Labour Ministry to appoint actuary for valuation of PM-SYM pension scheme

The government is set to assess its flagship pension scheme for the unorganised sector and will soon appoint an actuary to conduct an actuarial valuation.

The actuary will be appointed by the labour ministry to assess the Pradhan Mantri Shram Yogi Maandhan (PM-SYM) yojana. The scheme has failed to pick up pace, even after more than five years since it was launched in March 2019. 

“The actuary will have to assess the long-term financial sustainability of the scheme by developing a financial model based on actuarial assumptions and analysis to determine the impact of suggested future changes envisaged to the pension scheme like reassessment/re-fixation of contribution rates, restricting benefits of scheme to subscriber and spouse only among others,” read a request for proposal (RFP) released by the labour ministry earlier this month. 

The actuary will also conduct an actuarial valuation of the PM-SYM scheme’s assets and liabilities at the end of each financial year starting 2022 (FY22), by estimating actuarial value of PM-SYM scheme required for meeting the future liability, projected value of corpus and gap funding. 

The proposal also requires the actuary to estimate the liability on account of the benefit under the PM-SYM scheme guaranteed by government after considering the provisions of gap funding made and to estimate the scheme’s corpus position to meet guaranteed pension liability from the period 2038-2039 on an annual basis. 

The scheme was announced in the 2019 interim Union Budget by the then finance minister Piyush Goyal. It was intended to cover around 100 million people in the next five years. It was meant for workers in the age group of 18-40 years whose monthly income was Rs  15,000 or less and who have not joined schemes like Employee Provident Fund or Employee State Insurance Corporation.

“It is expected that at least 100 million labourers and workers in the unorganised sector will avail the benefit of Pradhan Mantri Shram-Yogi Maandhan within the next five years, making it one of the largest pension schemes in the world,” Goyal had said.

According to the RFP, a total of 4.99 million workers had joined the scheme by the end of FY24 and it has accumulated a corpus of Rs 3414 crore.  

Earlier last year, responding to a query by the parliamentary standing committee on labour, ministry officials had listed the long-term financial commitment required by the beneficiaries, the sudden outbreak of the pandemic, the presence of Atal Pension Yojana covering unorganised workers and the provision of free pension by states like Rajasthan and Haryana as some of the reasons for the poor performance of the scheme. 

“Currently, the ministry has appointed the Indian Institute of Public Administration (IIPA) for carrying out a third party evaluation of the scheme to identify the hurdles in scheme implementation. Scheme guidelines will be revised accordingly to cover maximum unorganised workers. The final report is awaited,” a labour ministry official said.