Government to launch a new pension scheme for senior citizens

On Friday, the government is all set to launch a pension scheme for senior citizens that promises an assured return of 8%. The Pradhan Mantri Vaya Vandana Yojana (PMVVY), which was announced in the 2017-18 Union Budget will be launched by finance, defence and corporate affairs minister Arun Jaitley. People aged 60 and above can avail this scheme which can be purchased offline as well as online through the state-run Life Insurance Corporation (LIC) of India. The LIC has been given the mandate to run this scheme. With this plan, the government aims to provide pension benefits to those people who lack social security benefits. The pension scheme can be purchased by making a one-time payment. It provides an annual assured return of 8% payable monthly for 10 years. The scheme has been available from May 4 and closes on May 3 next year. A finance ministry statement said that the scheme will be exempt from the Goods & Services Tax (GST). At the end of the policy term of 10 years, the purchase price will be remitted along with the final pension installment. After three years, pensioners can avail of a loan up to 75% of the purchase price. The interest on the loan will be deducted from the pension installments and the loan from claim proceeds. In the case of an emergency requiring the pensioner to make a premature exit, 98% of the purchase price will be refunded.