The Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme, meant for senior citizens, has now been extended till March 31, 2023. This scheme was open till March 31, 2020.
According to a tweet by K.S. Dhatwalia, Principal Director General of the Press Information Bureau, “Cabinet approves extension of ‘Pradhan Mantri Vaya Vandana Yojana’ (#PMVVY) up to 31st March, 2023 for further period of three years beyond 31st March, 2020; This to enable old age income security and welfare of Senior Citizens” .
According to a tweet by Secretary, Department of Financial Services, Ministry of Finance, GOI, “Government extends PMVVY till 31st March, 2023 with assured return of 7.40 per cent per annum for FY 2020-21. Annual reset of rate of return on April 1st of every new FY. All other terms and conditions continue to be same.”
What is Pradhan Mantri Vaya Vandana Yojana?
This scheme offered by Life insurance Coporation (LIC) of India gives a guaranteed payout of pension at a specified rate for 10 years. It also offers a death benefit in the form of return of purchase price to the nominee.
So, if you are a senior citizen and have lump sum money in your bank account, then you can consider buying this immediate annuity scheme till March 31, 2023.
Press Information Bureau (PIB) states the following important details of the pension scheme.
- To allow initially 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.
- Approval 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.
- Capping 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.
- Delegating the authority to Finance Minister to approve annual reset rate of return at the beginning of every financial year.
Eligibility criteria and other conditions:
- Minimum entry age: 60 years (completed)
- Maximum entry age: No limit
- Policy term: 10 years
- Minimum pension: Rs 1000 per month
- Maximum pension: Rs 10000 per month. The total amount of pension allowed per senior citizen should not exceed the maximum pension limit.
Mode of pension payment
The modes of pension payment are monthly, quarterly, half-yearly and yearly. The pension payment is processed through NEFT or Aadhaar Enabled Payment System. Thus, depending on the mode of pension payment, that is, monthly, quarterly, half-yearly or yearly, the first instalment of pension will be paid after a month, three months, six months, or a year from the date of purchase of the scheme respectively.
The scheme can be purchased by investing a lump sum in PMVVY pension scheme in the following manner, according to which you will get the pension income.
As per PIB release, “The minimum investment has also been revised to Rs 1,5 6,658 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.”
You can buy PMVVY pension scheme from Life Insurance Corporation of India (LIC) of India. You can purchase the scheme either offline or online. If you want to purchase it offline, you must visit the nearest LIC office. However, if you want to purchase the annuity scheme online, log on to the website of LIC – www.licindia.in.
Points to note
Maturity benefit: If the pensioner survives till the end of the policy term of 10 years, purchase price of the annuity along with final pension installment will be payable to the policyholder.
Death benefit: If the pensioner dies during the policy term of 10 years, the purchase price of the annuity scheme will be refunded to the beneficiary.
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