32.00 09 45.00 91 30.33

No 14 58.33 21 65.63 16 84.21 96 73.85 51 68.00 11 55.00 209 69.67

Table 5.40 : Reasons for Investment Based On Educational Qualifications

Table 5.40 indicates that eight reasons for investment in pension

scheme were similar, such as old age safety, living standard, tax

exemption, market linked, independence, low cost and convenient

Data Analysis


118

between the group of the non-graduates and graduates. The non-

graduates give importance to flexibility and reliability where as

graduates give importance to diversification of risk, choice of

schemes and transparency while investing in pension scheme.

5.2.3.12 Reasons for Investment in Pension Scheme by Age

Reasons for Investment / Age 20 - 40 40 - 60 Above 60 Total

No. % No. % No. % No. %

Old Age Safety Yes 122 66.67 75 83.33 20 74.07 217 72.33

No 61 33.33 15 16.67 07 25.93 83 27.67

Living Standard Yes 124 67.76 58 64.44 20 74.07 202 67.33

No 59 32.24 32 35.56 07 25.93 98 32.67

Tax Exemption Yes 110 60.11 50 55.56 14 51.85 174 58.00

No 73 39.89 40 44.44 13 48.15 126 42.00

Diversification of Risk Yes 57 31.15 27 30.00 09 33.33 93 31.00

No 126 68.85 63 70.00 18 66.67 207 69.00

Choice of Scheme Yes 42 22.95 25 27.78 06 22.22 73 24.33

No 141 77.05 65 72.22 21 77.78 227 75.67

Market Linked Yes 65 35.52 26 28.89 07 25.93 98 32.67

No 118 64.48 64 71.11 20 74.07 202 67.33

Flexibility Yes 46 25.14 25 27.78 10 37.04 81 27.00

No 137 74.86 65 72.22 17 62.96 219 73.00

Reliability Yes 37 20.22 28 31.11 06 22.22 71 23.67

No 146 79.78 62 68.89 21 77.78 229 76.33

Independence Yes 72 39.34 41 45.56 12 44.44 125 41.67

No 111 60.66 49 54.44 15 55.56 175 58.33

Grievance Redressal

Facility

Yes 07 03.83 07 07.78 02 07.41 16 5.33

No 176 96.17 83 92.22 25 92.59 284 94.67

Prompt Service Yes 14 07.65 07 07.78 04 14.81 25 8.33

No 169 92.35 83 92.22 23 85.19 275 91.67

Adequate Information Yes 19 10.38 09 10.00 03 11.11 31 10.33

No 164 89.62 81 90.00 24 88.89 269 89.67

Professional Management

Yes 46 25.14 22 24.44 06 22.22 74 24.67

No 137 74.86 68 75.56 21 77.78 226 75.33

Low Cost

Yes 65 35.52 41 45.56 15 55.55 121 40.33

No 118 64.48 49 54.44 12 44.45 179 59.67

Transparency Yes 54 29.51 26 28.89 09 33.33 89 29.67

No 129 70.49 64 71.11 18 66.67 211 70.33

Well Regulated Yes 44 24.04 24 26.67 06 22.22 74 24.67

No 139 75.96 64 71.11 21 77.78 224 74.67

Convenient Yes 56 30.60 31 34.44 07 25.93 94 31.33

No 127 69.40 59 65.56 20 74.07 206 68.67

Total 183 100 90 100 27 100 300 100

Table 5.41 : Reasons for Investment Based On Age

Data Analysis


119

Table 5.41 reveals that out of main ten reasons, nine reasons were

similar in all age groups i.e. Old Age Safety, Living Standard, Tax

Exemption, Independence, Low cost, Convenient, Diversification of

risk, Transparency and Flexibility However, one significant trend is

seen that the age group below 40 give importance to market linked

while investing and people above 40 give importance to reliability

while investing in pension scheme.

Data Analysis


120

5.2.4 Factors Influencing the Selection of Pension Schemes

5.2.4.1 Rank Given By the Respondents to Factors Influencing

the Selection of Pension Schemes (Lucknow City)

Influencing Factors/

Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

Payment

Facility 14 03 04 03 06 04 10 09 08 09 10 03 02 04 03 06 02 100

Easy Transfer 09 10 04 03 03 05 05 10 08 10 03 05 05 00 05 06 09 100

Efficient

Services 12 05 04 02 01 08 07 06 12 04 07 02 04 04 04 10 08 100

Prior

Information 10 10 07 01 04 05 03 04 02 10 05 09 06 05 04 04 11 100

Withdrawal 08 03 09 04 03 05 05 05 04 05 03 09 08 06 02 07 14 100

High Returns 19 13 06 07 04 04 06 03 05 06 03 03 04 08 02 06 01 100

Market

Linked 09 05 09 10 06 05 08 04 03 04 03 04 09 01 04 08 08 100

Tax Benefit 16 02 03 03 11 09 04 03 04 02 07 03 06 07 04 04 12 100

Track Record 06 01 04 07 07 05 06 04 00 04 03 07 08 07 05 10 16 100

Add On

Facility 23 09 06 08 08 04 01 10 06 04 06 01 05 03 02 01 03 100

Disclosure of

Adequate

Information

06 02 07 04 01 00 05 05 09 06 02 05 05 09 15 12 07 100

Credit

Rating 07 08 03 01 02 04 07 08 04 03 10 05 04 06 07 11 10 100

Flexibility

Offered 05 00 03 05 10 02 04 03 03 04 07 08 04 11 08 15 08 100

Low Cost of

Services 05 01 01 04 08 04 02 05 10 07 05 04 06 04 07 16 11 100

Degree of

Transparency 06 03 04 04 04 03 01 05 03 04 06 10 05 03 09 16 14 100

Portfolio of Pension

Fund

08 06 11 05 05 05 09 06 01 02 01 02 04 04 04 11 16 100

Reputation

of Pension

Scheme

11 09 06 09 05 07 08 04 04 07 03 01 03 02 03 07 11 100

Table 5.42 : Rank Based On Influencing Factors

Data Analysis


121


the Selection of Pension Schemes (Kanpur City)

Influencing

Factors/

Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

Payment

Facility 04 03 02 05 05 06 07 09 07 10 07 05 07 07 07 06 03 100

Easy

Transfer 08 04 08 05 05 04 07 06 07 12 08 06 02 02 02 05 09 100

Efficient

Services 06 03 04 03 00 03 04 06 11 10 04 08 09 08 06 10 05 100

Prior Information

03 05 04 02 05 02 09 06 11 06 08 10 06 04 02 11 06 100

Withdrawal 08 05 05 03 03 12 01 05 07 03 08 06 05 06 04 09 10 100

High Returns 24 16 05 08 12 05 03 03 03 00 04 01 04 03 02 04 03 100

Market

Linked 09 11 07 07 08 08 05 06 03 04 04 05 05 05 01 07 05 100

Tax Benefit 10 04 11 07 06 07 09 04 02 03 05 03 04 03 04 11 07 100

Track Record 00 10 03 04 02 02 05 07 03 03 02 06 04 07 06 16 20 100

Add On

Facility 16 13 15 10 07 07 01 06 03 04 02 04 00 01 03 05 03 100

Disclosure of

Adequate

Information

00 02 00 01 01 00 02 06 05 06 05 08 04 08 13 20 19 100

Credit Rating 04 07 08 13 08 03 04 03 05 02 07 01 11 05 06 06 07 100

Flexibility

Offered 01 02 02 05 10 03 06 04 04 05 07 04 09 08 04 12 14 100

Low Cost of Services

00 02 00 05 03 06 06 02 04 01 05 07 08 05 09 20 17 100

Degree of

Transparency 00 00 01 02 03 02 09 02 07 06 04 10 01 07 09 20 17 100

Portfolio of

Pension

Fund

02 06 07 03 14 09 08 11 02 04 02 04 03 03 02 12 08 100

Reputation

of Pension Scheme

02 03 13 09 06 11 05 07 09 07 03 01 05 02 03 03 11 100


Data Analysis


122

5.2.4.3 Rank given By the Respondents to Factors Influencing

the Selection of Pension Schemes (Allahabad City)

