The Union Cabinet on Tuesday gave post-facto approval for the Varishtha Pension Bima Yojana 2017 (VPBY-2017) as part of financial inclusion and social security programmes.

"The scheme would be implemented through Life Insurance Corp (LIC) during the current financial year to provide social security during old age and protect elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions," the Finance Ministry said in a statement.

The scheme would provide an assured pension based on a guaranteed rate of return of 8 per cent per annum for 10 years, with an option to opt for pension on a monthly, quarterly, half-yearly or annual basis.

"The differential return, i.e. the difference between the return generated by LIC and the assured return of 8 per cent per annum, would be borne by the government as subsidy on an annual basis," it added.

VPBY-2017 is proposed to be open for subscription for a period of one year from the date of launch.

The earlier VPBY-2014 announced in the Union Budget 2014-2015 for the benefit of citizens aged 60 years and above, had offered beneficiary an income at the overall rate of 9.38 per cent per annum on deposits being paid on monthly basis. It effected into a guaranteed 9 per cent return assured by the government. 

LIC of India has been given the sole privilege to operate this scheme. 

VPBY-2014 was open from August 14, 2014 to August 14, 2015.