Cabinet nod to LIC pension for elderly

Tribune News Service

New Delhi, January 24

The Union Cabinet today approved a pension scheme for senior citizens. To be implemented through the Life Insurance Corporation of India (LIC), the scheme will provide a guaranteed return of 8 per cent for 10 years.

The Cabinet gave post facto approval for launching the Varishtha Pension Bima Yojana-2017 (VPBY-2017), which is part of the government’s commitment for financial inclusion and social security, an official statement said.

The scheme would be implemented during the current financial year to provide social security during old age and protect the elderly (aged 60 years and above) against any future fall in their interest income. It will provide an assured pension based on a guaranteed rate of return of 8 per cent per annum for 10 years, with an option to opt for pension on monthly, quarterly, half yearly and annual basis.

The differential return or the difference between the return generated by the LIC and the assured return of 8 per cent per annum would be borne by the Centre as subsidy on an annual basis. 

The pension scheme is proposed to be open for subscription for one year from the date of launch. The earlier VPBY-2014, announced in the Union Budget 2014-2015, for the benefit of citizens aged 60 years and above, offered an income at an overall rate of 9.38 per cent per annum on deposits being paid on a monthly basis. It effected into a guaranteed 9 per cent return assured by the government.  The VPBY-2014 was open from August 14, 2014, to August 14, 2015.

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