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A Comparison Of PMSYM With APY, EPF
To also include the laborer class in the pension net such that they live their sunset years with some financial respite, Piyush Goyal in the Interim Budget 2019 came up with a novel pension scheme for workers in the unorganized sector named Pradhan Mantri Shram Yogi Maandhan (PMSYM).
And further to boost participation in the scheme, it is suggested that the LIC- administered scheme can likely announce interest rate for the scheme at 8%, bringing it at par with other pension schemes for the organized sector such as EPF. Currently, EPF is providing an interest rate of 8.55% and for the FY19 the centre is mulling no change in the rate of return for its subscribers.
The scheme has been launched from February 15, 2019.
Eligibility and other rules of PMSYM Pension scheme
To enroll in the pension scheme, the worker should be from the unorganized sector and be aged between 18-40 years. So, individuals over 40 years will not be eligible to avail pension under the scheme. Workers from the sector with earnings up to Rs. 15,000 per month will get a pension of Rs. 3000 on a monthly basis on attaining the age of 60 years for the lifetime. For this, they need to make a fixed monthly contribution till 60 years of age. And a similar amount will be contributed towards the PMSYM account of the unorganized worker by the government.
Through the scheme, the centre aims at roping in 10 crore workers from the informal sector.
Workers who joins the scheme at the age of 18 years will need to contribute Rs. 55 per month and the same amount shall be contributed to his or her PMSYM account by the government. All other subscribers aged over 29 years need to deposit Rs. 100 per month towards the scheme.
IRDAI is yet to announce the rate of interest for the PMSYM pension yojana for the first year of the scheme's operation.
PMSYM vs other pension schemes such as APY, EPF
| Conditions | APY | PMSYM |
|---|---|---|
| Type of Scheme | Defined benefit | Defined benefit |
| Entry age | 18-40 years | 18 years |
| Income eligibility | -- | Up to Rs. 15,000 per month |
| Govt contribution | 50% of the total contribution or Rs. 1000 per annum, whichever is lower | monthly contribution similar to that made by subscribers |
| Monthly pension benefits | Rs. 1000- Rs. 5000 | Rs. 3000 |
| Access points | Linked to bank account | Linked to bank account |
It is to be noted that in APY, the subscriber can choose the benefit slab which is segregated between Rs. 1000 and Rs. 5000 and in multiples of Rs. 1000 whereas in PMSYM, participant will be provided a fixed monthly pension of Rs. 3000 after attaining 60 years of age.
EPF is another formal sector pension scheme with co-contribution by employee and the employer. In it 12% of the basic pay of the salaried from the organized sector goes towards the EPF account and a similar contribution is made by his or her employer.
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