The Ministry introduced a Pension and Life Insurance fund scheme on 1st May 2012 called Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) for the Overseas Indian workers having Emigration Check Required (ECR) passports.
MGPSY is a voluntary scheme with subscriber joining this scheme on his/her own discretion. MGPSY offers all the three Partner schemes in the form of a package and not in isolation. That is, subscribers have to opt-in all three partner schemes if he wishes to subscribe in MGPSY and registration in MGPSY will stand cancelled if the subscriber fails to get registered in any of the three sub-schemes.
Subscribers’ pension and resettlement amount will depend on (1) how much they have saved, (2) and the returns that NPS-Lite and UTI earn for their savings and the (3) co-contribution benefits from the Government.
The Scheme was initially called Pension and Life Insurance Fund
The Scheme commenced on a pilot basis in Kerala on 1st May 2012, for overseas workers in 17 Emigrant Check Required (ECR) countries -ie., those countries where social security needs of foreign workers are less /not addressed.The Scheme is named after the father of nation – Mahatma Gandhi.
This Scheme combines the three existing voluntary savings schemes functioning under the jurisdiction of three financial sector regulators –Pension Fund Regulatory Development Authority, Securities and Exchange Board of India and Insurance Regulatory Development Authority.
The objective of MGPSY:
1. To encourage and enable the overseas Indian workers by giving government contribution to:
2. Save for their Return and Resettlement (R&R)
3. Save for their old age,
4. Obtain a Life Insurance cover against natural death during the period of coverage.
The main attractions of MGPSY are:
• Government contribution of Rs.1,000 per annum in line with Swavalamban platform for all MGPSY subscriber who saves between Rs.1,000 and Rs.12,000 per year in NPS-Lite.
• A special government contribution of Rs.900 by MOIA towards Return and Resettlement (R&R) of the overseas Indian workers who save Rs.4,000 or more per annum.
• Rs.100/- for life insurance cover of Rs.30,000 per year against natural death and Rs.75,000 against death by accident through the Janshree Bima Yojana of Life Insurance Corporation of India (LIC).
• There is an integrated enrollment process for the subscribers who will be issued a unique MGPSY account number upon enrollment. On their return to India, the subscriber can withdraw the Return and Resettlement savings as a lump sum. However, the subscriber would be able to continue savings for their old age in the NPS-Lite in line with the Swavalamban scheme• Mahatma Gandhi Pravasi Suraksha Yojana is a special social security scheme which includes Pension and Life Insurance, introduced by Ministry of Overseas Indian Affairs for the overseas Indian workers in possession of Emigration Check Required (ECR) passports. It is a voluntary scheme designed to help workers to meet their three financial needs: saving for retirement, saving for their return and resettlement, and providing free life insurance offering coverage for death from natural causes.
• Mahatma Gandhi Pravasi Suraksha Yojana is a special social security scheme which includes Pension and Life Insurance, introduced by Ministry of Overseas Indian Affairs for the overseas Indian workers in possession of Emigration Check Required (ECR) passports. It is a voluntary scheme designed to help workers to meet their three financial needs: saving for retirement, saving for their return and resettlement, and providing free life insurance offering coverage for death from natural causes.
• Alternatively, the subscriber can withdraw pension corpus as per the guidelines prescribed by the Pension Fund Regulatory Development Authority(PFRDA).
• The details of the scheme were explained to the Indian Ambassadors in ECR countries.
• This information was given by the Minister of Overseas Indian Affairs, Shri Vayalar Ravi in a written reply in the Rajya Sabha today.
1. It is a social security scheme for blue-collar Indian workers who hold a temporary work permit in over 17 Emigration check required (ECR) countries. It is aimed to help these workers secure a corpus for post-retirement income and also to cover the expenses involved in returning to India and resettling into their lives again. It also provides life insurance with death benefit for natural death for the duration of coverage
2. During their period of work abroad, the scheme provides a home and life insurance cover to the tune of Rs 1 Lakh.
3. The government also contributes a certain sum based on the gender of the worker. If it is a male worker, the contribution made is Rs 2000 and for female workers, the contribution made is Rs 3000. The contributions are made for the duration of their work period or for a period of 5 years, whichever is earlier.
4. The contributions made are added to the Pension and Life insurance accounts of the eligible subscribers
5. The workers also need to contribute a certain amount towards the pension fund and return and resettlement fund. The contributions to be made by workers is Rs 400 per annum for return or resettlement fund and anywhere between Rs 1000 to Rs 12000 per annum for the pension fund. This amount is used to provide them with the corresponding benefits for life post-retirement or for their old age.
6. The Indian workers also have a support centre in UAE which is the Indian Workers Resource Centre or IWRC and the official partner bank to this scheme is Bank of Baroda which is tasked with enrolling the workers into the scheme
In detail, MGPSY provides for:
1. Pension from the age of 60 through investment in a PFRDA regulated pension scheme – NPS Lite; Withdrawal in NPS Lite is not permitted before attaining the age of 60 years, subject to the exit policy of PFRDA.
2. Savings for return & resettlement (R&R) through investment in the UTI Monthly Income Scheme (MIS) run by the SEBI regulated mutual fund Unit Trust of India(UTI); Subscriber can withdraw this amount on return to India or can remain invested;
3. Free life insurance cover against natural /accidental death and disability during the period of coverage under JanashreeBimaYojana (JBY) run by the IRDA regulated insurance firm – Life Insurance Corporation of India(LIC).
Eligibility and Conditions for Applying
- Candidate must be domicile of India
- Overseas Indian workers having Emigration Check Required (ECR) passports
- Overseas Indian workers with ECR passports and aged between 18 and 50 years on an employment/contract visa are eligible to join the scheme
The Union Cabinet under the directions of the Prime Ministre approved closure of the Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY) which was set up in 2012 to address the social security-related issues of the Emigration Check Required (ECR)-category workers going abroad for employment to ECR countries.
The subscription under the MGPSY was very low and no new subscription was received for more than a year. Closure of the scheme will, therefore, obviate the avoidable recurring administrative and record-keeping expenditure.
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