PFRDA to launch pension scheme for poor

Interim pension regulator PFRDA on Thursday introduced a new scheme, NPS Lite, for the economically deprived sections of the society.

"PFRDA has introduced NPS-Lite which specifically targets the economically disadvantaged sections of society and promotes small savings during their productive life," Pension Fund Regulatory and Development Authority (PFRDA) said in a statement.

The scheme aims at building up a corpus sufficient enough to buy an annuity for their old age.

It further said that the government's 'Swavalamban Scheme', which grants an incentive of Rs 1,000 to all eligible New Pension System (NPS) accounts shall be available to all NPS Lite account holders as well, if they meet the prescribed criteria.

Finance Minister Pranab Mukherjee in his Budget speech had said the government would contribute Rs 1,000 annually to each NPS account opened in 2010-11.

The initiative, 'Swavalamban', will be available for persons who join NPS, with a minimum contribution of Rs 1,000 and a maximum contribution of Rs 12,000 per annum during 2010-11, he had said.

The scheme has been designed to ensure ultra-low administrative and transactional costs, for making such small investments viable and NGOs and micro-finance institutions would be engaged to ensure that the benefits of scheme reach the target group.

"It also aims at harnessing the outreach and capacity of the Government operated schemes, NGOs, MFIs, NBFCs among others in targeting and servicing the old age savings needs of low income workers," it added.

Andhra Pradesh Building and Other Construction Workers Welfare Board has already been appointed as an aggregator under NPS-Lite for making NPS available to its more than a million potential member base.

Initially, the government launched the New Pension System for central government employees joining service from January 1, 2004, but it was extended to all citizens from May 1, 2009. However, the citizen pension scheme received a lukewarm response and only around 8,000 subscribers joined the scheme in 14 months.

In the all citizens pension scheme, a subscriber has to make minimum contribution of Rs 6,000 annually.

SOURCE;ECONOMIC TIMES