Atal Pension Yojana (APY) for Social Security in India

Friends again I re-post this article  with request of my few viewer and readers of my blogs

Atal Pension Yojana

“As our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age”, said Finance Minister Jaitley in his 2015-16 Union Budget speech. In keeping with this ideal, a National Pension Scheme, the Atal Pension Yojana was effected from May, 2015. The scheme intends to bring pension benefits to people of the unorganised sector so that they can enjoy social security with a minimum contribution per month. People who work in the private sector or are employed in occupations that do not give them the benefit of pension can apply for this scheme. They can opt for a fixed pension of INR 1,000 or 2,000 or 3,000 or 4,000 or 5,000 on attaining the age of 60. The amount of contribution and the individual’s age will determine the pension. Upon the contributor’s death, the spouse of the contributor can claim the pension and after the spouse’s death the nominee will be returned the corpus accrued. The amount collected under the scheme is to be managed by Pension Funds Regulatory Authority of India (PFRDA) as per the investment pattern specified by the Government of India. Individual applicants will have no choice of pension funds or investment allocation.

Benefits of Atal Pension Yojana (APY)

The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower middle class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India has decided to contribute 50 percent of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution will, however, be enjoyed only by those who are not income tax payers and those who join the scheme before 31 December 2015.

Who is Eligible for Atal Pension Yojana?

The Atal Pension Yojana (APY)  is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme. All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.

How to Enroll for Atal Pension Scheme?

To sign up for the Atal Pension Yojana, an account holder must fill in an authorisation form and submit it to his/her bank. The form will require complete details including account number, spouse and nominee details, and authorisation for auto debit of contribution amount. Account holders signing up for the scheme need to ensure that sufficient balance is maintained in the account every month, failing to do so will attract a monthly fine of –

• INR 1 for monthly contribution up to INR 100
• INR 2 for monthly contribution between INR 101 and INR 500
• INR 5 for monthly contribution between INR 501 and INR 1,000
• INR 10 for monthly contribution beyond INR 1,001

If no payment is made towards the scheme

• for six months, the holder’s account will be frozen
• for 12 months, the holder’s account will be deactivated
• for 24 months, the holder’s account will be closed

For those who does not have a bank account: A person needs to open a bank account first by submitting the KYC document and Aadhar card. He/she is also required to submit the APY proposal form. Exiting the scheme: Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstance such as in the event of the death of the beneficiary.

APY Application Form

The application form can be downloaded from  http://www.jansuraksha.gov.in/FORMS-APY.aspx. The forms are available in different languages – English, Hindi, Gujarati, Bangla, Kannada, Odia, Marathi, Telugu and Tamil. Indicative Contribution for Various Pension Options (in INR)

Entry Age	Years of Contribution	Monthly Pension INR 1000	Monthly Pension INR 2000	Monthly Pension INR 3000	Monthly Pension INR 4000	Monthly Pension INR 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

*Data from Atal Pension Yojna brochure

Launch Across the Country

The Atal Pension Scheme and the other insurance schemes were launched on 9 May, 2015 simultaneously by Union and Chief Ministers. Prime Minister Narendra Modi launched the scheme from Kolkata. According to a statement by the Finance Ministry of India, as many as 30 lakh subscribers have registered themselves under APY as on June 30, 2016 and nearly 5,000 new subscribers are added every day.   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	1000	1.7 Lakh
20	40	50	1000	1.7 Lakh
25	35	76	1000	1.7 Lakh
30	30	116	1000	1.7 Lakh
35	25	181	1000	1.7 Lakh
40	20	291	1000	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	2000	3.4 Lakh
20	40	100	2000	3.4 Lakh
25	35	151	2000	3.4 Lakh
30	30	231	2000	3.4 Lakh
35	25	362	2000	3.4 Lakh
40	20	581	2000	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	3000	5.1 Lakh
20	40	150	3000	5.1 Lakh
25	35	226	3000	5.1 Lakh
30	30	347	3000	5.1 Lakh
35	25	543	3000	5.1 Lakh
40	20	873	3000	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	4000	6.8 Lakh
20	40	198	4000	6.8 Lakh
25	35	301	4000	6.8 Lakh
30	30	462	4000	6.8 Lakh
35	25	722	4000	6.8 Lakh
40	20	1164	4000	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	5000	8.5 Lakh
20	40	248	5000	8.5 Lakh
25	35	367	5000	8.5 Lakh
30	30	577	5000	8.5 Lakh
35	25	902	5000	8.5 Lakh
40	20	1454	5000	8.5 Lakh

Recent Developments

• Government will extend the benefit of the APY via Post Offices all over the country so as to bring more people under its ambit. The implementation of the scheme through post offices is expected to be more helpful for the people in rural areas.
• In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on premature death of the subscriber.
• The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.
• Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in year 2015 Budget.
• To increase the outreach of Atal Pension Yojana (APY) among the prospective subscribers in the country, The Pension Fund Regulatory and Development Authority of India (PFRDA), on August 19, 2016, has integrated the APY module with the bank’s core banking system, allowing enrollments to happen through people’s saving accounts. It will not only make the process convenient, but a whole lot faster and hassle-free. The customers would not be required to submit physical forms to the bank from now on, and a web-based APY subscriber registration mode has been allowed for customers with net-banking accounts.

Withdrawal procedure from APY 
Upon completion of 60 years of age: 
After attaining the age of 60 years, you need to get in touch with your respective bank or post office and submit the request for drawing the pension. 
However, if in case of subscriber's death after 60 years, the same amount of monthly pension is payable to spouse (default nominee). Nominee will be eligible for return of pension wealth accumulated till age 60 of the subscriber  and spouse. 

Exit before the age of 60 Years: 
As per circular dated May 2, 2016 on PFRDA website, voluntary exit in APY is generally not permitted. However in case of exceptional circumstances such as terminal illness, or death of the subscriber it can be allowed. 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 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.