Influencing

Factors/

Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

Payment Facility 08 02 07 04 10 24 07 09 00 06 07 01 04 01 02 05 03 100

Easy

Transfer 08 05 03 06 01 06 21 05 05 08 05 08 02 03 05 05 04 100

Efficient

Services 02 03 03 03 06 09 06 15 04 06 09 11 05 03 03 09 03 100

Prior

Information 08 10 04 05 02 01 06 11 14 02 07 03 05 05 02 09 06 100

Withdrawal 03 03 06 05 08 00 05 04 07 14 04 09 04 05 05 06 12 100

High Returns 12 26 05 08 08 03 01 06 05 06 02 03 01 04 03 03 04 100

Market

Linked 05 07 06 07 06 06 05 01 05 07 11 04 10 02 04 10 04 100

Tax Benefit 18 05 05 06 05 11 06 02 04 02 08 07 01 09 04 04 03 100

Track Record 03 04 07 05 03 03 03 07 12 02 06 06 09 05 01 10 14 100

Add On

Facility 12 06 11 06 09 07 05 09 04 08 02 06 05 04 00 02 04 100

Disclosure of

Adequate Information

00 03 00 06 04 03 02 03 07 06 04 05 08 08 16 10 15 100

Credit Rating 02 02 03 05 04 01 06 05 05 04 08 03 11 15 05 07 14 100

Flexibility

Offered 00 00 03 08 05 03 04 05 03 05 03 05 07 11 13 16 09 100

Low Cost of

Services 03 01 05 03 05 03 05 05 09 01 05 03 06 06 08 15 17 100

Degree of

Transparency 02 05 02 05 04 03 00 01 07 02 02 09 06 04 05 25 18 100

Portfolio of

Pension

Fund

06 08 15 04 05 04 01 06 03 05 02 01 03 01 06 14 16 100

Reputation

of Pension

Scheme

08 06 06 06 12 05 04 03 02 08 04 01 01 04 01 09 20 100


Data Analysis


123


the Selection of Pension Schemes of Select Cities of Uttar

Pradesh

Influencing Factors

/Rank

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Total

Payment

Facility 26 08 13 12 21 34 24 27 15 25 24 09 13 12 12 17 08 300

Easy Transfer 25 19 15 14 09 15 33 21 20 30 16 19 09 05 12 16 22 300

Efficient

Services 20 11 11 08 07 20 17 27 27 20 20 21 18 15 13 29 16 300

Prior

Information 21 25 15 08 11 08 18 21 27 18 20 22 17 14 08 24 23 300

Withdrawal 19 11 20 12 14 17 11 14 18 22 15 24 17 17 11 22 36 300

High Returns 55 55 16 23 24 12 10 12 13 12 09 07 09 15 07 13 08 300

Market

Linked 23 23 22 24 20 19 18 11 11 15 18 13 24 08 09 25 17 300

Tax Benefit 44 11 19 16 22 27 19 09 10 07 20 13 11 19 12 19 22 300

Track Record 09 15 14 16 12 10 14 18 15 09 11 19 21 19 12 36 50 300

Add On Facility 51 28 32 24 24 18 07 25 13 16 10 11 10 08 05 08 10 300

Disclosure of

Adequate

Information

06 07 07 11 06 03 09 14 21 18 11 18 17 25 44 42 41 300

Credit Rating 13 17 14 19 14 08 17 16 14 09 25 09 26 26 18 24 31 300

Flexibility

Offered 06 02 08 18 25 08 14 12 10 14 17 17 20 30 25 43 31 300

Low Cost of

Services 08 04 06 12 16 13 13 12 23 09 15 14 20 15 24 51 45 300

Degree of

Transparency 08 08 07 11 11 08 10 08 17 12 12 29 12 14 23 61 49 300

Portfolio of

Pension Fund

16 20 33 12 24 18 18 23 06 11 05 07 10 08 12 37 40 300

Reputation

of Pension

Scheme

21 18 25 24 23 23 17 14 15 22 10 03 09 08 07 19 42 300


Data Analysis


124


Selection of Pension Schemes (Lucknow City)

Sr. No. Influencing Factors Total Score Mean Score Rank

1 Payment Facility 5416 54.16 3

2 Easy Transfer 5119 51.19 6

3 Efficient Services 5006 50.06 9

4 Prior Information 5029 50.29 8

5 Withdrawal 4711 47.11 11

6 High Returns 5916 59.16 2


8 Tax Benefit 5106 51.06 7

9 Track Record 4373 43.73 14

10 Add On Facility 6143 61.43 1

11 Disclosure of Adequate Information 4378 43.78 13

12 Credit Rating 4614 46.14 12

13 Flexibility Offered 4298 42.98 15

14 Low Cost of Services 4268 42.68 16

15 Degree of Transparency 4183 41.83 17

16 Portfolio of Pension Fund 4844 48.44 10

17 Reputation of Pension Scheme 5326 53.26 4

Table 5.46 : Ranking Based On Influencing Factors

Figure 5.33 : Ranking Based On Influencing Factors

0

10

20

30

40

50

60

70

Paym

en

t Facilit

y

Easy T

ran

sfe

r

Eff

icie

nt

Serv

ices

Pri

or

Info

rmati

on

Wit

hdra

wal

Hig

h R

etu

rns

Mark

et

Lin

ked

Tax B

en

efit

Tra

ck R

ecord

Add O

n F

acilit

y

Dis

clo

su

re o

f adequ

ate

…

Cre

dit

Rati

ng

Fle

xib

ilit

y o

ffere

d

Low

cost

of

Serv

ices

Degre

e o

f tr

an

spare

ncy

Port

folio o

f Pen

sio

n …

Repu

tati

on

of

Pen

sio

n …

Mean Scores

Rank

Tota

l M

ean S

core

and R

anks

Influencing Factors

Data Analysis


125

5.2.4.6 Garrett’s Ranking Table-Factors Influencing the

Selection of Pension Schemes (Kanpur City)

Sr. No. Influencing Factors Total Scores Mean Scores Rank





5 Withdrawal 4791 47.91 10



8 Tax Benefit 5224 52.24 4

9 Track Record 3983 39.83 14





14 Low cost of Services 3671 36.71 15






0

10

20

30

40

50

60

70

Paym

en

t F

acilit

y

Easy T

ran

sfe

r

Eff

icie

nt

Serv

ices

Pri

or

Info

rmati

on

Wit

hdra

wal

Hig

h R

etu

rns

Mark

et

Lin

ked

Tax B

en

efit

Tra

ck R

ecord

Add O

n F

acilit

y

Dis

clo

su

re o

f …

Cre

dit

Rati

ng

Fle

xib

ilit

y o

ffere

d

Low

cost

of

Serv

ices

Degre

e o

f …

Port

folio o

f Pen

sio

n …

Repu

tati

on

of …

Mean Scores

Rank

Influencing Factors

Tota

l M

ean S

core

and R

anks

Data Analysis


126


Selection of Pension Schemes (Allahabad City)

