Atal Pension Yojana | APY
Atal Pension Yojana, APY The government of India is concerned about the old age income security of the working poor and is focused on encouraging and enabling them to save for their retirement. To address the longevity risks among the workers in unorganized sector and to encourage the workers in unorganized sector to voluntarily save for their retirement.
The GoI has, therefore, Announced a new scheme called Atal Pension Yojana (APY) in the Financial Year 2015-16 budget. The APY is focussed on all citizens in the unorganized sector.
HIGHLIGHTS OF ATAL PENSION YOJANA
- Atal Pension Yojana (APY) is being implemented through the APY Service Providers comprising of Public Sector Banks (PSBs), Private Sector Banks, Regional Rural Banks (RRBs), Cooperative Banks & Department of Post both in urban and rural areas across the country.
- Total no. of subscribers registered under APY as on 12th April 2018 has crossed 97.60 lakhs. APY provides for a co-contribution from Govt of India for those who have registered before 31st March 2016 with an amount of 50% of subscribers contribution up-to a maximum of Rs.1000/-.
- These subscribers will be eligible for co-contribution for a period 5 years from 2015-16 to 2019-20 only those subscribers who are not income taxpayers and not part of any other social security schemes are eligible for GoI co-contribution.
- Accordingly, GoI through PFRDA has released co-contribution for the FY 2016-17 for nearly 14 lacs eligible subscribers amounting to Rs. 120.92 crores. The Subscribers who have any pending contributions in their APY account till March 2017 won’t be paid with co-contribution.
- They have been advised by PFRDA to regularize their APY account so as to get GoI co-contribution. GoI co-contribution is payable only when accounts are regular and the admissible GoI co-contribution is paid into the Savings Bank account of the Subscribers.
- Atal Pension Yojana provides the minimum guaranteed pension ranging between Rs. 1000/- to Rs. 5000/- per month for the subscriber from the age of 60 years.
- All bank account holders may join APY.
Eligibility
• APY is applicable to all citizen of India aged between 18-40 years.
• Aadhaar will be the primary KYC. Aadhar and mobile number are recommended to be obtained from subscribers for the ease of operation of the scheme. If not available at the time of registration, Aadhar details may also be submitted later stage.
Atal Pension Yojna
Contribution
Indicative APY Contribution Chart (Agewise)
| Age of Entry | Years of Contribution |
Monthly pension of Rs. 1000. | Monthly pension of Rs. 2000. |
Monthly pension of Rs. 3000. |
Monthly pension of Rs. 4000. |
Monthly pension of Rs. 5000. |
| 18 | 42 | 42 | 84 | 126 | 168 | 210 |
| 19 | 41 | 46 | 92 | 138 | 183 | 228 |
| 20 | 40 | 50 | 100 | 150 | 198 | 248 |
| 21 | 39 | 54 | 108 | 162 | 215 | 269 |
| 22 | 38 | 59 | 117 | 177 | 234 | 292 |
| 23 | 37 | 64 | 127 | 192 | 254 | 318 |
| 24 | 36 | 70 | 139 | 208 | 277 | 346 |
| 25 | 35 | 76 | 151 | 226 | 301 | 376 |
| 26 | 34 | 82 | 164 | 246 | 327 | 409 |
| 27 | 33 | 90 | 178 | 268 | 356 | 446 |
| 28 | 32 | 97 | 194 | 292 | 388 | 485 |
| 29 | 31 | 106 | 212 | 318 | 423 | 529 |
| 30 | 30 | 116 | 231 | 347 | 462 | 577 |
| 31 | 29 | 126 | 252 | 379 | 504 | 630 |
| 32 | 28 | 138 | 276 | 414 | 551 | 689 |
| 33 | 27 | 151 | 302 | 453 | 602 | 752 |
| 34 | 26 | 165 | 330 | 495 | 659 | 824 |
| 35 | 25 | 181 | 362 | 543 | 722 | 902 |
| 36 | 24 | 198 | 396 | 594 | 792 | 990 |
| 37 | 23 | 218 | 436 | 654 | 870 | 1,087 |
| 38 | 22 | 240 | 480 | 720 | 957 | 1,196 |
| 39 | 21 | 264 | 528 | 792 | 1,054 | 1,318 |
| 40 | 20 | 291 | 582 | 873 | 1,164 | 1,454 |
Atal Pension Yojana
Charges for default
Banks are required to collect the additional amount for delayed payments, such amount will vary from minimum Re 1 per month to Rs 10/- per month as shown below:
• Re. 1 per month for the contribution up to Rs. 100 per month.
