Photo: Mint
Photo: Mint

Govt expands scope of flagship pension scheme ahead of rollout

  • Govt extends unorganized sector employees’ pension scheme to those under 40, clarifies some clauses
  • After the death of the subscriber, as well as the spouse, the entire corpus will be credited back to the fund

NEW DELHI: The Union government on Thursday extended the unorganized sector employees’ pension scheme to those under 40. It also made the 12-digit unique identity number, or Aadhaar, mandatory for enrolling in the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) scheme.

While finance minister Piyush Goyal in his interim budget speech had indicated that employees between the age of 18 and 29 may be the prime beneficiaries, the Union government on Thursday said that workers between the age of 18 and 40 can enrol for it by paying a nominal amount.

The centre also clarified several clauses related to the eligibility criteria, entry and exit clauses, the pension accumulations and the family benefits ahead of its rollout on Friday. The labour ministry, which will be the nodal body, shall execute the pension scheme through the Life Insurance Corporation of India as the pension fund manager.

Individuals joining the PM-SYM will have to contribute till the age of 60, in order to avail of an assured pension of 3,000 every month.

According to the fresh guidelines, monthly contributions will vary according to age: an 18-year-old starts out by paying 55 per month, which moves up to 80 at the age of 25, and 105, 150 and 200 for those aged 30, 35 and 40, respectively.

A matching amount will be paid by the government into the pension fund.

If the pensioner dies, the spouse shall be entitled to receive 50% of the pension amount as family pension, the ministry clarified.

Besides, if a regular contributor dies before the age of 60, “the spouse will be entitled to join and continue the scheme subsequently by payment of regular contribution or exit the scheme as per provisions of exit and withdrawal".

The labour ministry said, considering the hardships and erratic nature of employment of such workers, it has made exit provisions flexible.


In case a subscriber exits within 10 years, the accumulated corpus from their contribution plus savings bank interest rate (4%) will be returned. If the subscriber exits after 10 years, on superannuation, they will get back their share of contribution along with the accumulated interest earned by the fund, or at the savings bank interest rate, whichever is higher. It means that the money contributed by the central government every month will not be part of the corpus that will be returned to the subscriber.

If a regular subscriber “becomes permanently disabled before the superannuation age of 60, and is unable to contribute, the spouse will be entitled to continue the scheme with regular contributions, or exit the scheme by receiving the beneficiary’s contribution with interest as actually earned by the fund or at the savings bank interest rate, whichever is higher".

After the death of the subscriber, as well as the spouse, the entire corpus will be credited back to the fund.

Informal workers across sectors can approach Life Insurance Corporation offices, employees’ state insurance corporations and employees’ provident fund offices and community service centres to get enrolled. The amount collected under PM-SYM shall be invested as per the investment pattern specified by the government of India.

Close