Details of Atal Pension Yojana (APY) Scheme

The Atal Pen­sion Yojana (APY) would be intro­duced from 1st June, 2015.

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 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.

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.

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. 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

Month­ly  Pension to the sub­scribers and   his   spouse

Indica­tive Return of Cor­pus      to      the nom­i­nee    of    the

		Rs.)	(in Rs.)	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