Sr. No. Influencing Factors Total Scores Mean Scores Rank





5 Withdrawal 4562 45.62 11



8 Tax Benefit 5611 56.11 3

9 Track Record 4472 44.72 12





14 Low cost of Services 4021 40.21 14






0

10

20

30

40

50

60

70

Paym

en

t F

acilit

y

Easy T

ran

sfe

r

Eff

icie

nt

Serv

ices

Pri

or

Info

rmati

on

Wit

hdra

wal

Hig

h R

etu

rns

Mark

et

Lin

ked

Tax B

en

efit

Tra

ck R

ecord

Add O

n F

acilit

y

Dis

clo

su

re o

f …

Cre

dit

Rati

ng

Fle

xib

ilit

y o

ffere

d

Low

cost

of

Serv

ices

Degre

e o

f …

Port

folio o

f Pen

sio

n …

Repu

tati

on

of …

Mean Scores

Rank

Influencing Factors

Tota

l M

ean S

core

and R

anks

Data Analysis


127

Table (5.46), (5.47) and (5.48) reveals that the main ten influencing

factors for selection of Pension schemes in Lucknow, Kanpur and

Allahabad Cities are summarized as follows:


1.

Add On Facility

High Returns High Returns

2.

High Returns

Add On Facility Add On Facility

3.

Payment Facility

Market Linked Tax Benefit

4.

Reputation of Pension

Scheme

Tax Benefit Payment Facility

5.

Market Linked

Reputation of Pension Scheme Easy Transfer

6.

Easy Transfer

Easy Transfer Prior Information

7.

Tax Benefit

Credit Rating Market Linked

8.

Prior Information

Portfolio of Pension Fund Efficient Services

9.

Efficient Services

Payment Facility

Reputation of Pension

Scheme

10.


Fund

Withdrawal


Fund

Table 5.49 : Top Ten Factors for Selection of Pension Schemes in Three Cities

High returns were the common factor influencing the selection of

Pension schemes in all the three select cities of Uttar Pradesh in

their order of priority.

Data Analysis


128


Selection of Pension Schemes of Select Cities of Uttar Pradesh

State

Sr. No. Influencing Factors Total Score Mean Score Rank





5 Withdrawal 14064 46.88 11

6 High Returns 18332 61.11 1


8 Tax Benefit 15941 53.14 3

9 Track Record 12828 42.76 13



12 Credit Rating 13794 45.98 12


14 Low Cost of Services 11960 39.87 15






0

10

20

30

40

50

60

70

Paym

en

t F

acilit

y

Easy T

ran

sfe

r

Eff

icie

nt

Serv

ices

Pri

or

Info

rmati

on

Wit

hdra

wal

Hig

h R

etu

rns

Mark

et

Lin

ked

Tax B

en

efit

Tra

ck R

ecord

Add O

n F

acilit

y

Dis

clo

su

re o

f …

Cre

dit

Rati

ng

Fle

xib

ilit

y o

ffere

d

Low

cost

of …

Degre

e o

f …

Port

folio o

f …

Repu

tati

on

of …

Mean Scores

Rank

Influencing Factors

Tota

l M

ean S

core

and R

anks

Data Analysis


129

According to Table (5.50) the main factors influencing the selection of

Pension schemes of select Cities of Uttar Pradesh State are Payment

Facility, Easy Transfer, Efficient Services, Prior Information,

Withdrawal and High Returns.

5.2.5 Sources of Information:

5.2.5.1 Sources of Information for Investors of Pension Schemes

in Select Cities of Uttar Pradesh

Sr.

No.

Sources of

Information

Lucknow Kanpur Allahabad Total

Yes No Total Yes No Total Yes No Total Yes No

1 Bankers 16 84 100 20 80 100 28 72 100 64

(21.3)

236

(78.7)

2 Brokers 41 59 100 34 66 100 31 69 100 106

(35.3)

194

(64.7)

3 Colleagues 22 78 100 16 84 100 37 63 100 75

(25.0)

225

(75.0)

4 Professional

Advisor 35 65 100 39 61 100 23 77 100

97

(32.3)

203

(67.6)

5 Friends 51 49 100 51 49 100 56 44 100 158

(52.7)

142

(47.3)

6 Electronic Media 39 61 100 26 74 100 54 46 100 119

(39.7)

181

(60.3)

7 Print Media 37 63 100 22 78 100 48 52 100 107

(35.7) 193

(64.3)

8 Internet 25 75 100 19 81 100 32 68 100 76

(25.3)

224

(74.7)

9 Relatives 27 73 100 9 91 100 26 74 100 62

(20.7) 238

(79.3)

10 Brochures/Holdings 14 86 100 13 87 100 10 90 100 37

(12.3)

263

(87.7)

11 Any other 5 95 100 10 90 100 12 88 100 27

(9.0)

273

(91.0)

* Figures in brackets denote %.

Table 5.51 : Sources of Information for Pension Schemes

Data Analysis


130

Figure 5.37 : Sources of Information for Pension Schemes

Table 5.51 shows the sources through which the respondents receive

information of Pension schemes. The sources of information were

almost similar for respondents of Lucknow and Kanpur. The popular

sources of information regarding Pension schemes are friends,

Brokers, Professional Advisors, Electronic Media and Print Media in

Lucknow and Kanpur city while in Allahabad, the first five preferred

sources of information are friends, electronic media, print media,

colleagues, internet and Brokers.

0

50

100

150

200

250

300

350

Allahabad (No)

Allahabad (Yes)

Kanpur (No)

Kanpur (Yes)

Luknow (No)

Luknow (Yes)

No. of Respondents

Sources

Data Analysis


131

5.2.5.2 Sources of information by Occupation of Respondents

Sources of

Information/Occupation

Business Salaried Farmers

& Allied

Activities

Others Total

No. % No. % No. % No. % No. %

Banker Yes 14 16.47 27 22.13 13 24.53 10 25.00 64 21.33

No 71 83.53 95 77.87 40 75.47 30 75.00 236 78.67

Brokers Yes 31 36.47 39 31.97 24 45.28 12 30.00 106 35.3

No 54 63.53 83 68.03 29 54.72 28 70.00 194 64.7

Colleagues Yes 09 10.59 42 34.43 13 24.53 11 27.50 75 25.00

No 76 89.41 80 65.57 40 75.47 29 72.50 225 75.00

Professional

Advisor

Yes 31 36.47 37 30.33 17 32.08 12 30.00 97 32.33

No 54 63.53 85 69.67 36 67.92 28 70.00 203 67.67

Friends Yes 45 52.94 67 54.92 25 44.17 24 60.00 161 53.67

No 40 47.06 55 45.08 28 52.83 16 40.00 139 46.33

Electronic Media Yes 26 30.59 49 40.16 24 45.28 17 42.50 116 38.67

No 59 69.41 73 59.84 29 54.72 23 57.50 184 61.33

Print Media Yes 23 27.06 38 31.15 31 58.49 12 30.00 104 34.67

No 62 72.94 84 68.85 22 41.51 28 70.00 196 65.33

Internet Yes 27 31.76 23 18.52 18 33.96 08 20.00 76 25.33

No 58 68.24 99 81.15 35 66.04 32 80.00 224 74.67

Relatives Yes 15 17.65 22 18.03 12 22.64 13 32.50 62 20.67

No 70 82.35 100 81.97 41 77.36 27 67.50 238 79.33

Brochures Yes 12 14.12 11 09.02 10 18.87 04 10.00 37 12.33

No 73 85.88 111 90.98 43 81.13 36 90.00 263 87.67

Any other Yes 8 09.41 08 06.56 06 11.32 05 12.50 27 9.00

No 77 15.40 114 93.44 47 88.68 35 87.50 273 91.00

Total 85 100 122 100 53 100 40 100 300 100.00

Table 5.52 : Sources of Information Based On Occupation

Table 5.52 reveals that respondents found information about Pension

schemes from friends, electronic media, print media and brokers in

all occupational categories where as among the salaried class and

Farmers, they approached their colleagues for information about

Pension Schemes. Internet as a source of information is popular

among Business class and Salaried People. Also professional

advisors were also consulted by the Business class, salaried class. In

case of Farmers, they approached the print media for information

about pension schemes before investing in pension schemes.

