The Central Cabinet had made a crucial decision by approving a pension scheme for senior citizens. According to the meeting headed by Prime Minister Narendra Modi, the Life Insurance Corporation of India would give a guaranteed return of 8 percent for ten years.
The union cabinet also gave a final nod for launching the prestigious Varishtha Pension Bima Yojana 2017 (VPBY 2017). The implementation of this scheme would be under the state-owned LIC.
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Under the new pension scheme, the old citizens who are above 60 plus will be benefited with guaranteed returns. Thus the government is providing the senior citizens’ social security despite the market conditions at the time of return.
The differed amount between the assured return and return made by LIC would be borne by the Government of India as a subsidy to the pensioners.
The Government said that “It will provide an assured pension based on a guaranteed annual return of 8 per cent for ten years, with an option to opt for the pension on a monthly, quarterly, half-yearly and annual basis.”
VPBY-2017 will be available for annual subscription from the date of launch. PM Modi announced this Pension scheme during his talk with the nation on December 31
Advantages of Varishtha Pension Bima Yojana (VPBY)
- It contains very little risk, since the pension scheme was introduced by the Central Government
- Under the VPBY scheme Senior citizens can choose for a pension on monthly/quarterly/half-yearly or annual basis
- Up to 7.5 lakh Rupees can be invested by the senior citizens under the VPBY scheme.
- The VPBY scheme offers Interest rate of 8 percent which is higher than that of SBI’s 7 percent.