PF subscribers above 55 allowed to draw 90% for pension scheme

Our Economy Bureau
20 August 2003

New Delhi: The Employees Provident Fund Organisation (EPFO) has decided to allow provident fund subscribers above the age of 55 to withdraw up to 90 per cent of the accruals for investment in the Varishta Pension Bima Yojana run by the Life Insurance Corporation of India (LIC).

The decision to this effect was taken by the Central Board of Trustees of the EPFO, which met here yesterday.

"The move will call for amendment in the EPFO Act which will be taken up soon," say government sources. "The objective of the entire exercise is to ensure that senior citizens take the maximum advantage by investing in both the schemes simultaneously. On one hand, the subscriber gets all the advantages of what he is entitled to under the EPF Act as well as on the other, reaps the benefits of the Varistha Pension scheme."

LIC's Varistha Pension Bima Yojana offers a 9-per cent return to subscribers above the age of 55 years. The minimum investment required to participate in the scheme is Rs 33,335 while the maximum amount one can invest is Rs 2,77,490.

The pension scheme will yield an annual return of 9 per cent for which the central government will subsidise LIC annually for the difference between the actual yield on its investment and the assured return of 9 per cent, the officials add. "After the necessary amendments in the EPFO Act separate administrative arrangements will be put in for direct transfer of funds to the LIC."