21% unorganised workers opted out of Centre's pension scheme in six months

The Centre's pension scheme for unorganised workers, Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM), saw nearly 21 per cent of subscribers leave in less than six months, raising concerns about the scheme's viability, reported The Economic Times (ET).

The overall number of subscribers to the scheme decreased to 4.43 million on July 11, down 1.19 million from an all-time high of 5.62 million on January 31.

Experts relate this to high inflation and rising living costs, which have made it difficult for unorganised workers to continue contributing to this voluntary pension program or may even push them to withdraw their share of payment.

"Stubbornly high prices have raised the actual cost of living, making it difficult for these workers to sustain the burden of monthly contribution under the scheme," labor economist KR Shyam Sundar told ET.

He added, "It would not be surprising if these are permanent exits, with workers actually withdrawing their contribution as well as the interest earned on it as high prices continue to pinch their pockets."

According to the scheme guidelines, if a subscriber leaves the scheme in less than ten years, the beneficiary will be allowed to withdraw his share of contribution with savings bank interest rate.

However, if a subscriber exits after ten years or more but before superannuation at the age of 60 years, the beneficiary's share of contribution along with accumulated interest as actually earned by the fund or at the savings bank interest rate, whichever is higher, will be credited to the beneficiary.

PM-SYM is a voluntary contributory pension scheme that aims to bring millions of unorganised workers into the social security net. It serves unorganised sector workers aged 18 to 40 and earning less than Rs 15,000  per month.