The union cabinet has approved the extension of the Pradhan MantriVayaVandanaYojana (PMVVY) up to 31st March 2023 for a further period of three years. Earlier, the last date of PMMVY was March 31, 2020.
The assured rate of return for fiscal 2020-21 has been fixed at 7.4 per cent per annum, thereafter delegating the authority to the finance minister to approve annual reset rate of return at the beginning of every financial year. Earlier, the scheme offered an assured return of 8 per cent.
The extension of PMVVY will continue to enable old age income security and welfare of senior citizens, as the entry age in the scheme is 60 years.
In a falling interest rate scenario, a fixed return of nearly 8 per cent with high safety of capital is what PMVVY has to offer to investors.
LIC is the sole institution allowed by the government to offer online and offline plans under PMVVY. It is intended to give an assured minimum pension to senior citizens.
The scheme management expenses are capped at 0.5 per cent of assets for the first year of the scheme, and 0.3 per cent per annum for subsequent years.
In the 2018-19 Budget, the maximum investment limit under PMVVY has doubled to Rs 15 lakh per senior citizen in the scheme.
At the end of each period during the policy term of 10 years, the pension is payable in the intervals chosen by the pensioner at the time of purchase. The intervals can be monthly, quarterly, half-yearly, or yearly.