pension scheme for unorganised sector workers

Union Finance Minister Pranab Mukherjee on September 26th launched a pension scheme for workers in the unorganised sector who do not have access to the social security net.

Under the scheme — which is named ‘Swavalamban' — subscribers would get Rs.1,000 from the government each year for a subscription amount of Rs.12,000 per year. The scheme will remain valid for this financial year and for the next three consecutive fiscals.

Mr. Mukherjee has already allocated Rs. 100 crore for the scheme in the budget for 2010-11. It will be managed by the Pension Fund Regulatory and Development Authority of India.

A subscriber can enter the scheme at the age of 18 years and will be eligible for pension after turning 60. Mr. Mukherjee said 87 per cent of the country's workforce would benefit from the ‘Swavalamban' scheme, adding that there were eight crore people above 60 who were not getting pension. This figure will rise to 20 crore over the next 17-18 years. On turning 60, the pensioner can withdraw 60 per cent of his contribution, while the balance will be given as a monthly annuity by the LIC. The LIC has been appointed one of the many aggregators who will collect subscription amounts from subscribers.