Atal
Pension Yojana (APY)1 – Details of the Scheme
1.
Introduction
1.1
The Government of India is extremely concerned about the old age income
security of the working poor and is focused on encouraging and enabling them to
join the National Pension System (NPS). To address the longevity risks among
the workers in unorganised sector and to encourage the workers in unorganised
sector to voluntarily save for their retirement, who constitute 88% of the
total labour force of 47.29 crore as per the 66th Round of NSSO Survey of
2011-12, but do not have any formal pension provision, the Government had
started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban
Scheme is inadequate mainly due to lack of guaranteed pension benefits at the
age of 60.
1.2
The Government announced the introduction of universal social security schemes
in the Insurance and Pension sectors for all Indians, specially the poor and
the under-privileged, in the Budget for the year 2015-16. Therefore, it has
been announced that the Government will launch the Atal Pension Yojana (APY),
which will provide a defined pension, depending on the contribution, and its
period. The APY will be focussed on all citizens in the unorganised sector, who
join the National Pension System (NPS) administered by the Pension Fund
Regulatory and Development Authority (PFRDA). Under the APY, the subscribers
would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2000 per
month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age
of 60 years, depending on their contributions, which itself would be based on
the age of joining the APY. The minimum age of joining APY is 18 years and
maximum age is 40 years. Therefore, minimum period of contribution by any
subscriber under APY would be 20 years or more. The benefit of fixed minimum
pension would be guaranteed by the Government. The APY would be introduced from
1st June, 2015.
2.
Benefit of APY
2.1
Fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if 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 he
joins late.
3.
Eligibility for APY
3.1
Atal Pension Yojana (APY) is open to all bank account holders. 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, i.e., from Financial Year 2015-16 to 2019-20, 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. However the scheme will
continue after this date but Government Co-contribution will not be available.
3.2
The Government co-contribution is payable to eligible PRANs by PFRDA after
receiving the confirmation from Central Record Keeping Agency at such
periodicity as may be decided by PFRDA.
4.
Age of joining and contribution period
4.1
The minimum age of joining APY is 18 years and maximum age is 40 years. The age
of exit and start of pension would be 60 years. Therefore, minimum period of
contribution by the subscriber under APY would be 20 years or more.
5.
Focus of APY
5.1
Mainly targeted at unorganised sector workers.
6.
Enrolment and Subscriber Payment
6.1
All bank account holders under the eligible category may join APY with
auto-debit facility to accounts, leading to reduction in contribution
collection charges. The subscribers should keep the required balance in their
savings bank accounts on the stipulated due dates to avoid any late payment
penalty. Due dates for monthly contribution payment is arrived based on the
deposit of first contribution amount. In case of repeated defaults for
specified period, the account is liable for foreclosure and the GoI
co-contributions, if any shall be forfeited. Also any false declaration about
his/her eligibility for benefits under this scheme for whatsoever reason, the
entire government contribution shall be forfeited along with the penal
interest. For enrolment, Aadhaar would be the primary KYC document for
identification of beneficiaries, spouse and nominees to avoid pension rights
and entitlement related disputes in the long-term. The subscribers are required
to opt for a monthly pension from Rs. 1000 - Rs. 5000 and ensure payment of
stipulated monthly contribution regularly. The subscribers can opt to decrease
or increase pension amount during the course of accumulation phase, as per the
available monthly pension amounts. However, the switching option shall be
provided once in year during the month of April. Each subscriber will be
provided with an acknowledgement slip after joining APY which would invariably
record the guaranteed pension amount, due date of contribution payment, PRAN
etc.
7.
Enrolment agencies
7.1
All Points of Presence (Service Providers) and Aggregators under Swavalamban
Scheme would enrol subscribers through architecture of National Pension System.
The banks, as POP or aggregators, may employ BCs/Existing non - banking
aggregators, micro insurance agents, and mutual fund agents as enablers for
operational activities. The banks may share the incentives received by them
from PFRDA/Government, as deemed appropriate.
8.
Operational Framework of APY
8.1
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 enrol subscribers under APY. The offer document of APY
including the account opening form would be formulated by PFRDA.
