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 clarity of pension
benefits at the age after 60.
2. The
Finance Minister has, therefore, announced a new initiative called Atal Pension
Yojana (APY) in his Budget Speech for 2015-16. 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)
and who are not members of any statutory social security scheme. Under the APY,
the subscribers would receive the fixed 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 vary
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 the
subscriber under APY would be 20 years or more. The benefit of fixed pension
would be guaranteed by the Government. The Central Government would also
co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum,
whichever is lower, to each eligible subscriber account, for a period of 5
years, i.e., from 2015-16 to 2019-20, who join the NPS before 31st
December, 2015 and who are not income tax payers. The APY would be launched
from 1st June, 2015. The existing subscribers of Swavalamban Scheme
would be automatically migrated to APY, unless they opt out.
3. A
copy of the Note on APY is enclosed.
Note
on Atal Pension Yojana
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 who are not members of any statutory social security
scheme.
Age of
joining and contribution period: The
minimum age of joining APY is 18 years and maximum age is 40 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 auto-debit facility to accounts,
leading to reduction in contribution collection charges.
Enrolment
agencies: All Points of Presence (Service Providers)
and Aggregators under Swavalamban Scheme would enrol subscribers through
architecture of National Pension System.
Operational
Framework of APY: 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.
Funding
of APY: Government would provide (i) fixed pension
guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber
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.
Age of
Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the
nominee of subscribers
The
Table of contribution levels, fixed 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
|
******
DSM/KA