Data Analysis


132

5.2.5.3 Sources of Information by Educational Qualifications of Respondents

Sources of Information /

Qualification

S.S.C H.S.C Under

Graduate

Graduate Post

Graduate

Any Other Total

No. % No. % No. % No. % No. % No. % No. %

Banker Yes 05 20.83 02 06.25 03 15.79 33 25.38 19 25.33 02 10 64 21.33

No 19 79.17 30 93.75 16 84.21 97 74.62 56 74.67 18 90 236 78.67

Brokers Yes 08 33.33 08 25.00 07 36.84 46 35.38 31 41.33 06 30 106 35.33

No 16 66.67 24 75.00 12 63.16 84 64.62 44 58.67 14 70 194 64.67

Colleagues Yes 05 20.83 05 15.63 01 05.26 32 24.62 27 36.00 05 25 75 25.00

No 19 79.17 27 84.37 18 94.74 98 75.38 48 64.00 15 75 225 75.00

Professional Advisor

Yes 05 20.83 06 18.75 08 42.11 54 41.54 19 25.33 05 25 97 32.33

No 19 79.17 26 81.25 11 57.89 76 58.46 56 74.67 15 75 203 67.67

Friends Yes 12 50.00 24 75.00 08 42.11 67 51.54 40 53.33 10 50 161 53.67

No 12 50.00 08 25.00 11 57.89 63 48.46 35 46.67 10 50 139 46.33

Electronic Media

Yes 07 29.17 10 31.25 08 42.11 56 43.08 29 38.67 09 45 119 39.67

No 17 70.83 22 68.75 11 57.89 74 56.92 46 61.33 11 55 181 60.33

Print Media Yes 06 25.00 08 25.00 03 15.79 50 38.46 30 40.00 10 50 107 35.67

No 18 75.00 24 75.00 16 84.21 80 61.54 45 60.00 10 50 193 64.33

Internet Yes 02 08.33 09 28.13 04 21.05 28 21.54 25 33.33 08 40 76 25.33

No 22 91.67 23 71.87 15 78.95 102 78.46 50 66.67 12 60 224 74.67

Relatives Yes 09 37.50 09 28.13 00 00.00 24 18.46 13 17.33 07 35 62 20.67

No 15 62.50 23 71.87 19 100.0 106 81.54 62 82.67 13 65 238 79.33

Brochures Yes 03 12.50 03 09.38 01 05.26 15 11.54 12 16.00 03 15 37 12.33

No 21 87.50 29 90.62 18 94.74 115 88.46 63 84.00 17 85 263 87.67

Any other Yes 04 16.67 02 06.25 04 21.05 09 06.92 07 09.33 01 05 27 09.00

No 20 83.33 30 93.75 15 78.95 121 93.08 68 90.67 19 95 273 91.00

Total 24 100 32 100 19 100 130 100 75 100 20 100 300 100

Table 5.53 : Sources of Information Based On Educational Qualifications

Data Analysis


133

Table 5.53 reveals that non-graduates seek information about

investment mainly from friends; electronic media, brokers; print

media and relatives where as graduates and the non-graduates seek

information from professionals and internet in addition to friends,

electronic media, brokers and print media.

5.2.6 Preference of Pension Schemes

5.2.6.1 Preference of Pension Schemes based on Structure

Based on Structure Lucknow Kanpur Allahabad Total

No. %

Pure Pension 75 70 83 228 76

Pension with

Insurance 25 30 17 72 24

Total 100 100 100 300 100

Table 5.54 : Preference of Pension Schemes Based on Structure

Figure 5.38 : Preference of Pension Schemes based on Structure

0

10

20

30

40

50

60

70

80

90


Pure Pension

Pension with insurance

Cities

No. of Respondents

Data Analysis


134

Table 5.54 shows the preference of Pension schemes based on

structure by the respondents of Lucknow, Kanpur and Allahabad.

Most of respondents (76%) prefer to invest their money in pure

pension scheme. Majority of the respondents preferred pure pension

schemes as they have different purpose of pension and insurance.

5.2.6.2 Preference of Pension Schemes Based on Objectives

Sr.

No.

Based on

objective

Lucknow Kanpur Allahabad Total

Yes No Total Yes No Total Yes No Total Yes No.

1 High Income 52 48 100 29 71 100 40 60 100 121

(40.3) 179

(59.7)

2 High

Lumsum 70 30 100 76 24 100 66 34 100

212

(70.7)

88

(29.3)

3 Balanced Investment

19 81 100 20 80 100 23 77 100 62

(20.7) 238

(79.3)

4 Tax Benefit 50 50 100 40 60 100 38 62 100 128

(42.7)

172

(57.3)

5

Health

Insurance

Add-on

2 98 100 2 98 100 3 97 100 7

(2.3)

293

(97.7)

6 Low Risk 7 93 100 4 96 100 2 98 100 13

(4.3)

287

(95.7)

7 Dependent Pension

Option

3 97 100 3 97 100 3 97 100 9

(3.0)

291

(97.0)

* Figures in brackets denote %.

Table 5.55 : Preference of Pension Schemes Based on Objectives

Figure 5.39 : Preference of Pension Schemes based on Objectives

050

100150200250300350

Allahabad (No)

Allahabad (Yes)

Kanpur (No)

Kanpur (Yes)

Luknow (No)

Luknow (Yes)

No. of Respondents

Based on Objectives

Data Analysis


135

Table 5.55 shows preference of Pension Schemes based on objective

by the respondents of Lucknow, Kanpur and Allahabad. Most of

respondents of select cities of Uttar Pradesh prefer to invest in high

lumsum amount return at retirement followed by high Income

schemes at retirement and then Tax benefit Schemes. As high

lumsum return pension schemes are suit to those investors, who

want to make long term investment and looking for return after a

long period of time. So, the respondents of the select cities of Uttar

Pradesh look for long term return.

