Finance Minister Arun Jaitley will, on Friday, launch the Pradhan Mantri Vaya Vandana Yojana (PMVVY), a pension scheme exclusively for senior citizens aged 60 years and above.

The PMVVY, which is available from May 4, 2017 to May 3, 2018, can be purchased offline as well as online through Life Insurance Corporation of India.

The scheme provides an assured return of 8 per cent per annum payable monthly (equivalent to 8.30 per cent per annum effective) for 10 years. It is exempt from service tax/GST.

LIC has been given the sole privilege to operate the scheme.

Under the PMVVY, pension is payable at the end of each period, during the policy term of 10 years, as per the frequency — monthly, quarterly, half-yearly or yearly — chosen by the pensioner at the time of purchase.

On survival of the pensioner at the end of the policy term of 10 years,the purchase price along with the final pension instalment will be payable, an official release said.

Loan up to 75 per cent of the purchase price will be allowed after three policy years (to meet the liquidity needs). Loan interest would be recovered from the pension instalments and loan to be recovered from claim proceeds, the release added.

Also, the scheme allows for premature exit for treatment of any critical terminal illness of self or spouse. On such premature exit, 98 per cent of the purchase price would be refunded. On death of the pensioner during the policy term of 10 years , the purchase price will be paid to the beneficiary.