7th Pay Commission Latest News: Here comes a piece of good news for senior citizens of the country as the Central government on Wednesday decided to extend the Pradhan Mantri Vaya Vandana Yojana (PMVVY) for senior citizens for three years till March 2023. Also Read - 7th Pay Commission Latest News: Govt Says Employees' PF Contribution Can go More Than Just 10%
A social security scheme, the PMVVY is implemented through the Life Insurance Corporation (LIC). The objective of the scheme is to give an assured minimum pension to senior citizens (60 years and above) based on an assured return on the purchase price/subscription amount. Also Read - 7th Pay Commission Latest News: Tamil Nadu Govt Extends Retirement Age of Employees to 59 From 58
A statement from the Central government said that the assured rate of return for the fiscal year 2020-21 has been pegged at 7.4 per cent per annum and thereafter it will be reset every year. However, the Union Cabinet decided to extend the scheme for a further period of three years up to March 31, 2023. Also Read - 7th Pay Commission Latest News: Karnataka Govt Won’t Pay Additional Installments of DA to Employees, Pensioners
As per the update, the scheme offered an assured return of 8 per cent earlier.
The Central government’s financial liability is limited to the extent of the difference between the market return generated by LIC and the guaranteed return of 7.4 per cent per annum initially for the year 2020-21, and thereafter to be reset every year in line with Senior Citizens Saving Scheme (SCSS).
The statement from the Centre further added that the expenses on managing the scheme are capped at 0.5 per cent of assets under management per annum for the first year of the scheme, and 0.3 per cent per annum in second year onwards for the next nine years.
“As such the expected financial liability will range from an estimated expenditure of Rs 829 crore in the financial year 2023-24 to Rs 264 crore in last FY 2032-33,” the release added further.
It further stated that the average expected financial liability for the subsidy reimbursement, calculated for annuity payment on an actual basis, is expected to be Rs 614 crore per year for the currency of the scheme.
In general, the pension is payable at the end of each period during the policy term of 10 years, as per monthly, quarterly, half-yearly, yearly frequency, as chosen by the pensioner at the time of purchase.