5.2.6.3 Preference of Pension Schemes by Occupation

Schemes/ Occupation

Business Salaried Farmers & Allied

Activities

Others Total

No. % No. % No. % No. % No. %

High Income Yes 32 37.65 45 36.89 22 41.51 22 55.00 121 40.33

No 53 62.35 77 63.11 31 58.49 18 45.00 179 59.67

High Lumsum Yes 56 65.88 91 74.59 38 71.70 27 67.50 212 70.67

No 29 34.12 31 25.41 15 28.30 13 32.50 88 29.33

Balanced

Investment

Yes 13 15.29 28 22.95 12 22.64 09 22.50 62 20.67

No 72 84.71 94 77.05 41 77.36 31 77.50 238 79.33

Tax Benefit Yes 35 41.18 59 48.36 24 45.28 10 25.00 128 42.67

No 50 58.82 63 51.64 29 54.72 30 75.00 172 57.33

Health

Insurance Add-

on

Yes 01 01.18 04 03.28 01 01.89 01 02.50 07 02.33

No 84 98.82 118 96.72 52 98.11 39 97.50 293 97.67

Low Risk Yes 05 05.88 05 04.10 01 01.89 02 05.00 13 04.33

No 80 94.12 117 95.90 52 98.11 38 95.00 287 95.67

Dependent

Pension Option

Yes 06 07.06 01 00.80 00 00.00 02 05.00 09 03.00

No 79 92.94 121 99.20 53 100.00 38 95.00 291 97.00

Total 85 100 122 100 53 100 40 100 300 100

Table 5.56 : Preference of Pension Schemes based on Occupation

Table 5.56 shows preference of Pension schemes by the occupation of

respondents of select cities of Uttar Pradesh. Business class, salaried

and farmers prefer to invest their money in high lumsum return

scheme followed by Tax benefit scheme while others prefer to invest

Data Analysis


136

their savings in high lumsum return scheme followed by high income

scheme.

5.2.6.4 Preference for Payment of Investment Amount Options

Regular Payment Total Percentage

Yes 270 90%

No 030 10%

Table 5.57 : Preference for Payment Options

The respondents were asked whether they prefer to pay regularly for

pension scheme. Table 5.56 reveals that 90% respondents preferred

to pay regularly. Only 10% respondents do not prefer to invest

regularly in pension Plan. This shows the growing popularity of

regular pension Investment scheme as it helps compulsory savings

for retirement.

5.2.6.5 Preference for Payment Options of Investment Amount

in Three Cities

Regular Payment Lucknow Kanpur Allahabad Total

Yes 95

(95)

90

(90)

85

(85)

270

(90)

No 5

(5)

10

(10)

15

(15)

30

(10)

Figure in brackets denote %.

Table 5.58 : Preference for Payment Options in Select Cities

According to Table 5.58 out of 300 respondents, 90% respondents

invest their savings in regular manner in pension scheme and 10%

respondents do not invest their saving regularly in pension scheme.

This shows that regular payment is popular among pension scheme

respondents.

Data Analysis


137

5.2.7 Amount Invested Regularly in Pension Scheme

5.2.7.1 Amount Invested Regularly in Pension Schemes by

Select Cities of Uttar Pradesh State

Amount Lucknow Kanpur Allahabad Total

Rs.1000 to Rs.3000 50

(52.63)

48

(53.33)

45

(52.94)

143

(52.96)

Rs.3000 to Rs.5000 30

(31.58)

30

(33.33)

32

(37.65)

92

(34.07)

Rs.5000 to Rs.8000 10

(10.53)

9

(10.00)

7

(8.24)

26

(9.63)

More than Rs.8000 5

(5.26)

3

(3.34)

1

(1.17)

9

(3.34)

Total 95 90 85 270

* Figure in brackets denote %.

Table 5.59 : Amount Invested Regularly In Select Cities

The table 5.59 reveals that the respondents of Allahabad (90.5%)

were ready to invest up to Rs. 5000 regularly in pension scheme

followed by Kanpur (86.6%) and lastly Lucknow (84.2%). Regular

investment in pension scheme is a popular tool of investment in all

the three select cities of Uttar Pradesh.

5.2.7.2 Occupation by Regular Investment in Pension Scheme

Occupation Business

class

Salaried

class

Farmer & Allied

Activities

Others Total

Yes 82

(96.47)

121

(99.18)

33

(62.26)

34

(85)

270

(90)

No 3

(3.53)

1

(0.82)

20

(37.74)

6

(15)

30

(10)

TOTAL 85 122 53 40 300

* Figure in brackets denote %.

Table 5.60 : Regular Investment Based On Occupation

Chi-square Test to Check the Association

Null Hypothesis (H0) : Null Hypothesis stated that there exists no

association between regular investments in pension scheme and

occupation of the respondents.

Data Analysis


138

Hypothesis (H1) : There is association between regular

investment in pension scheme and occupation of the respondents.

Calculated 2 value : 61.792

Significant level : at 5% Level of Significance

Table value of 2 0.05,3 : 7.815

Table value of 2 is less than calculated value of 2. So, we are

rejecting Null Hypothesis. We can observe that regular investment is

significantly associated with occupation of the respondents as the

calculated 2 value is greater than the table value. Table (5.60)

reveals that regular investment is very popular among salaried

person (99.18%), business class (96.47%) and followed by others

(85%).

5.2.7.3 Regular Investment by Educational Qualifications

Education S.S.C H.S.C Under

Graduate

Graduate Post

Graduate

Any

Other

Total

Yes 20

(83.33)

26

(81.25)

14

(73.68)

126

(96.92)

67

(89.33)

17

(85)

270

(70)

No 04

(16.67)

6

(18.75)

05

(26.32)

04

(3.08)

08

(10.67)

3

(15)

30

(10)

Total 24 32 19 130 75 20 300

* Figure in bracket denotes %

Table 5.61 : Regular Investment Based On Educational Qualifications


Null Hypothesis (H0) : Null Hypothesis stated that there

exists no association between regular investments in pension scheme

and education of the respondents.

Alternative Hypothesis (H1) : There is association between regular

investment in pension scheme and education of the respondents.

Data Analysis


139



Table value of 2 0.0.5,5 : 11.070



significantly associated with education of the respondents. Table

(5.61) reveals that the regular investment in pension scheme is very

popular among graduates and post graduates.

5.2.7.4 Total Monthly Income of Respondents and Regular

Investment in Pension Scheme

Total

Monthly

Income

Up

to

Rs.15000

Rs.15000

to

Rs.25000

Rs.25000

to

35000

Rs.35000

to

45000

Above

Rs.45000

Total

Yes 53

(84.13)

66

(89.19)

45

(86.54)

45

(95.74)

61

(95.31)

270

(90)

No 10

(15.87)

8

(10.81)

7

(13.46)

2

(4.26)

3

(4.69)

30

(10)

Total 63 74 52 47 64 300


Table 5.62 : Regular Investment Based On Monthly Income




and income of the respondents.


investment in pension scheme and income of the respondents.



Data Analysis


140

Table value of 2 0.05,4 : 9.488

Table value of 2 is greater than calculated value of 2. So, we are

accepting the Null Hypothesis. We can observe that regular

investment is not associated with income of the respondents.

5.2.7.5 Total Monthly Expenditure of Respondents and Regular


Total

Monthly Expenditure

Up to

Rs.10000

Rs.10000

to Rs.20000

Rs.20000

to Rs.30000

Rs.30000

to Rs.40000

Above

Rs.40000

Total

Yes 119

(91.54)

82

(92.13)

58

(93.55)

7

(58.33)

4

(57.14)

270

(90)

No 11

(8.46)

7

(7.87)

4

(6.45)

5

(41.67)

3

(42.86)

30

(10)

Total 130 89 62 12 07 300


Table 5.63 : Regular Investment Based On Total Monthly Expenditure




and expenditure of the respondents.


investment in pension scheme and expenditure of the respondents.



Table value of 2 0.05,4 : 9.488



Data Analysis


141

significantly associated with expenditure of the respondents as the

table value is less than the calculated 2 value.

