Atal Pension Yojana

Atal Pension Yojana

  1. Benefits of APY
  2. Eligibility for APY
  3. Age of joining and contribution period
  4. Focus of APY
  5. Enrollment and Subscriber Payment
  6. Enrollment agencies
  7. Operational Framework of APY
  8. Funding of APY
  9. Status

Introduction

  • Atal Pension Yojana (APY) addresses the old age income security of the working poor and the longevity risks among the workers in unorganised sector.
  • It encourages the workers in unorganised sector to voluntarily save for their retirement.
  • The Government had launched the scheme with effect from 1st June, 2015.
  • The scheme replaces the Swavalamban Yojana / NPS Lite scheme.

About APY:

The Atal Pension Yojana became operational from June 1, 2015 and is available to all the citizens of India in the age group of 18-40 years.

Features:

  • Under the scheme, a subscriber would receive a minimum guaranteed pension of Rs 1,000 to Rs 5,000 per month, depending upon his contribution, from the age of 60 years.
  • The same pension would be paid to the spouse of the subscriber and on the demise of both the subscriber and the spouse, the accumulated pension wealth is returned to the nominee.
  • The Central Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, that is, from 2015-16 to 2019-20, to those who join the NPS before 31st December, 2015 and who are not members of any statutory social security scheme and who are not Income Tax payers.

Benefits of APY

  • Fixed pension for the subscribers ranging between Rs.1000 to Rs. 5000, if s/he joins and contributes between the age of 18 years and 40 years.
  • The contribution levels would vary and would be low if subscriber joins early and increase if s/he joins late.
  • The same pension is payable to Spouse after death of Subscriber.
  • Return of indicative pension wealth to nominees after death of spouse.
  • Contributions to the Atal Pension Yojana (APY) is eligible for tax benefits similar to the National Pension System (NPS).
  • The tax benefits include the additional deduction of Rs 50,000 under section 80CCD(1).

Eligibility for APY

  • Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme.
  • Any individual who is eligible to receive benefits under the APY will have to furnish proof of possession of Aadhaar number or undergo enrolment under Aadhaar authentication.
  • An APY subscriber will have to get the Aadhaar number recorded in his or her APY pension account and also in his/ her savings account where the periodic pension contribution instalments are debited and government co-contribution is to be credited.

Age of joining and contribution period

  • The minimum age of joining APY is 18 years and maximum age is 40 years.
  • Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Focus of APY

Mainly targeted at unorganised sector workers.

Enrollment and Subscriber Payment

All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.

Enrollment agencies

All Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enroll subscribers through architecture of National Pension System.

Operational Framework of APY

  • It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority.
  • The Institutional Architecture of NPS would be utilised to enroll subscribers under APY.

Funding of APY

  • Government would provide
  • fixed pension guarantee for the subscribers;
  • Under the APY, the Central Government’s co-contribution of 50% of the subscriber’s contribution upto Rs. 1000 per annum, was available to each eligible subscriber, for a period of 5 years, i.e. from 2015-16 to 2019-20, who join APY before 31st March, 2016 and who is not a beneficiary of any social security scheme and is not an income tax payer.
  • Government would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.
  • Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the nominee of subscribers
  • The Table of contribution levels, fixed monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below.
  • For example, to get a fixed monthly pension between Rs. 1,000 per month and Rs. 5,000 per month, the subscriber has to contribute on monthly basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years.
  • For the same fixed pension levels, the contribution would range between Rs. 291 and Rs. 1,454, if the subscriber joins at the age of 40 years.

Status

  • Atal Pension Yojana has added over 1 crore subscribers since its launch in May 2015, the Pension Fund Regulatory and Development Authority (PFRDA) said recently.
  • Atal Pension Yojana (APY) was launched in May 2015 and current number of subscriber stands at 1.10 crore.