Government of India in the Union Budget 2014-2015, announced the revival of Varishtha Pension Bima Yojana (VPBY). The Union Finance Minister Shri Arun Jaitley said in his Budget Speech, "NDA Government during its last term in office had introduced the Varishtha Pension Bima Yojana (VPBY) as a pension scheme for senior citizens. Under the scheme, a total number of 3.16 lakh annuitants are being benefited and corpus amounts to Rs.6, 095 Crore. I propose to revive the scheme for a limited period from 15th August 2014 to 14th August 2015 for the benefit of citizens aged 60 years and above".
The Union Finance Minister said that Varishtha Pension Bima Yojana (VPBY) will benefit the vulnerable section of society with limited resources as it will provide monthly pension ranging from Rs 500/ to Rs 5,000/ per month to senior citizens of the country. The Finance Minister Shri Jaitley said that VPBY is like reverse of a normal insurance policy as in case of VPBY, the beneficiary gets an income at the overall rate of 9.38 % per annum on their deposits as they are being paid on monthly basis.
This initiative reflects the commitment of the Government to the welfare and well-being of the senior citizens of the country, which is especially important in the light of the increasing longevity in India, which has gone up substantially. The subscription to the scheme is likely to create a corpus of more than Rs. 10,000 crore, and would thus also be a significant source of resource mobilization for the development of the country.
Under this revived Varishtha Pension Bima Yojana (VPBY), the senior citizens would get pension on fixed basis either on yearly or monthly basis which will provide social security to senior citizens.
LIC of India has been given the sole privilege to operate this scheme.
2. Benefits:
a. Pension Payment:
During the lifetime of a Pensioner, pension in the form of immediate annuity as per mode chosen by the Pensioner shall be payable.
b. Death Benefit:
On death of the Pensioner, the Purchase Price shall be refunde
Some key features of the scheme are:
· Available to citizens aged 60 years and above.
· Pension would be on immediate annuity basis in monthly, quarterly, half-yearly or annual mode, varying, respectively, between Rs. 500 to 5000 (monthly), Rs. 1500 to 15,000 (quarterly), Rs. 3000 to Rs. 30,000 (half-yearly) and from Rs. 6,000 to Rs. 60,000 (annually), depending on the amount subscribed and the option exercised.
· The payout implies an assured return of 9% on monthly payment basis, which amounts to an annualized return of 9.38%.
· Loan (up to 75% of subscribed amount) can be availed after 3 years from the Date of Commencement.
· On death, the full purchase price will be refunded to nominee.
· Exit/surrender would be allowed after 15 years or earlier in special circumstances like critical / terminal illness of self or spouse.
· Payment will be through ECS or NEFT.
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