5.2.7.6 Total Monthly Savings of Respondents and Regular


Total

Monthly Savings

Up to

Rs.5000

Rs.5000 to

Rs.15000

Rs.15000

to Rs.25000

Rs.25000

to Rs.35000

Above

Rs.35000

Total

Yes 105 (89.74)

104 (92.86)

42 (87.5)

9 (75)

10 (90.91)

270 (90)

No 12

(10.26)

8

(7.14)

6

(12.5)

3

(25)

1

(9.09)

30

(10)

Total 117 112 48 12 11 300


Table 5.64 : Regular Investment Based On Monthly Savings




and savings of the respondents.


investment in pension scheme and savings of the respondents.



Table value of 2 0.05,4 : 9.488

Table value of 2 is greater than calculated value of 2. So, we are

accepting the Null Hypothesis. We can observe that regular

investment is not associated with savings of the respondents as the

table value is more than the calculated 2 value.

Data Analysis


142

5.2.7.7 Marital Status of Respondents and Regular Investment in

Pension Scheme

Marital Status Married Unmarried Total

Yes 213

(94.67)

57

(76)

270

(90)

No 12

(5.33)

18

(24)

30

(10)

Total 225 75 300


Table 5.65 : Regular Investment Based On Marital Status




and marital status of the respondents.


investment in pension scheme and marital status of the respondents.



Table value of 2 0.05,1 : 3.841



significantly associated with marital status of the respondents as the

table value is less than the calculated 2 value.

Data Analysis


143

5.2.7.8 Age of Respondents and Regular Investment in Pension

Scheme

Age 20-40 40-60 Above 60 Total

Yes 176 (96.17)

87 (96.67)

7 (25.93)

270 (90)

No 7 (3.83)

3 (3.33)

20 (74.07)

30 (10)

Total 183 90 27 300


Table 5.66 : Regular Investment Based On Age




and age of the respondents.


investment in pension scheme and age of the respondents.



Table value of 2 0.05,2 : 5.991



significantly associated with age of the respondents as the table

value is less than the calculated 2 value.

5.2.7.9 Gender of Respondents and Regular Investment in

Pension Scheme

Gender Male Female Total

Yes 224

(96.14)

46

(68.66)

270

(90)

No 9 (3.86)

21 (31.34)

30 (10)

Total 233 67 300


Table 5.67 : Regular Investment Based On Gender

Data Analysis


144




and gender of the respondents.


investment in pension scheme and gender of the respondents.



Table value of 2 0.05,1 : 3.841



significantly associated with gender of the respondents as the table

value is less than the calculated 2 value.

5.2.8 Level of Fulfillment of Objective in Pension Scheme

5.2.8.1 Level of Fulfillment of Investors Objective in Select


Sr.

No.

Level Lucknow Kanpur Allahabad Total

Yes No Yes No Yes No Yes No

1 Very High 10 90 26 74 8 92 44

(14.7)

256

(85.3)

2 High 30 70 38 62 44 56 112

(37.3)

188

(62.7)

3 Medium 43 57 26 74 41 59 110

(36.7)

190

(63.3)

4 Low 13 87 8 92 6 94 27

(9)

273

(91)

5 Very Low 1 99 1 99 0 100 2

(0.7)

298

(99.3)

6 Disappointed 3 97 0 100 1 99 4

(1.3)

296

(98.7)

7 No-opinion 0 100 1 99 0 100 1

(0.3)

299

(99.7)


Table 5.68 : Level of Fulfillment of Objective in Pension Scheme

Data Analysis


145

In the select cities of Uttar Pradesh the respondents were fairly

satisfied with their investment. Their objective of investing in Pension

scheme is fulfilled but in Lucknow city the level of fulfillment of level

of objective was not very high. In Lucknow city, the level of fulfillment

of the investment objective was not very high. (90%) i.e. they are not

very satisfied with their objectives of investment in Pension scheme.

While in case of the respondents of Kanpur and Allahabad the level

of fulfillment was high. This shows that the Pension Scheme

investors of Kanpur and Allahabad were highly satisfied with their

investment in Pension Scheme.

Figure 5.40 : Level of Fulfillment of Objective in Pension Scheme

Value

Very High

High

Medium

Low

Very Low

Disappointed

No Opinion

Data Analysis


146

5.2.8.2 Average Level of Satisfaction of Respondent in Select


City/

Level of Fulfillment


f x fx f x fx f x fx

Very High 10 7 70 26 7 182 8 7 56

High 30 6 180 38 6 228 44 6 264

Medium 43 5 215 26 5 130 41 5 205

Low 13 4 52 8 4 32 6 4 24

Very Low 1 3 3 1 3 3 0 3 0

Disappointed 3 2 6 0 2 0 1 2 2

No Opinion 0 1 0 1 1 1 0 1 0

100 526 100 576 100 551

Table 5.69 : Satisfaction Level for Pension Schemes

Where , f = Number of Respondents x = Likert’s Scale

Calculation of Average Level of Satisfaction of Respondents

Lucknow City: Mean = ∑ Fx = 526 = 5.26

∑f 100

Data Analysis


147

Kanpur City: Mean = ∑ Fx = 576 = 5.76

∑f 100

Allahabad City: Mean =∑Fx = 551 = 5.51

∑f 100

All Three Cities: µ = ∑ Xi = 1653 = 5.51

∑n 300

It can be seen that the level of fulfillment for the respondents of

Kanpur and Allahabad was quite high i.e. they were highly satisfied

with the fulfillment of investment objectives. While in case of the

respondents of Lucknow City the level was satisfactory. There were

about 13 respondents whose level of fulfillment was low. The

objective for which they had invested in Pension scheme had not

been fulfilled satisfactorily. These grievances have to be addressed by

the Pension Scheme Companies.

Also if we find the average level of fulfillment of the three select cities

of Uttar Pradesh, the level of fulfillment is about 5.26 in case of

Lucknow City while in case of Kanpur and Allahabad it is 5.76 and

5.51 respectively. This indicates that the level of fulfillment in

Lucknow is less than compared to the Kanpur and Allahabad from

the select cities of Uttar Pradesh.

5.2.9 Factors Discouraging Investment in Pension Schemes

Data Analysis


148

5.2.9.1 Factors Discouraging Investment in Pension Schemes

Sr.

No.

Factors Lucknow Kanpur Allahabad Total

Yes No Total Yes No Total Yes No Total Yes No

1. Lack of Transparency 24 76 100 48 52 100 42 58 100 114

(38.0)

186

(62.0)

2. Poor Timing of Investment in Pension

Schemes

59 41 100 41 59 100 43 57 100 143

(47.7)

157

(52.3)

3. Conflict of Personal Investment in Pension Schemes

14 86 100 7 93 100 23 77 100 44 (14.7)

256 (85.3)

4. Careless Management of Pension Fund 21 79 100 19 81 100 20 80 100 60

.(20.0)

240

(80.0)

5. Portfolio Manipulation 42 58 100 37 63 100 56 44 100 135

(45.0)

165

(55.0)

6. Fear of Frauds 61 39 100 64 36 100 60 40 100 185

(61.7)

115

(38.3)

7. Lack of Professional Management of Pension

Fund

24 76 100 28 72 100 32 68 100 84

(28.0)

216

(72.0)

8. Discourteous Service 21 79 100 13 87 100 8 92 100 42

(14.0)

258

(86.0)

9. Poor Regulatory Mechanism 18 82 100 7 93 100 18 82 100 43 (14.3)

257 (85.7)

10. Non-Compliance of the Objective of the

Schemes

21 79 100 8 92 100 8 92 100 37

(12.3)

263

(87.7)

11. Lack of Innovative Product 14 86 100 17 83 100 20 80 100 51

(17.0)

249

(83.0)

12. Lack of Information 42 58 100 47 53 100 28 72 100 117

(39.0)

183

(61.0)

