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.
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.
5. 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 autodebit 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. 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, autodebit 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
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
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
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
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
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