Enrolment for pension scheme for informal workers plunges in pandemic year

Workers | The unorganised sector will receive a monthly payment of Rs 3,000 as pension following retirement. The scheme will benefit more than 10 crore workers. Those who join at 18 years of age will have to contribute Rs 55 per month. The government will contribute equal matching share in the pension account. This scheme will cost the government Rs 500 crore.

Enrolment of informal workers for the government's contributory pension scheme, Pradhan Mantri Shram-Yogi Maandhan (PMSYM) plunged 92 percent in FY21, which experts say reflects job and income uncertainty created by the pandemic.

Total enrolment for the scheme fell to only 1,29,613 in 2020-21 from 15,76,206 in the previous fiscal.

Prashant Singh, Vice President and Business Head-Compliance and Payroll Outsourcing, TeamLease Services, said, "Migration challenges and overall instability in job & income coupled with job losses is a critical reason for the low enrollment for the scheme."

Singh also attributed low enrollment to break in jobs, lack of work, and savings.

The scheme was launched in the interim budget of 2019 in February. Under it, an unorganised worker aged between 18-40 years has to contribute between Rs55-200 and the central government makes a corresponding contribution. The worker has to contribute until till the age of 60.

Upon joining the scheme, the subscriber will be eligible for an assured pension of Rs 3,000 a month upon reaching the age of 60.

Workers in the unorganised sector whose monthly income is Rs 15,000 per month or less and who are not covered under the New Pension Scheme (NPS), Employees’ State Insurance Corporation (ESIC) scheme or Employees’ Provident Fund Organisation (EPFO) are eligible for the scheme