Life Insurance Corporation would launch a special pension policy for senior citizens titled "Varishta Pension Bima Yojana" with an annual return of nine per cent in the form of a monthly pension scheme.

This was announced by Finance Minister Jaswant Singh while presenting the Union Budget 2003-04 in Parliament.

Under this scheme, any citizen above the age of 55 years would qualify and get a monthly return in the form of pension for life.

After demise, the initial amount deposited would be returned to the spouse or nominee under the policy. The minimum and maximum monthly pension would be Rs 250 and Rs 2,000 per month.

This monthly pension scheme would start from the month following payment of the lump sum amount by the policyholder.

The difference between the actual yield earned by LIC on the funds invested under this scheme and the assured return of nine per cent would be reimbursed annually to LIC by the government.

A restructured pension scheme for new entrants to the central government (except in case of the armed forces) and for the general public has been finalised, the finance minister said.

The scheme would be based on defined contributions, shared equally in case of government employees between the government and the employees.

There would be no contribution from the government in respect of individuals who are not government employees.

A new Pension Fund Regulatory and Development Authority would be created to supervise the pension funds.

PTI