Dept. of Financial Services

Swavalamban - The Co-contributory Pension Scheme

To encourage people from the unorganised sector to voluntarily save for their retirement and to lower the cost of operations of the New Pension System (NPS) for such subscribers, the Central Government has announced, in the Budget 2010-11, a new initiative called "Swavalamban," to be administered by the Interim Pension Fund Regulatory and Development Authority (PFRDA). The Central Government shall contribute Rs. 1000 per annum to such subscribers. This contribution by the Central Government shall be available for the current financial year and three years thereafter. As per the Government guidelines for Swavalamban, any citizen who is not part of any statutory pension scheme of the Government and contributes between Rs. 1000 and Rs. 12000/- per annum, could join the Swavalamban Scheme. It is expected that the Scheme would benefit about 10 lakh NPS subscribers of the unorganised sector. Further, Finance Minister has announced in his Budget Speech 2011-12 that: -

"I had announced a co-contributory pension scheme 'Swavalamban' in the Budget 2010-11. This scheme has been welcomed by the workers in unorganised sector. Over 4 lakh applications have already been received. On the basis of the feedback received. I am relaxing the exit norms whereby a subscriber under Swavalamban will be allowed exit at the age of 50 years instead of 60 years, or a minimum tenure of 20 years, whichever is later. I also propose to extend the benefit of Government contribution from three to five years for all subscribers of Swavalamban who enroll during 2010-11 and 2011-12. An estimated 20 lakh beneficiaries will join the scheme by March 2012."