• Re. 2 per month for the contribution up to Rs. 101 to 500/- per month.
• Re 5 per month for the contribution between Rs 501/- to 1000/- per month.
• Rs 10 per month for the contribution beyond Rs 1001/- per month.
Atal Pension Yojna
Important information for the subscriber:
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.
Subscriber should ensure that the Bank account to be funded enough for auto debit of the contribution amount.
Atal Pension Yojana
Exit :
On attaining the age of 60 years:
The exit from APY is permitted at the age with 100% annuitisation of pension wealth. On exit, the pension would be
available to the subscriber.
In case of death of the Subscriber due to any cause:
In case of death of subscriber pension would be available to the spouse and on the death of both of them (subscriber and spouse), the pension corpus would be returned to his nominee.
Exit Before the age of 60 Years:
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 the beneficiary or terminal disease.
Frequently Asked Questions – Atal Pension Yojana
1. What is pension? Why do I need it?
A Pension provides people with a monthly income when they are no longer earning.
Need for Pension:
Decreased income earning potential with age.
The rise of nuclear family-Migration of earning members.
Rise in cost of living.
Increased longevity.
Assured monthly income ensures dignified life in old age.
2. What is Atal Pension Yojana?
Atal Pension Yojana (APY), a pension scheme for citizens of India, is focused on the unorganised sector workers. Under the APY, guaranteed minimum pension of Rs. 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will be given at the age of 60 years depending on the contributions by the subscribers.
3. Who can subscribe to APY?
Any Citizen of India can join APY scheme. The following are the eligibility criteria:-
(i) The age of the subscriber should be between 18 – 40 years.
(ii) He / She should have a savings bank account/ post office savings bank account.
The prospective applicant may provide Aadhaar and mobile number to the bank during registration to facilitate receipt of periodic updates on APY account. However, Aadhaar is not mandatory for enrolment.
4. For how many Years Government will co-contribute?
The co-contribution of the Government of India is available for 5 years, i.e., from the Financial Year 2015-16 to 2019-20 for the subscribers, who join the scheme during the period from 1st June, 2015 to 31st March, 2016 and who are not covered by any Statutory Social Security Scheme and are not income tax payers. The Government cocontribution is payable to eligible Permanent Retirement Account Number (PRANs) by the Pension Fund regulatory and Development Authority (PFRDA) after receiving the confirmation from Central Record Keeping Agency to the effect that the subscriber has paid all the installments for the year Government co-contribution will be credited in subscriber’s savings bank account/ post office savings bank account 50% of the total contribution subject to a maximum of Rs 1000/- at the end of financial year .
5. Who are the other social security schemes beneficiaries not eligible to receive Government co-contribution under APY?
The beneficiaries, who are covered under statutory social security schemes, are not eligible to receive Government co-contribution under APY. For example, members of the Social Security Schemes under the following enactments would not be eligible to receive Government co-contribution under APY:
(i) Employees’ Provident Fund and Miscellaneous Provision Act, 1952.
(ii) The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
(iii) Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
(iv) Seamens’ Provident Fund Act, 1966.
(v) Jammu Kashmir Employees’ Provident Fund and Miscellaneous Provision Act, 1961.
(vi) Any other statutory social security scheme.
6. How much pension will be received under APY?
Minimum guaranteed monthly pension of Rs 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will be given from the age of 60 years onwards depending on the contributions by the subscribers.
7. What is the benefit in joining APY scheme?
The benefit of minimum pension under Atal Pension Yojana would be guaranteed by the Government in the sense that if the actual realised returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, over the period of contribution, such shortfall shall be funded by the Government. On the other hand, if the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscriber’s account, resulting in enhanced scheme benefits to the subscribers. The Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber, who joins the scheme during the period 1st June, 2015 to 31st March, 2016 and who is not a beneficiary of any social security scheme and is not an income tax payer. The Government co-contribution will be given for 5 years from the Financial Year 2015-16 to 2019-20. At present, a subscriber under the National Pension System (NPS) is eligible to get tax benefit for the contribution, upto a ceiling, and even for the investment returns on such contributions. Further, the purchase price of the annuity on exit from NPS is also not taxed and only the pension income of the subscribers are considered to be part
of normal income and taxed at the appropriate marginal rate of tax, applicable to the subscriber. It is proposed that a similar tax treatment may be given to the subscribers of APY. However, presently, a similar tax ispensation, on par with that available under NPS, is yet to be accorded to subscribers under APY.