9.
Funding of APY
9.1
Government would provide (i) fixed pension guarantee for the subscribers; (ii)
would co-contribute 50% of the total contribution or Rs. 1000 per annum,
whichever is lower, to eligible subscribers; and (iii) would also reimburse the
promotional and development activities including incentive to the contribution
collection agencies to encourage people to join the APY.
10.
Migration of existing subscribers of Swavalamban Scheme to APY
10.1
The existing Swavalamban subscriber, if eligible, may be automatically migrated
to APY with an option to opt out. However, the benefit of five years of
government Co-contribution under APY would not exceed 5 years for all
subscribers. This would imply that if, as a Swavalamban beneficiary, he has
received the benefit of government Co-Contribution of 1 year, then the
Government co-contribution under APY would be available only 4 years and so on.
Existing Swavalamban beneficiaries opting out from the proposed APY will be
given Government co-contribution till 2016-17, if eligible, and the NPS Swavalamban
continued till such people attained the age of exit under that scheme.
10.2
The existing Swavalamban subscribers between 18-40 years will be automatically
migrated to APY. For seamless migration to the new scheme, the associated
aggregator will facilitate those subscribers for completing the process of
migration. Those subscribers may also approach the nearest authorised bank
branch for shifting their Swavalamban account into APY with PRAN details.
10.3
The Swavalamban subscribers who are beyond the age of 40 and do not wish to
continue may opt out the Swavalamban scheme by complete withdrawal of entire
amount in lump sum, or may prefer to continue till 60 years to be eligible for
annuities there under.
11.
Penalty for default
11.1
Under APY, the individual subscribers shall have an option to make the
contribution on a monthly basis. Banks are required to collect additional
amount for delayed payments, such amount will vary from minimum Rs. 1 per month
to Rs 10/- per month as shown below:
Rs. 1 per month for contribution upto Rs. 100 per
month.
Rs. 2 per month for contribution upto Rs. 101 to
500/- per month.
Rs. 5 per month for contribution between Rs 501/- to
1000/- per month.
Rs. 10 per month for contribution beyond Rs 1001/- per month.
The
fixed amount of interest/penalty will remain as part of the pension corpus of
the subscriber.
11.2
Discontinuation of payments of contribution amount shall lead to following:
After 6 months account will be frozen.
After 12 months account will be deactivated.
After 24 months account will be closed.
12.
Operation of additional amount for delayed payments
12.1
APY module will raise demand on the due date and continue to raise demand till
the amount is recovered from the subscriber’s account.
12.2
The due date for recovery of monthly contribution may be treated as the first
day /or any other day during the calendar month for each subscriber. Bank can
recover amount any day till the last day of the month. It will imply that
contribution are recovered as and when funds are available any point during the
month.
12.3
Monthly contribution will be recovered on FIFO basis- earliest due instalment
will recovered first along with the fixed amount of charges as mentioned above.
12.4
More than one monthly contribution can be recovered in month subject to
availability of the funds. Monthly contribution will be recovered along with
the monthly fixed due amount, if any. In all cases, the contribution is to be
recovered along with the fixed charges. This will be banks’ internal process.
The due amount will be recovered as and when funds are available in the
account.
13.
Investment of the contributions under APY
13.1
The amount collected under APY are managed by Pension Funds appointed by PFRDA
as per the investment pattern specified by the Government. The subscriber has
no option to choose either the investment pattern or Pension Fund.
14.
Continuous Information Alerts to Subscribers
14.1
Periodical information to the subscribers regarding balance in the account,
contribution credits etc. will be intimated to APY subscribers by way of SMS
alerts. The subscribers will have the option to change the non – financial
details like nominee’s name, address, phone number etc whenever required.
14.2
All subscribers under APY remain connected on their mobile so that timely SMS
alerts can be provided to them at the time of making their subscription,
auto-debit of their accounts and the balance in their accounts.
15.
Exit and pension payment
15.1
Upon completion of 60 years, the subscribers will submit the request to the
associated bank for drawing the guaranteed monthly pension.
