• Union Cabinet has approved the extension of Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to 31st March 2023 for a further period of three years beyond 31st March 2020 to enable old age income security for Senior Citizens.

Key highlights of cabinet decisions:

• It has allowed initially an assured rate of return of 7.40 % per annum for the year 2020-21 per annum and thereafter to be reset every year.

• There will be an annual reset of the assured rate of interest with effect from April 1st of the financial year in line with the revised rate of returns of Senior Citizens Saving Scheme (SCSS) up to a ceiling of 7.75% with the fresh appraisal of the scheme on breach of this threshold at any point.

• Expenditure is to be incurred on account of the difference between the market rate of return generated by LIC (net of expenses) and the guaranteed rate of return under the scheme.

• Management expenses are capped at 0.5% p.a. of funds of the scheme for the first year of scheme in respect of new policies issued and thereafter 0.3% p.a. for the second year onwards for the next 9 years.

• It has delegated the authority to Finance Minister to approve the annual reset rate of return at the beginning of every financial year.

• The minimum investment has also been revised to Rs.1,56,658 for the pension of Rs.12,000/- per annum and Rs.1,62,162/- for getting a minimum pension amount of Rs.1000/- per month under the scheme.