Atal pension yojana (APY) is one of the highly acclaimed social security scheme launched by Govt of India during budget 2015. Out of many, APY is the only pension scheme to secure & provide a defined pension on retirement.
On 6th of May, Prime Minister, Shri Narendra Modi as a part of the Union Cabinet has approved the operation of all the three social security schemes Atal Pension Yojna (APY), Suraksha Bima Yojana (PMSBY) & Jeevan Jyoti Bima Yojana (PMJJBY).
The Cabinet also approved extend funding support to implement the Atal Pension Yojana scheme. Government will also provide Rs. 50 crore per annum for the next 5 years to PMJJBY and PMSBY as a contribution to create an awareness.
In this article we will discuss about atal pension yojana details and key highlights. One can read the official details in Hindi or English also. Let us check out all the 20 features of atal pension yojana here.
Atal Pension Yojana – Key Features
The name of this scheme was decided as per our former honorable PM Atal Bihari Vajpayee. Govt is trying to cover people in unorganized sector who are not going to get any pension in future. FM Arun Jaitley is stressing much for pension schemes during budget 2015 to improve social security after 60+ age for senior citizens. It could be a good scheme which will provide social security when someone retires.
1. Benefits of the Scheme: APY is a guaranteed pension scheme from Govt of India. Depending on the contribution level, this scheme will provide a fixed pension to the poor unorganized sector of people. The Atal Pension scheme will be focussed towards every India citizen under the National Pension System (NPS).
2. Migration from Swavalamban Scheme: If you have subscribed to Swavalamban Scheme, then you will be automatically migrated to atal pension yojana (APY).
If any subscriber beyond the age of 40 under Swavalamban scheme do not wish to continue can opt out of the scheme. They can either completely withdraw the entire amount, or to be eligible for annuities there under, may continue till the age of 60 years .
3. Eligibility: All Indian citizen within the given age limit is eligible to avail the APY scheme provided they have a savings bank account.
4. Age Limit: The entry age for this scheme will be 18-40 years. The pension will be started from the age of 60 years. That means min duration of contribution will be 20 years.
Pension Amount, Due Date & Payment Mode
5. Amount of Pension: Monthly pension amount will vary from 1000 – 5000 as per one’s contribution.
6. Changing Pension Amount: If the subscriber wants, he/she can opt to increase/decrease the pension amount as per the available monthly pension amounts. The switching option will be available once in a year during the month of April.
7. Due Date of Contribution: In Atal pension scheme, the due date for monthly contribution will be decided as per the initial date of deposit of the amount. After joining the scheme, the subscriber will receive an acknowledgement slip which will be the record for the due date of contribution, guaranteed pension amount, Permanent Retirement Account Number (PRAN) etc.
8. Payment Mode: The payment method for Atal Pension Yojana is also direct auto-debit like PM Suraksha Bima Yojana & PM Jeevan Jyoti Bima Yojana. To ensure that no penalty is levied, the subscriber must keep a track that sufficient balance is maintained in the account.
9. Contribution Period: The minimum period of contribution is 20 years & the maximum period of contribution is 42 years. The contribution period depends on the age of joining.
10. Where to Enrol: All points of presence (service providers) & aggregators under Swavlamban Scheme will enrol for the APY scheme by setting up National Pension System.
Atal pension yojana (APY) Contribution Level
11. Minimum Contribution Limit – As per the age of joining, the contribution amount will vary. The subscribers will start getting the pension from the age of 60 years. An 18 years old subscriber needs to contribute a minimum of Rs. 42 per month to get a monthly pension amount of Rs. 1,000. Similarly, for a 40 years old subscriber, minimum contribution amount is Rs. 291 per month.
12. Maximum Contribution Limit – If someone of age 40 years, started contributing for atal pension yojana (APY) scheme he/she has to pay a monthly contribution of 1454 for 20 years. After 20 years he/she will get guaranteed Rs 5000 / month pension.
You can see the exact calculation of contribution amount in the detailed article on Atal Pension Yojana Calculator.
13. Nomination Facility: Nomination is mandatory under APY scheme. One needs to provide nominee details while opening the account. Also wherever applicable the spouse details with Aadhaar card no. should be provided.
Govt. Contribution & Operational Authority
14. Contribution by Government – Govt. will also co-contribute 50% of the subscriber’s contribution or Rs 1,000 per annum, whichever is lower. This facility will be provided to people who open atal pension yojana (APY) before December 31st, 2015. The Government will co-contribute to the eligible Permanent Retirement Account Number (PRAN) holders by PFRDA after receiving the confirmation from Central Record Keeping Agency.
To encourage people to join the APY scheme, Govt. will also reimburse the promotional and development activities including incentive to the agencies who will collect the contribution amount.
15. Operational Authority: APY is a Government of India Scheme. It will be administered by PFRDA (Pension Fund Regulatory and Development Authority). PFRDA will originate the account opening form along with the offer document of this scheme.
Penalty for Default & False Declaration
16. False Declaration: While opening the account, if any false declaration is made about the person’s eligibility, entire government contribution along with the penal interest will be forfeited.
17. Penalty for Default: Penalty will be levied for defaulters. The account may get foreclosed in case of repeated defaults for a specified period. Govt. co-contributions will also be forfeited.
For any delayed payments, the respective banks need to collect the additional amount. Below is the different variations per month for this amount:
- Rs. 1 for contribution upto Rs. 100 per month
- Rs. 2 for contribution upto Rs. 101 to 500/- per month
- Rs. 5 for contribution between Rs 501/- to 1000/- per month
- Rs. 10 for contribution beyond Rs 1001/- per month.
18. Discontinuation Effect: If discontinuation of payment happens for a specified period of time, it may lead to even closure of the account. The other effects of non-contribution of amount are:
- After 6 months – Account will be frozen
- After 12 months – Account will be deactivated
- After 24 months – Account will be closed
Other Details of APY
19. Information Alert: While making the subscription, one needs to provide his/her mobile no. So the subscriber will receive periodical information on the auto-debit of the account, balance amount, contribution credits etc. through SMS alerts.
20. Exit Atal pension yojana:
After completion of 60 years: To draw the guaranteed monthly pension, the subscriber needs to submit the request to the respective bank. In case of unfortunate death of the subscriber, spouse will receive the amount.
Exit before 60 years: Exit before the age of 60 years is not permitted. Exceptions can happen only in extreme situations like in the event of the death of beneficiary or terminal disease.
Do you think Rs 5000 per month will be enough after 20 years? Forget about being enough, I am not sure how much value Rs 5000 will have by that time. In that case how atal pension yojana (APY) will secure our society by providing pension? But definitely it is a stepping stone towards the social security of the unorganised sector. Anyway we have to wait to know more about this scheme in coming days.