Pradhan Mantri Shram Yogi Maan-Dhan
Finance Minister Piyush Goyal in his Budget 2019 speech had proposed to launch a pension scheme namely ‘Pradhan Mantri Shram-Yogi Maandhan’ (PMSYM) for the unorganised sector workers. The defined-benefit pension scheme is formally going to be launched on February 15, 2019.
In PMSYM, the individual has to contribute a fixed monthly amount till age 60, while an equal amount is put into the account by the government and thereafter from age 60, he or she will start getting pension for lifetime. PMSYM has resemblance of the EPF scheme for the workers in the organised sector wherein 12 per cent of basic salary goes into employee’s provident fund while an equal contribution is made by the employer. The idea is to let workers (organised and unorganised) save towards their retirement.
Who are covered under the new scheme?
- The unorganised sector workers, with income of less than Rs 15,000 per month and those belonging to the age group of 18-40 years, will be eligible for the scheme.
- Those workers should not be covered under New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO).
- He or she should not be an income tax payer.
How will the subscriber make the necessary contributions?
- The subscriber is required to contribute the prescribed contribution amount from the age of joining the scheme till the age of 60 years.
- The subscriber can contribute to the PM-SYM through ‘auto-debit’ facility from his or her savings bank account or from his or her Jan- Dhan account.
- Under the PM-SYM, the prescribed age-specific contribution by the beneficiary and the matching contribution by the Central Government will be made on a ‘50:50 basis’.
- Each subscriber under the scheme will receive minimum assured pension of Rs 3000 per month after attaining the age of 60 years.
- If the subscriber dies during the receipt of pension, his or her spouse will be entitled to receive 50 percent of the pension as family pension. This family pension is applicable only to spouse.
- If a beneficiary has given regular contribution and dies before attaining the age of 60 years, his or her spouse will be entitled to continue the scheme subsequently by payment of regular contribution or may even exit the scheme.
Issues with scheme
- It may not be suitable for migrants to periodically deposit
- It does not answer whether they would continue to get benefits if their salary exceeds 15000
- It is not Inflation adjusted
- Critics say that Atal Pension Yojana has just been given a new name i.e. Pradhan Mantri Sharm Yogi Man-Dhan without any substantial changes
Issues with APY
APY has failed to attract the unorganised sector
- due to its contributory nature
- the inflation-adjusted future benefits are meagre