The Swavalamban Yojana is a low cost version of new pension scheme (NPS). In essence, the scheme is designed with an intention to secure the future of financially weaker section of the society. The scheme is now a part of Jan Dhan Yojana.
Benefits from Swavalamban Yojana:
Under the scheme Swavalamban Yojana, Government will contribute Rs.1000/-per year to each NPS account. The benefit will be available to person who join the NPS with a minimum contribution of Rs.1000/- in tier 1 account and maximum contribution of Rs.12000/- per annum including contribution made towards tier 2 account.
The benefit of government contribution under of scheme originally extended to accounts opened in the year 2012 and subsequently extended up to financial year 2016-17. The scheme is subject to revision from the government from time to time.
Subscriber in the age group of 18 years to 60 years can join the scheme and contribute to the scheme up to the age of 60 years. The exit option from tier 1 account of Swavalamban is on the same condition applicable to tier 1 of NPS. Subscriber after attaining the age of 60 years shall annuitise minimum 40% of pension wealth accumulated in NPS. The yield on annuitised fund will be paid to the subscriber by way of monthly pension with minimum pension of Rs.1000/- per month. Individual who wish to exit from the tier 1 account before the age of 60 years shall annuitise minimum 80% of pension wealth in his name. The annuitised pension wealth should be sufficient to yield minimum pension of Rs.1000/- per month. If the annuitized amount is not sufficient to offer minimum pension, the percentage of annuitised amount to be increased to the level that is sufficient to offer pension of Rs.1000/- per month.
Tier 1 and Tier 2 accounts:
There is no difference between tier 1 and tier 2 accounts of Swavalamban. It is same as tier 1 and tier 2 of NPS. The subscriber can contribute to both tier 1 and tier 2 accounts of Swavalamban with a minimum contribution of Rs.1ooo/- per year in tier 1 account. The advantage of contributing in excess of Rs.1000/- in tier 2 is that it allows hassle free withdrawal of balance lying in the accounts.
Eligibility to open the account:
All citizens in the unorganized sector (person who is not in regular employment in government departments/PSU having employer assisted retirement scheme) and persons who are not covered under any of the following laws can join Swalamban Pension Scheme.
- EPF and miscellaneous provision act 1952.
- Coal & mine PF and miscellaneous provision act 1948
- The seamen’s PF Act 1966
- Assam Tea Plantation PF & Pension Act 1961
- All other definition as given in the NPS offer will apply to the terms used in the scheme.
Administration of the scheme:
The scheme is administered by Pension Fund Regulatory and Development Authority (PFRDA).
Related article:
(1) New Pension System (NPS): Is it provides you peaceful retirement plan?, (2) Details of New Pension System (NPS)
