When the Senior Citizens Savings Scheme (SCSS) was launched in August 2004, one of investors' major grouse was the stiff eligibility norm. Only citizens above the age of 60 years were permitted to invest in the scheme, implying that a vast section of investors within the senior citizens segment were left out. Also some provisions in the scheme were far from comprehensible. Subsequently the Ministry of Finance came up with a set of clarifications on the scheme's provisions. We present some of the significant modifications in the SCSS and what they entail for investors,

Who can invest?
Earlier investors between the 55-60 age bracket were permitted to invest in the scheme if they were retirees; also they were required to get invested in the scheme within 3 months from the date of retirement. Thereby a large number of investors were prevented from participating in the scheme.

The amendments have done away with the "get invested within 3 months criteria"; hence individuals between 55-60 years of age who have retired on superannuation or otherwise have been made eligible to subscribe to the scheme. Also these investors can invest either Rs 1,500,000 or retirement benefits received by them, whichever is lower.

[The above statement was based on our interpretation of a notification issued by the Ministry of Finance. However subsequent clarifications suggest that the given facility had been granted only for a limited time period. Presently retirees (between 55-60 years of age) are required to make investments within 1 month of the date of receipt of retirement benefits. – January 2005]
 

However this should not be construed as a reduction in the eligible age from 60 years to 55 years. The flexibility has only been granted to retirees, 60 years continues to be the minimum age for other investors.
 

• The SCSS in its earlier "avatar"
   

  Joint holding
  Joint accounts under the scheme can be operated by individuals only with their spouses. Also both the spouses are permitted to get invested in their individual capacities, subject to all eligibility criterions being satisfied. The scheme's earlier version provided that an eligible joint holder could continue to operate the account on the first holder's death.

  The new provisions clarify that if both the both the spouses have opened separate accounts, and either of the spouses dies during its tenure, the account(s) standing in the name of the deceased spouse will be discontinued and proceeds remitted to the joint holder.
   

• 5 steps to retirement planning
   

  Transfer of account
  Investors are permitted to transfer their accounts from one post-office to another; however this transfer will now come at a price. Where the amount invested is Rs 100,000 or more, a transfer fee of Rs 5 per Rs 100,000 invested will be charged.

  What does this mean for investors?
  The amendments should bring relief to a lot of retirees within the senior citizens segment who had been left outside the purview of the SCSS. At a time when there is a serious dearth of investment options for senior citizens, most investors can ill afford to miss out on the opportunity to invest in the SCSS. Also the clarifications on the mode of operation for joint accounts will help investors manage their investments better.

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