Investment Cap For Senior Citizen Pension Plan Doubled To Offer Rs 10,000 A Month

The Cabinet today approved doubling the investment limit to Rs 15 lakh under the government's flagship senior citizen pension scheme.

The move will guarantee a maximum pension of Rs 10,000 a month under the Pradhan Mantri Vaya Vandana Yojana, according to a government press release. The Cabinet also extended the time limit for subscription to March 31, 2020 from May 4, 2018.

PM वय वंदना योजना (#PMVVY) राष्ट्र निर्माण में योगदान देने वाले वयोवृद्ध जनो का सम्मान . Cabinet enhances monthly max pension to Rs 10000 by raising investment limit from Rs 7.5 lakh to 15 lakh. 8% निश्चित रिटर्न. Subscription time extended to 31/3/20. @FinMinIndia @PMOIndia

“The earlier investment limit under PMVVY was low,” said Manoj Nagpal, chief executive officer at investment advisory firm Outlook Asia Capital. “It has now been brought on a par with the Senior Citizen Savings Scheme at Rs 15 lakh, which means that a person enrolled under both these schemes will have a pension corpus of at least Rs 30 lakh.”

Launched on May 4 last year, the scheme covers 2.23 lakh senior citizens as of March. This is besides the pension coverage provided by Varishtha Pension Bima Yojana, re-launched in August 2014, to 3.11 lakh senior citizens. Both these schemes are run by Life Insurance Corporation of India.

PMVVY provides an assured pension based on guaranteed a yearly rate of return of 8 percent for a decade. A beneficiary can get the pension monthly, quarterly, half-yearly or annually. The differential return, between the return generated by LIC and the assured return of 8 percent, is borne by the government as subsidy.

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