On Wednesday, the Union Cabinet approved the extension of the government-backed senior citizen pension scheme Pradhan Mantri Vaya Vandana Yojana (PMVVY) by another 3 years to March 2023. The scheme was earlier available up till March 31, 2020 only.
For the financial year 2020-21, the annual rate of return on the retirement scheme PMVVY has been brought down to 7.4% from 8% in the previous fiscal. As per the official release, the interest on the pension scheme shall be reset every year.
"Initially an assured rate of return of 7.40 per cent per annum for the year 2020-21 per annum and thereafter to be reset every year", said an official release.
The release further said the Cabinet also approved an annual reset of assured rate of interest with effect from April 1 of the financial year, similar to revised rate of returns of Senior Citizens Saving Scheme (SCSS) up to a ceiling of 7.75 per cent, with fresh appraisal of the scheme on breach of this threshold at any point.
The scheme guarantees pension pay out at a specific rate of interest for a 10 year period. Also, upon the death of the PMVVY account holder, the nominee is entitled to death benefit as a return against the purchase price.
Also read Other details on the pension scheme, here.