Much as the government and regulators like to protect investors, the final say on their money matters and decisions about them rest with the investors themselves.
However, levels of investment literacy and awareness of rights and responsibilities are terribly inadequate. Investors, even those who are literate, can be unaware and negligent.
We have been speaking of nominations in the last few instalments of CoverNote. Let us look briefly at a recent announcement that women government employees and pensioners are now permitted to nominate the family pension from their Employee Provident Fund (EPF) Account to their children overlooking their spouse.
Earlier, the family pension could go only to the surviving spouse and the children, with other family members becoming eligible only after the death of the spouse. This is pretty much micro-management.
Having said that, the current ‘liberalisation’ is not far from micro-management either. This amendment applies only where there are pending divorce proceedings or cases filed under laws such as the Protection of Women from Domestic Violence Act, Dowry Prohibition Act or the Indian Penal Code.
And procedures exist to avail of the facility. A written request must be sent by the employee or pensioner concerned to the head of office stating that “family pension should be granted to her eligible child/children in precedence to her spouse, in the event of her death during the ongoing proceedings.”
One can appreciate the historical reasons for prescriptive and restrictive rules on nominations among other things. It indeed has cemented social security for families who lose the bread earner and who could have become indigent without this protective rule.
Yet, sections of the society are changing vastly and at different paces. It is high time we undertake a meaningful and realistic review taking all this into account.
There are more questions, not so outlying as we may think.
Here is one such query, from a friend who finds EPF nomination rules falling short of her requirement.
Working in the private sector, she is a single woman with no children. She can nominate only her mother or brother under the rules, but her mother is much older and her brother is well off. ‘Why should I not be free to nominate somebody else, why not to a charitable organisation?’ she asks.
And, why not?
(The writer is a business journalist specialising in insurance & corporate history)