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
2
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.
3
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
4
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.
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.
5
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
6
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
|
Years
|
of
|
Indicative
|
Monthly
|
Pension
|
Indicative
|
Return
|
of
|
Joining
|
Contribution
|
Monthly
|
to the
subscribers
|
Corpus
|
to
|
the
|
||
Contribution
|
and his
|
spouse
|
nominee
|
of
|
the
|
|||
(in
Rs.)
|
(in
Rs.)
|
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
|
Years
|
of
|
Indicative
|
Monthly Pension
to
|
Indicative
Return of
|
||
Joining
|
Contribution
|
Monthly
|
the
subscribers and
|
Corpus
|
to
|
the
|
|
Contribution
|
his
spouse (in Rs.)
|
nominee
|
of
|
the
|
|||
(in
Rs.)
|
subscribers
(in Rs.)
|
||||||
7
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
|
Years
|
of
|
Indicative
|
Monthly Pension
|
Indicative
Return of
|
|||
Joining
|
Contribution
|
Monthly
|
to
|
the
|
Corpus
|
to
|
the
|
|
Contribution
|
subscribers
|
and
|
nominee
|
of
|
the
|
|||
(in
Rs.)
|
his spouse
|
(in
|
subscribers
(in Rs.)
|
|||||
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
|
Years
|
of
|
Indicative
|
Monthly
|
Pension
|
Indicative
Return of
|
|||
Joining
|
Contribution
|
Monthly
|
to the subscribers
|
Corpus
|
to
|
the
|
|||
Contribution
|
(in
|
and his
|
spouse
|
nominee
|
of
|
the
|
|||
8
|
|
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
|
Years
|
of
|
Indicative
|
Monthly
|
Pension
|
Indicative
Return of
|
||
Joining
|
Contribution
|
Monthly
|
to
the subscribers
|
Corpus
|
to
|
the
|
||
Contribution (in
|
and his
|
spouse
|
nominee
|
of
|
the
|
|||
Rs.)
|
(in
Rs.)
|
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
|
||||
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