LIC alone to get subsidy for pension scheme

NEW DELHI APRIL 15. The Government has thumbed down requests of private insurers for granting interest subsidy on pension schemes, as it has promised to the Life Insurance Corporation for its proposed `Varistha Pension Bima Yojana' assuring a hefty 9 per cent return.

"Only the LIC will be getting the interest subsidy for the pension scheme for senior citizens. The subsidy would be given annually,'' a Finance Ministry official told PTI, adding the benefit has been ruled out for private players.

Triggering pension reforms in the country, the Finance Minister, Jaswant Singh, announced budgetary support to the insurance monolith to bridge the gap between 9 per cent assured return and the LIC's actual return on investment for its proposed pension scheme.

The Varistha Bima Pension Yojana scheme being drawn up by the LIC proposes to offer Rs. 250-2,000 monthly pension for citizens above 55 years. Soon after the budget announcement, private players had given a representation to the Finance Ministry and sought the same benefit. Private players such as ICICI Prudential Life, HDFC Standard Life, ING Vysya Life and Aviva Life have already launched their pension plans.

The differential treatment of granting interest subsidy to LIC only would put a question mark on the Government's earlier commitment to ensure a level playing field in the insurance sector, industry sources argued.

Recommended for you