8. How the contributions are invested in APY?
The contributions under APY are invested as per the investment guidelines prescribed by PFRDA for Central Government / State Government / NPS-Lite / Swavalamban Scheme / APY.
9. What is the procedure for opening APY Account?
(i) Approach the bank branch/post office where individual’s savings bank account is held or open a savings account if the subscriber doesn’t have one.
(ii) Provide the Bank A/c number/ Post office savings bank account number and with the help of the Bank staff, fill up the APY registration form.
(iii) Provide Aadhaar / Mobile Number. This is not mandatory, but may be provided to facilitate the communication regarding contribution.
(iv) Ensure keeping the required balance in the savings bank account/ post office savings bank account for transfer of monthly / quarterly /half yearly contribution.
10. Whether Aadhaar Number is compulsory for joining the scheme?
It is not mandatory to provide Aadhaar number for opening APY account. It is however desirable to provide Aadhaar Number for proper identification of the subscriber.
11. Can I open APY Account without savings bank account?
The savings bank account/ post office savings bank account is mandatory for joining APY.
12. What is the mode of contribution to the account?
The contributions can be made at monthly / quarterly / half yearly intervals through auto debit facility from savings bank account/ post office savings bank account of the subscriber.
13. How much to contribute towards APY?
The monthly / quarterly/half yearly contribution depends upon the intended / desired monthly pension and the age of subscriber at entry. The details may be referred to in Annex I.
14. What is the due date for contribution?
The contribution may be paid to APY through savings bank account/ post office savings bank account on any date of the particular month, in case of monthly contributions or any day of the first month of the quarter, in case of quarterly contributions or any day of the first month of the half year, in case of half-yearly contributions.
15. What will happen if required or sufficient amount is not maintained in the savings bank account for contribution on the due date?
The subscribers should keep the required balance in their savings bank accounts/ post office savings bank account on the stipulated due dates to avoid any overdue interest for delayed contributions. The monthly / quarterly / half-yearly contribution may be deposited on the first date of month / quarter / half year in the savings bank account/ post office savings bank account . However, if there is inadequate balance in the saving bank account/ post office savings bank account of the subscriber till the last date of the month / last date of the first month in a quarter / last day of the first month in a half year, it will be treated as a default and contribution will have to be paid in the subsequent month along with overdue interest for delayed contributions. Banks are required to collect Rs. 1 per month for contribution of every Rs. 100, or part thereof, for each delayed monthly contributions.
Overdue interest for delayed contribution for quarterly / half yearly mode of contribution shall be recovered accordingly. The overdue interest amount collected will remain as part of the pension corpus of the subscriber.
More than one monthly / quarterly / half yearly contribution can be recovered subject to availability of the funds. In all cases, the contribution is to be recovered along with the overdue charges if any. This will be bank’s internal process. The due amount will be recovered as and when funds are available in the account.
16. What will happen to APY account in case of continuous default?
Deduction would be made in the subscribers account for account maintenance charges and other related charges on a periodic basis. Once the account balance in the subscriber’s account becomes zero due to deduction of account maintenance charges,fees and overdue interest, the account would be closed immediately. For those subscribers, who have availed Government co-contribution, the account would be treated as becoming zero when the subscriber corpus minus the Government cocontribution would be equal to the account maintenance charges, fees and overdue interest and hence the net corpus becomes zero. In this case, the Government cocontribution would be given back to the Government.
17. Is it required to furnish nomination while joining the scheme?
Yes. It is mandatory to provide nominee details in APY account. If the subscriber is married, the spouse will be the default nominee. Unmarried subscribers can nominate any other person as nominee & they have to provide spouse details after marriage. The Aadhaar details of spouse and nominees may be provided.
18. How many APY accounts I can open?
A subscriber can open only one APY account and it is unique. Multiple accounts are not permitted.
19. Will there be any option to increase or decrease the monthly contribution for higher or lower pension amount?
The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, once a year. However, the switching option shall be available once in year during the month of April.
