The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given its ex-post facto approval for the Varishtha Pension Bima Yojana (VPBY) 2003 launched on 14th July, 2003 and Varistha Pension Bima Yojana (VPBY) 2014 launched on 14th August, 2014. The Cabinet also granted approval for expenditure incurred on subsidy amount released to LIC during the period of 2003-04 to 2014-15 for VPBY, 2003 and approval to incur expenditure on VPBY, 2003 and 2014 from the financial year 2015-16 onwards.
The Schemes are implemented through Life Insurance Corporation (LIC) of India, and the difference between the actual yield earned by LIC on the funds invested under the Scheme and the assured return committed by the Government is paid as subsidy to LIC.
Both are pension schemes intended to give an assured minimum pension to the Senior Citizens based on an assured minimum return on the subscription amount. The pension is envisaged until death from the date of subscription, with payback of the subscription amount on death of the subscriber to the nominee.
Both the schemes VPBY – 2003 and VPBY – 2014 are closed for future subscriptions. However, policies sold during the currency of policy are being serviced as per the commitment of guaranteed 9% return assured by the Government under the schemes. VPBY-2014 was open from 14th August, 2014 to 14th August, 2015. As on 31st March, 2016, a total number of 3,17,991 annuitants are being benefited under VPBY 2014. Similarly, a total number of 2,84,699 annuitants are being benefited under VPBY- 2003 as on 31st March, 2016.