Pension scheme for informal workers hits stagnation point

Source: Livemint

What is the News?

The number of people joining the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) scheme, has hit an all-time low. This is due to workers in the informal sector facing income and job loss following the two waves of the coronavirus pandemic.

About Pradhan Mantri Shram Yogi Maan-dhan(PM-SYM) Scheme:

1. Launched by: Ministry of Labour and Employment 
2. Type: Central Sector Scheme 
3. Aim: It is a voluntary and contributory pension scheme that aims to ensure old age protection for Unorganised Workers.
4. Coverage: The scheme covers unorganised workers (home-based workers, street vendors, mid-day meal workers, head loaders, landless labourers and similar other occupations) whose monthly income is Rs 15,000/ per month or less. The beneficiary should also belong to the entry age group of 18-40 years.
   • Moreover, they should also not be covered under New Pension Scheme (NPS), the Employees’ State Insurance Corporation (ESIC) scheme or the Employees’ Provident Fund Organisation (EPFO). Further, he/she should not be an income taxpayer.

Key Features of the Scheme:

1. Minimum Assured Pension: Each subscriber under the PM-SYM, shall receive a minimum assured pension of Rs 3000/- per month after attaining the age of 60 years.
2. Matching Contribution: It is a contributory pension scheme on a 50:50 basis where prescribed age-specific contributions shall be made by the beneficiary and the matching contribution by the Central Government. 
   • For example, if a person enters the scheme at an age of 29 years, he is required to contribute Rs 100/ – per month till the age of 60 years an equal amount of Rs 100/- will be contributed by the Central Government.
3. Family Pension: During the receipt of a pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as a family pension. Family pension is applicable only to spouses.
   • If a beneficiary has given regular contribution and died due to any cause (before age of 60 years), his/her 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.
4. Fund Management:  The scheme will be implemented through the Life Insurance Corporation of India and CSC eGovernance Services India Limited (CSC SPV). LIC will be the Pension Fund Manager and responsible for Pension payouts.