20. What is the withdrawal procedure from APY?
A. On attaining the age of 60 years:
Upon completion of 60 years, the subscribers will submit the request to the associated bank for drawing the guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher than the guaranteed returns embedded in APY. The same amount of monthly pension is payable to spouse (default nominee) upon death of
subscriber. Nominee will be eligible for return of pension wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.
B. In case of death of the subscriber due to any cause after the age of 60 years:
In case of death of subscriber, pension would be available to the spouse and on the death of both of them (subscriber and spouse), the pension wealth accumulated till age 60 of the subscriber would be returned to the nominee.
C. Exit before the age of 60 Years:
Exit before 60 years of age is generally not permitted, it may be permitted by PFRDAonly in exceptional circumstances, i.e., in the event of the death of the beneficiary or terminal disease etc., in-line with the provisions for pre-mature exit under NPS.
In case a subscriber, who has availed Government co-contribution under APY, chooses to voluntarily exit APY at a future date, he shall only be refunded the contributions made by him to APY, along with the net actual accrued income earned on his contributions (after deducting the account maintenance charges). The Government co-contribution, and the accrued income earned on the Government co-contribution shall not be returned to such subscribers.
D. Death of subscriber before 60 years:
The entire accumulated corpus under APY will be returned to the spouse/nominee. However, pension shall not be payable to the spouse/nominee.
21. How will I know the status of my contribution?
The periodical information to the subscribers regarding activation of PRAN, balance in the account, contribution credits etc. will be intimated to APY subscribers by way of SMS alerts. The subscriber will also be receiving physical Statement of Account once a year.
22. Will I get any statement of transactions?
The physical statement of APY account will be provided to the subscribers annually.
23. If I move my residence/city, how can I make contributions to APY account?
The contributions may be remitted through auto debit uninterruptedly even in case of change of residence/location.
24. What will happen if a subscriber becomes non-citizen of the country?
The scheme is open to the Indian citizens only. Hence, in that event, the APY account will be closed and contribution will be returned to the subscriber as mentioned above in the case of voluntary exit before the age of 60 years.
25. What will happen to the existing subscribers in NPS-Lite / Swavalamban Yojana?
(A) Subscriber between the age group of 18 and 40:
The subscriber would be automatically migrated to Atal Pension Yojana with an option to opt out. The associated aggregator will facilitate those subscribers for completing the process of migration. The subscribers may also approach the nearest authorised bank branch/post office for shifting their Swavalamban account into APY with PRAN details.
The benefit of co-contribution of the Government of India for those subscribers of Swavalamban Scheme who have migrated to APY would not exceed 5 years under both the Schemes. For example, if a Swavalamban beneficiary has received the benefit of Government co-contribution for 1 year, then the Government co-contribution to that
subscriber under APY, after migration from the Swavalamban Scheme, would be available only for 4 years, and so on.
The existing Swavalamban beneficiary opting out from the proposed automatic migration to APY will be given Government co-contribution upto 2016-17, if he is eligible, and the NPS Swavalamban would continue till such people attained the age of exit under that scheme.
The accumulated corpus of existing Swavalamban subscriber between the age group of 18 and 40 years, who get migrated to APY will be kept under the same PRAN and remain as an additional wealth of the subscriber till the time of exit. This additional amount may be given to the subscriber as enhanced pension benefit or as lump-sum withdrawal, as the case may be. The contribution of such subscribers under APY, after migration from the Swavalamban Scheme to APY, would be as per the amount mentioned in the Annex –I, depending on the pension amount selected and the age of the subscriber.
(B) Subscriber above 40 years of age:
The subscribers under the Swavalamban Scheme, who are beyond the age of 40 and who do not wish to continue under the Scheme, may opt out by complete withdrawal of entire amount in lump sum, or may prefer to continue till the age of 60 years, to be eligible for annuities thereunder.
26. If I am an existing subscriber of APY, can I change my monthly auto debit facility to Quarterly or Half Yearly as per my convenience?
Yes, the subscriber can change the mode (monthly/ quarterly/half yearly) of auto debit facility once in a year during the month of April
27. If I have completed 40 years, can I join Atal Pension Yojana?
No, a person who is in age group of 18 years to 39 years 364 days can join Atal Pension Yojana.
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