Cabinet extends Pradhan Mantri Vaya Vandana Yojana: Check details of this senior citizen pension scheme

New Delhi: The Union Cabinet on Wednesday approved extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to 31st March, 2023 for further period of three years beyond 31st March, 2020.

Consequently, he last date to invest in PMVVY will be March 31, 2023.

PMVVY is a social security scheme for senior citizens intended to give an assured minimum pension to them based on an assured return on the purchase price / subscription amount.

The PMVVY scheme, implemented through the Life Insurance Corporation (LIC), is intended to give an assured minimum pension to senior citizens (60 years and above) based on an assured return on the purchase price/subscription amount.

The Pradhan Mantri Vaya Vandana Yojana for Senior Citizens has also revised the minimum investment to Rs 1,56,658 for pension of Rs 12,000 per annum and Rs 1,62,162 for getting a minimum pension amount of Rs 1000 per month under the scheme.

It will initially give an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.

Annual reset of assured rate of interest with effect from April 1st of financial year in line with revised rate of returns of Senior Citizens Saving Scheme (SCSS) upto a ceiling of 7.75% with fresh appraisal of the scheme on breach of this threshold at any point.

The government has approved for expenditure to be incurred on account of the difference between the market rate of return generated by LIC (net of expenses) and the guaranteed rate of return under the scheme.

Government has capped Management expenses at 0.5% p.a. of funds of the scheme for first year of scheme in respect of new policies issued and thereafter 0.3% p.a. for second year onwards for the next 9 years.

Government will delegate the authority to Finance Minister to approve annual reset rate of return at the beginning of every financial year.

The expenses on managing the scheme, are capped at 0.5% of assets under management per annum for the first year of the scheme and 0.3% p.a. for second year onwards for the next nine years. As such the expected financial liability v/ill range from an estimated expenditure of Rs. 829crore in the financial year 2023-24 to Rs. 264crore in last FY 2032-33, an official release said.