NEW DELHI: The Union Cabinet on Wednesday extended the Pradhan Mantri Vaya Vandana Yojana (PMVVY), a scheme that provides social security net for senior citizens in form of pension, till March 2023.
The PMVVY, implemented through the Life Insurance Corporation (LIC), is intended to give an assured minimum pension to senior citizens (aged 60 years and above) based on an assured return on the purchase price/subscription amount.
The scheme also provides a ‘death benefit’ in the form of ‘return of purchase price’ to the nominee.
The scheme will initially give an assured rate of returns of 7.40 per cent per annum for the year 2020-21 to eligible persons. The assured rate of returns will be reset every year thereafter.
The Cabinet has also revised the minimum investment under the PMVVY to Rs 1,56,658 in order to avail a pension of Rs 12,000 per annum. The minium investment to avail a minimum pension of Rs 1,000 per month was Rs 1,62,162.
The annual reset of assured rate of interest with effect from April 1 of FY 2019-20 is in line with the revised rate of returns of Senior Citizen Savings Scheme up to a ceiling of 7.75 per cent, with fresh appraisal of the scheme on breach of this threshold at any point.