13. Poor After Sales Service 22 78 100 15 85 100 27 73 100 64

(21.3)

236

(78.7)

14. Poor Grievance Handling Mechanism 15 85 100 6 94 100 15 85 100 36 (12.0)

264 (88.0)

Table 5.70 : Factors Discouraging Investment in Pension Schemes

Data Analysis


149

5.2.9.2 Main Eight Factors Discouraging Investment in Pension

Schemes of Select Cities of Uttar Pradesh

Nos. Lucknow City Kanpur City Allahabad City

1. Fear of Frauds Fear of Frauds Fear of Frauds

2. Poor Timing of

Investment in

Pension Schemes

Lack of

Transparency

Portfolio

Manipulation

3. Portfolio

Manipulation

Lack of

Information

Poor Timing of

Investment in Pension Schemes

4. Lack of

Information

Poor Timing of

Investment in

Pension Schemes

Lack of

Transparency

5. Lack of

Transparency

Portfolio

Manipulation

Lack of

Professional

Management of

Pension Fund

6. Lack of Professional

Management of

Pension Fund

Lack of Professional

Management of

Pension Fund

Lack of Information

7. Poor After Sales

Service

Careless

Management of

Pension Fund

Poor After Sales

Service

8. Careless Management of

Pension Fund

Lack of Innovative Product

Conflict of Personal

Investment in

Pension Schemes

Table 5.71 : Factors Discouraging Investment

Table 5.71 depicts the main eight factors which discourage

investment in Pension Scheme in Lucknow, Kanpur and Allahabad

City. The prominent and common factors in all the three selected

cities of Uttar Pradesh are Fear of Frauds, Poor timing of investment

in pension scheme, Portfolio manipulation, Lack of information and

Lack of transparency. Pension business companies have to take note

of these factors and improve on these aspects to make Pension

scheme investment popular.

Data Analysis


150

5.2.10 Problems Faced by Respondents after Investing in Pension Scheme

5.2.10.1 Problems Faced by Respondents after Investing in Pension Scheme of Select Cities of Uttar Pradesh

Problems Often Rarely Never Total

Lucknow Kanpur Allahabad Lucknow Kanpur Allahabad Lucknow Kanpur Allahabad Often Rarely Never

Policy issue in time

21 5 11 41 40 25 38 55 64 37 (12.3)

106 (35.4)

157 (52.3)

High Late

Payment

Charge 14 3 6 50 32 25 36 65 69

23

(7.7)

107

(35.7)

170

(56.7)

Annual

Report 8 7 10 41 42 44 51 51 46

25

(8.3)

127

(42.4)

148

(49.3)

Regular Information

0 6 9 52 25 29 40 75 62

17 (5.7)

106 (35.3)

177 (59)

Figures in bracket denotes %

Table 5.72 : Problems Faced by Respondents after Investing

Data Analysis


151

There are many problems faced by the respondents while investing in

Pension Scheme. The above Table 5.72 reveals that 12.3% of the

respondents do not receive the policy in time. 7.7 % of the

respondent faces the high late payment charge. 8.3% of the

respondents do not receive the annual report in time. 5.7% of the

respondents have difficulty in getting regular information. This shows

that the services provided by pension scheme companies were not

very satisfactory. The pension scheme companies need to address

these grievances of Pension scheme investors if they want to attract

Pension scheme investors.

Conclusion and Suggestions


152

Chapter 6

CONCLUSION AND SUGGESTIONS

6.0 Conclusion

A structured questionnaire was given to 380 respondents (300

selected for study) of Lucknow, Kanpur, and Allahabad cities to know

their perceptions regarding pension scheme Investment. The

following broad conclusions were drawn: People save for different

purposes i.e. children education, children marriage, house

construction, retirement and tax planning. It was found that main

purpose of savings by the respondents was for children education

(56.33%) followed by Retirement (48.33%). Tax planning was given

the third priority by the respondents. People engaged in business

gave the first preference to children education (68.2%) followed by

others (57.5%) and then people engaged in farming and allied

activities (54.7%). People engaged in farming and allied activities gave

the first preference to children education (54.7%), followed by

salaried class (53.3%). Salaried class gave the second preference to

retirement (49.2%) followed by others (47.5%) and businessman

(34.1%). Others gave the second preference to retirement planning

(57.5%) followed by businessman (34.1%) and people engaged in

farming and allied activities (33.9%). The relationship between

educational qualifications and purpose of savings revealed that the



153

respondents gave priority to children’s education (56.3%), retirement

(48.3%) followed by tax planning (40%).

In case of the relationship between monthly income and purpose of

savings, a unique trend has emerged. As the income increases,

priority is given to tax planning. Majority of the respondents gave the

first preference to children education followed by retirement.

If we look at the relationship between age and purpose of savings, it

can be seen that those belonging to the age group below 40 gave the

first priority to children’s education while both the age group 40 to 60

and above 60 gave priority to retirement planning for investment.

Savings A/c, pension schemes and insurance are the popular tools of

investment by the respondents of Lucknow, Kanpur and Allahabad

cities of Uttar Pradesh state. Out of total respondents 71%

respondents gave preference to invest in pension scheme, 69%

respondents gave preference to invest in saving A/c, and 65.3%

respondents gave the preference to insurance. In Lucknow city, the

most popular sources of investment for the respondents are saving

A/c, insurance, pension scheme, bank/recurring deposit and P.P.F.

A/c. In Kanpur, the most popular sources of investment for the

respondents are saving A/c, pension scheme, insurance,

bank/recurring deposit and share market. In Allahabad, the most

popular sources of investment for the respondent are insurance,

saving A/c, gold and silver, pension scheme and P.P.F. A/c.



154

Respondents do not prefer to invest in real estate, post office scheme,

government securities, company deposits, debentures and bonds etc.

The factors influencing the selection of pension scheme in Lucknow

are add on facility, high returns, payment facility, reputation of

pension scheme, and market linked scheme in their order of priority.

The influencing factors for selection of pension scheme in Kanpur are

high returns, add on facility, market linked, tax benefit, and

reputation of pension scheme in their order of priority.

The influencing factors for selection of pension scheme in Allahabad

are high returns; add on facility, tax benefit, payment facility, and

easy transfer in their order of priority.

The popular sources through which respondents get information

about pension scheme are friends, electronic media, print media,

brokers and professional advisors in Lucknow and Kanpur city. In

Allahabad the first five preferred sources of information are friends,

electronic media, print media, colleagues, internet and brokers.

People of Lucknow and Kanpur get the information regarding pension

scheme from professionals advisors also while people of Allahabad

get the information from colleagues and internet.

Preference for pension schemes based on structure given by

respondents of Lucknow, Kanpur and Allahabad shows that most of

respondents (76%) prefer to invest their money in pure pension

scheme. Preference for pension schemes based on objective by

respondents of Lucknow, Kanpur and Allahabad reveals that most of



155

respondent of select cities of Uttar Pradesh prefer to invest in high

lumsum return schemes followed by tax benefit schemes and then

high income schemes.

Preference for pension schemes by the occupation of respondents of

select cities of Uttar Pradesh reveals that business class, salaried and

people engaged in farming and allied activities prefer to invest their

money in high lumsum return scheme (70.67%) and followed by tax

benefit scheme (67%) while others prefer to invest their savings in

high lumsum return pension scheme followed by high income

scheme.

Out of 300 respondents, 90% respondents are interested in regular

investment in pension scheme. Out of these 90%, 63.7% respondents

already have invested in pension scheme regularly while 36.3%

respondents are eager to invest in pension scheme. Regular

investment is popular trend among pension scheme respondents.

