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
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.
Benefit of APY
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.
Eligibility for APY
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 between the period 1st June,
2015 and 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.
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.
Age of joining and contribution period
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.
Focus of APY
Mainly targeted at unorganised sector workers.
Enrolment and Subscriber Payment
All bank account holders under the eligible category may join APY with autodebit
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.
click here for scheme details.