Govt to launch pension scheme 'PMVVY' for senior citizens; Here are the details

Ministry of Finance on Wednesday announced that Finance Minister Arun Jaitley will be formally launching Pradhan Mantri Vaya Vandana Yojana (PMVVY) tomorrow. 

PMVVY is a Pension Scheme announced by the government exclusively for the senior citizens aged 60 years and above which is available from 4th May, 2017 to 3rd May, 2018.

"The Scheme can be purchased offline as well as online through Life Insurance Corporation (LIC) of India which has been given the sole privilege to operate this Scheme,"  the Ministry said.

As per the Ministry, the Scheme will provide an assured return of 8% per annum payable monthly (equivalent to 8.30% p.a. effective) for 10 years. The pension will be payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.

Other features of the PMVVY scheme are:

• The scheme is exempted from Service Tax/ GST.
• On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.

• Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
• The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
• On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.