It is seen through 2 test that there is no association between regular

investment in pension scheme and income of the respondents and

between regular investment in pension scheme and savings of

respondents. But, there exist an association between regular

investment in pension scheme and education i.e. educated people

prefer to invest regularly in pension scheme. There also exist

relationship between regular investment in pension scheme and age,

gender, marital status, occupation and monthly expenditure.



156

According to Garret’s rank technique the main five reasons for

investment in pension scheme are high living standard at retirement,

old age safety, tax benefit, independence and diversification of risk in

select cities of Uttar Pradesh.

Fear of frauds, poor timing of investment in pension scheme, portfolio

manipulation, lack of information and lack of transparency are the

main common factors discouraging investment in pension scheme in

select cities in Uttar Pradesh. In Lucknow city, poor after sales

service and lack of professional management of pension fund are the

additional factors that discourage investment in pension scheme,

while in Kanpur, lack of professional management of pension funds

and careless management of pension funds also discourage

investment in pension schemes. In Allahabad, lack of information

about pension schemes and poor after sales services discourage

investment in pension scheme.

It was also found that 12.3% of the respondents do not receive the

pension policy in time. 7.7 % of the respondents face the problem of

high late payment charge. 8.3% of the respondents do not receive the

annual report in time. 5.7% of the respondents have difficulty in

getting regular Information. This shows that the services provided by

pension companies were not satisfactory.

6.1 Suggestions

Suggestions can be divided into two parts:

(a) For Pension Schemes Provider Companies



157

(b) Pension Scheme Investors

6.1.1 Following Suggestions Can Be Incorporated By the Pension

Schemes Provider Companies

Proper awareness programs should be conducted by Pension Fund

Regulatory Development Authority about the convenience of

investment in different types of pension schemes including

facilitation of information to general public regarding various new

schemes. Short term courses for investor’s education should also be

frequently conducted. Even college students should be made aware of

investment in pension schemes. Pension schemes provider

companies should conduct courses at University and colleges and

these courses should be a part of the curriculum. Investor education

is very important factor for investors. Research and awareness

programmers’ should be conducted for investors. Seminars,

conferences and training programs should be arranged for this

purpose. Publicity can also be done through sources like news

papers, pamphlets, electronic media, radio, print media, magazines

and brochures etc.

Pension schemes providers must clear the company’s financial

position to their investors by timely sending their annual report to

them. This wills reflect the current status of their investment which

will bring confidence in the investors.

76% of respondents were ready to invest in pure pension scheme.

This shows the popularity of pure pension Scheme. The pension



158

scheme companies should publicize pure pension scheme and

encourage investors to invest more in pure pension scheme as it will

help in old age compulsory savings.

It has been observed that the policies are not dispatched in time by

pension scheme provider companies. The pension scheme provider

companies have to focus on good services to the investors. The policy

could be expeditiously dispatched in time to the investors.

Fear of frauds was one of the factor discouraging pension Scheme

investors. Government must ensure that pension providers are

following regulations of corporate governance. Regulation should be

strictly enforced by PFRDA in relation to corporate governance. So,

that it brings transparency to the investors. PFRDA should enforce,

strict regulations, so that other pension provider companies will be

deterred from committing frauds in future.

The main factor discouraging investment in pension schemes is

result of lack of professional management of funds. To avoid such

problems appropriate professional with regard to skill and record

should be appointed to manage pension schemes. This will increase

investor’s confidence, which will motivate the investors to save in

pension schemes.

Appropriate measures should be taken by the government, PFRDA

and SEBI to weed out the discouraging factors and help to provide a

conducive climate for growth of pension industry in the country.

AMCs have to ensure more professional outlook for better results.



159

New and innovative schemes considering the various needs of the

investors must be provided by Pension companies because there is a

lack of such innovative schemes in the market. Investors being well

informed about the various market linked schemes, the pension

providers much cater the need of inventors by launching various

innovative products. Education also plays a key role in pension

investment. Highly qualified persons use the internet for getting the

information. Their behavior of getting information is different from

other respondents. Pension provider companies should update their

websites regularly.

Female respondents prefer to get information about pension scheme

through professionals. Therefore the pension provider companies

should try to tap this particular segment in the market.

Besides relying on brokers, friends, electronic media, print media,

professional advisors, pension scheme investors should be

encouraged to use other sources of information such as internet and

search engines. Pension provider companies should take this aspect

into consideration.

It should be mandatory for pension provider companies to establish

investor grievance cell. A separate ombudsman scheme should be

initiated for redressing the grievances of pension scheme investors

effectively. Each pension provider companies should be required to

establish its own investor’s grievance cell. This will help to sort out

investor’s grievance problems.



160

Investors also were highly dissatisfied with the pension provider

companies not providing current information about pension schemes.

Updates and current information about schemes should be regularly

dispatched to the investors at regular intervals.

During the period of study, it was found that the majority of the

investors invest their money through the high income scheme, high

lumsum benefit schemes and regular investment scheme. This

indicates that more efforts have to be made by the pension providers

to create awareness among the investors regarding the earnings

potential of other schemes.

In the developed countries like U.S. the percentage of net assets held

by the household investors is more than 80% of the total fund, but in

India it is just around 40%. This indicates that the pension provider

companies in India should try to motivate more number of household

investors to invest in pension scheme. The pension provider should

focus majorly on the prospective investors, so that they make cover a

large portion and also fixed their customers by bringing them

confidence through their professional working and their customer

oriented services. Easy working procedures should be followed

because of which the customers feels relax and motivated to get

involved in other such schemes. Such schemes should meet the

varied need of the investors such as fast information processing,

building transparency in operation, professional working and better

customer services.



161

6.1.2 Suggestions for Pension Scheme Investors

Assessing the investors need, which will focuses on the factors like

level of income and expenses, financial independence, age and life

style etc. To attract the customers the companies must clearly

defined the investment objectives and need which could be any

financial plan expense such as wedding, education, buying home,

being financially stable through regular income or any indispensable

future risk. It facilitates regular cash flow requirements and the

quantum of risk.

Investors must thoroughly go through the features of the investment

schemes and firstly get satisfied by analyzing it and choose the one

which fits the investors best and full fills the objective of investment.

The major point to focuses is the previous records of the performance

of the various investment schemes in the last few years and others

similar related schemes. Other points to consider may be timely

communication, accuracy and the degree of transparency, portfolio

allocation the investment ratio and the other major factor to consider

is high rate of return, quality of service, management of fund and

reputation of fund managers in selection of pension providers. The

best approaches for an investor are to invest a fixed some of amount

each month and at regular intervals. They can pan the retirement in

best way by such plans. It is better to involve in early investment and

choose a regular investment scheme.



162

Investment must be done by a positive outlook that the money will

multiply and the rate of return will increase including the income.

A pension scheme investor should be aware of his rights. The agents

or financial advisors should make investors aware of their rights as

per the PFRDA guidelines.

PFRDA regulated pension scheme holder is entitled to:

(a) In the term of six week from the date of purchase, the policy

holder should receive certificates of statement of account

confirming the title.

(b) Proper information must be served about the investment objective,

investment policies, the current financial position and basic

affairs of the selected scheme.

(c) Voting right in compliance to the regulation giving them authority

to approve or disapprove any changes in the fundamental policies

of investment of the scheme which could affect the inferred

interest of the policy holder by its slightest modification.

(d) Authority to incept the basic document of the companies which

are mentioned in the offered scheme document.

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