15.2
Exit before 60 years of age is not permitted, however, it is permitted only in
exceptional circumstances, i.e., in the event of the death of beneficiary or
terminal disease.
16.
Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus
to the nominee of subscribers
16.1
The Table of contribution levels, fixed minimum 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.
Table
of contribution levels, fixed monthly pension of Rs. 1,000 per month to
subscribers and his spouse and return of corpus to nominees of subscribers and
the contribution period under Atal Pension Yojana
|
Age of Joining
|
Years of
Contribution
|
Indicative
Monthly Contribution
(in Rs.)
|
Monthly
Pension to the subscribers and his spouse (in Rs.)
|
Indicative
Return of Corpus to the nominee of the subscribers (in Rs.)
|
|
18
|
42
|
42
|
1,000
|
1.7 Lakh
|
|
20
|
40
|
50
|
1,000
|
1.7 Lakh
|
|
25
|
35
|
76
|
1,000
|
1.7 Lakh
|
|
30
|
30
|
116
|
1,000
|
1.7 Lakh
|
|
35
|
25
|
181
|
1,000
|
1.7 Lakh
|
|
40
|
20
|
291
|
1,000
|
1.7 Lakh
|
Table of contribution
levels, fixed monthly pension of Rs. 2,000 per month to subscribers and his
spouse and return of corpus to nominees of subscribers and the contribution
period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution
(in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.)
|
Indicative Return of Corpus to the nominee of the
subscribers (in Rs.)
|
|
18
|
42
|
84
|
2,000
|
3.4 lakh
|
|
20
|
40
|
100
|
2,000
|
3.4 lakh
|
|
25
|
35
|
151
|
2,000
|
3.4 lakh
|
|
30
|
30
|
231
|
2,000
|
3.4 lakh
|
|
35
|
25
|
362
|
2,000
|
3.4 lakh
|
|
40
|
20
|
582
|
2,000
|
3.4 lakh
|
Table of contribution
levels, fixed monthly pension of Rs. 3,000 per month to subscribers and his
spouse and return of corpus to nominees of subscribers and the contribution
period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution
(in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.)
|
Indicative Return of Corpus to the nominee of the
subscribers (in Rs.)
|
|
18
|
42
|
126
|
3,000
|
5.1 Lakh
|
|
20
|
40
|
150
|
3,000
|
5.1 Lakh
|
|
25
|
35
|
226
|
3,000
|
5.1 Lakh
|
|
30
|
30
|
347
|
3,000
|
5.1 Lakh
|
|
35
|
25
|
543
|
3,000
|
5.1 Lakh
|
|
40
|
20
|
873
|
3,000
|
5.1 Lakh
|
Table of contribution
levels, fixed monthly pension of Rs. 4,000 per month to subscribers and his
spouse and return of corpus to nominees of subscribers and the contribution
period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.)
|
Indicative Return of Corpus to the nominee of the
subscribers (in Rs.)
|
|
18
|
42
|
168
|
4,000
|
6.8 Lakh
|
|
20
|
40
|
198
|
4,000
|
6.8 Lakh
|
|
25
|
35
|
301
|
4,000
|
6.8 Lakh
|
|
30
|
30
|
462
|
4,000
|
6.8 Lakh
|
|
35
|
25
|
722
|
4,000
|
6.8 Lakh
|
|
40
|
20
|
1164
|
4,000
|
6.8 Lakh
|
Table of contribution
levels, fixed monthly pension of Rs. 5,000 per month to subscribers and his
spouse and return of corpus to nominees of subscribers and the contribution
period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.)
|
Indicative Return of Corpus to the nominee of the
subscribers (in Rs.)
|
|
18
|
42
|
210
|
5,000
|
8.5 Lakh
|
|
20
|
40
|
248
|
5,000
|
8.5 Lakh
|
|
25
|
35
|
376
|
5,000
|
8.5 Lakh
|
|
30
|
30
|
577
|
5,000
|
8.5 Lakh
|
|
35
|
25
|
902
|
5,000
|
8.5 Lakh
|
|
40
|
20
|
1,454
|
5,000
|
8.5 Lakh
|
