Atal Pension Yojana

What is Atal Pension Yojna?

The Atal Pension Yojna (APY) is administered by the PFRDA (Pension Fund Regulatory and Development Authority) under the National Pension System (NPS), and was introduced in June, 2015 by the Government of India to provide income security to the poor who are working in the unorganised sector. This scheme was introduced to encourage individuals from the weaker section to opt for pension as it would immensely benefit them during their old age.

How much does one get at maturity?

• APY guarantees a fixed minimum pension of Rs 1000, Rs 2000, Rs 3000, Rs 4000 and Rs 5000. 
• This scheme is applicable to the citizens of India, who are employed in the unorganised sectors.
• The fixed pension after the retirement age of 60 depends on the contribution amount and tenure, until death of the subscriber.

Advantages of joining APY

• Guaranteed amount post retirement. 
• After death of the subscriber, the spouse will be entitled to get the exact same pension amount as the subscriber, until his/her death. 
• The nominee will receive the entire accrued pension amount till his/her age is 60 years, after the death of the subscriber and his/her spouse. 
• State Governments are authorised to provide an additional co-contribution to Atal Pension Yojna subscribers, in their respective states.
• The Government will contribute to subscribers who have subscribed within June to 31st December 2015 with 50% of contribution or Rs 1000, whichever is lower for 5 years.

How does one join APY?

• For APY, one has to have a savings bank account compulsorily.
• The APY scheme form can be downloaded from “http://www.jansuraksha.gov.in/FORMS-APY.aspx” after the savings account is open. 
• The form needs to be filled with details of Aadhaar card, mobile number, and contact details. 
• A minimum amount needs to be maintained in the account from where the decided contribution will be deducted every month.

Eligibility

• The subscriber can opt for this scheme between the ages 18 to 40 years.
• The minimum contribution time is about 20 years and above since maturity takes place at the retirement age of 60. 
• The subscriber must also have non-taxable income, which is up to 2.5 lakhs currently, and he or she must not be covered under any Statutory Social Security Schemes.

For subscribers of the Swavalamban scheme

Existing subscribers of the Swavalamban scheme will be automatically migrated to the Atal Pension Yojna plan, with an additional option of choosing to pull out, provided they meet the required eligibility criteria. 

However, if an existing Swavalamban subscriber has got Government contribution, then under the Atal Pension Yojna scheme, he will receive only the remaining months cumulative to five years together for co-contribution from the Government.

Limitation

• APY is for an Indian whose age is between 18 and 40 years only.
• In case of death of the subscriber before the age of 60 years, the nominee will get only the deposited amount.
• While considering a retirement corpus of Rs. 1.7 lakhs and monthly pension of Rs. 1,000, this scheme generates a return of 0.59% per month or 7.1% per annul for its subscribers, which is on the lower side. 
• Every year APY has to be renewed with the respective bank. 

Other Important Information

• Atal Pension Yojna subscribers can get regular alerts regarding account balance, credit of contribution and other account related activities via SMS alerts. 
• Subscribers can easily modify details like nominee name, phone number, address, etc. whenever they wish to do so.

The table below shows the accurate calculation of the amount which needs to be invested as per the duration of investment to get the corresponding monthly pension.

(For example, to get a monthly pension of Rs 1000, person joining at age of 18 needs to invest Rs 42 per month. If he requires a pension of Rs 5000, the investment goes up to Rs 210 per month.)

As of May 2015, only 11% of India's population are under any kind of pension scheme so, the Atal Pension Scheme aims to increase the number. This scheme is a step towards the betterment of the elderly people in the rural stratas and also provides financial security to people working in the unorganized sector.