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Wednesday, Aug 20, 2003

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PF subscribers above 55 can draw 90% for pension scheme

Ambarish Mukherjee

New Delhi , Aug. 19

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 (CBT) of the EPFO which met here today.

"The move will call for amendment in the EPFO Act which will be taken up soon," Government sources said, and added that 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, the sources said.

LIC's Varistha Pension Bima Yojna 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, officials said. After the necessary amendments in the EPFO Act, they said, separate administrative arrangements would be put in for direct transfer of funds to the LIC.

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