The Atal Pension Yojana is a pension plan focused on providing pension benefits to the unorganised sector which comprises a large number of the total labour force of the country. The scheme came into effect as a replacement for Swavalamban Yojana which did not amass many applications as it did not guarantee pension benefits at the age of 60. The investment aim of Atal Pension Yojana is to provide social security to people of old age, specifically for the poor and underprivileged. In contrast to the Swavalamban Yojana, this scheme guarantees returns during the retirement phase or end of term of the policy.
The benefits of Atal Pension Yojana is that employees of the private sector can also subscribe to this scheme. Subscribers can select the amount of contribution as this affects the amount of returns as well. As an individual, you will be entitled a guaranteed pension amount of ₹1000|₹2000|₹3000|₹4000|₹5000 on attaining the age of 60 years. In case of death of the subscriber, the pension amount will be given to the spouse or nominee. Additionally, you are eligible for a tax benefit under Section 80CCD of the Income Tax Act, 1961.
The entire collected amount is managed and distributed by the Pension Funds Regulatory Authority of India (PFRDA). As an add-on to boost this scheme, the government declared to make a co-contribution of 50% or ₹1000 per annum to subscribers who joined between 1st June 2015 to 31st December 2015 for a period of 5 years. Government co-contribution is available for those who are not covered by any Statutory Social Security Schemes and is not income tax payer.
The eligibility criteria for Atal Pension Yojana is as follows.
Note: Subscribers of Swavalamban Yojana have been automatically migrated to Atal Pension Yojana.
APY is a regular contribution based pension plan which promises a guaranteed pension of INR 1,000/2,000/3,000/4,000 or INR 5,000. The monthly contribution will depend on the choice of pension you want and age when you enrol in the pension scheme. The pension will only start at the age of 60 years. So even if you start your contribution at the age of 40 years you will be needed to pay contribution for a minimum period of 20 years for your pension to start.
The amount of pension returns is determined by your monthly contributions. You can see the table below to evaluate your contribution with respect to age and pension plan.
| Age of Entry | Years of Contribution | Monthly pension of Rs. 1000. | Monthly pension of Rs. 2000 | Monthly pension of Rs. 3000. | Monthly pension of Rs. 4000 | Monthly pension of Rs. 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 | 453 | 551 | 689 |
| 33 | 27 | 151 | 302 | 414 | 602 | 752 |
| 34 | 26 | 165 | 330 | 453 | 659 | 824 |
| 35 | 25 | 181 | 362 | 495 | 722 | 902 |
| 36 | 24 | 198 | 396 | 543 | 792 | 990 |
| 37 | 23 | 218 | 436 | 594 | 870 | 1087 |
| 38 | 22 | 240 | 480 | 654 | 957 | 1196 |
| 39 | 21 | 264 | 528 | 792 | 1054 | 1318 |
| 40 | 20 | 291 | 582 | 873 | 1164 | 1454 |
The government of India has declared that it will co-contribute 50% of the total pension contribution amount or ₹1000 per annum for all subscribers. Additionally, the government will also reimburse the promotional and development activities including incentive to the contribution collection agencies.
All existing members of Swavalamban Scheme will be automatically migrated to APY but the benefit of co-contribution by the government will not exceed 5 years. This means that if a subscriber has received a co-contribution for 1 year under Swavalamban Scheme, then they will only be entitled a co-contribution benefit of 4 years. If they intend to exist from this scheme, then the government will provide co-contribution till 2016-17.
For subscribers above the age of 40 years who do not intend to continue with a Swavalamban Scheme can withdraw their entire amount as a lump sum or can continue till the age of 60 years to be eligible for annuities.
The operation of additional amount for delayed payments is based on a due date which begins on the 1st day of a calendar month. The contribution is recovered on a first in first out basis along with the fixed amount of charges as penalty for default.
In order to enroll in the Atal Pension Yojana, you will have to download an application form or visit any nationalized bank and submit the same. Ensure that you are carrying a self-attested photocopy of your Aadhaar as well as the original for verification. Next, mention the mode of payment such as monthly, quarterly and half yearly. Once you submit the application form along with KYC details, you have successfully subscribed to the APT.
Get in touch with your bank or post office where you have a savings account. If you don't have a bank account you will have to open a bank account in order to be eligible for this scheme.
You will need to fill the Atal Pension Yojana registration form and allow the bank to auto debit your contributions in the scheme as per your payment frequency mode selected- monthly, quarterly or half yearly instalment.
Private Banks like SBI, Axis and ICICI banks are also offering online registrations in this scheme in case you are tech savvy.
Once you have completed the contribution term and attained the age of 60 you can get in touch with your bank or post office where you had enrolled in this pension scheme. You will need to submit the request for starting your pension. In case of death of subscriber after 60 years, the same pension amount will be payable to the spouse. If the spouse and the subscriber both die, the accumulated pension corpus will be given to the nominee.
Atal Pension Yojana does not permit to exit the scheme before the age of 60 years of subscriber under normal circumstances. Exceptional cases of terminal illness or death of the subscriber can be allowed. Even in case of death of the subscriber the spouse has the option to continue to make contributions in the scheme and get a monthly pension pay out after the term has been finished.
What is Atal Pension Yojana?
Atal Pension Yojana is a pension scheme established by the government during the 2015-2016 budget. The aim is to provide social security and pension benefit to the poor and underprivileged people.
How can I join Atal Pension Yojana?
You can join the Atal Pension Yojana by submitting the Atal Pension Yojana Application Form at any of the nationalised banks.
Who can subscribe to APY?
All resident Indians between the age group of 18-40 years can subscribe to APY.
How much pension will be received under APY?
The amount of pension received under APY depends upon your monthly contribution towards the scheme. The guaranteed standard amount is ₹1000|₹2000|₹3000|₹4000|₹5000 on attaining the age of 60 years.
How are the contributions of APY invested?
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.
What is the benefit in joining APY scheme?
The primary benefit of joining APY scheme is that the government will co-contribute 50% of the contribution amount for a period of five years.
What is the procedure for opening APY Account?
For opening an APY account, you need to have a functional bank account and then you need to submit the Atal Pension Yojana Application Form at any of the nationalised banks.
Can I open APY Account without savings bank account?
No, it is mandatory to have a functional savings bank account in order to open an APY account.
What is the mode of contribution to the account?
The mode of contribution can be on a monthly, quarterly or semi-annually basis.
What is the due date for monthly contribution?
The is no fixed due date for the monthly contribution.
What will happen if required or sufficient amount is not maintained in the savings bank account for contribution on the due date? - If there is no sufficient amount in the savings bank account for pension contribution, then you will attract a monthly penalty ranging between ₹1 - ₹10 depending on the amount of contribution.
How much should I invest in APY to get the guaranteed pension of ₹1000?
You need a minimum contribution of ₹42 to ₹264 per month depending on your age of entry to get a guaranteed pension of ₹1000.
Is it required to furnish nomination while joining the scheme?
Yes, it is mandatory to furnish nomination while joining APY.
How many APY accounts I can open?
You can open only one account on your name for APY.
How to increase or decrease the monthly contribution for higher or lower pension amount?
For increasing or decreasing the monthly contribution, you will have to visit the bank and fill up a pension modification form and submit the same.
What is the withdrawal procedure from APY?
If you have achieved an age of 60 years, you can easily withdraw the entire amount or take it in the form of pension. For age less than 60 years, withdrawal is only allowed in case of terminal illness of death.
How to get status of individual contribution?
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Will I get any statement of transactions?
Yes, you will get a monthly statement by email free of cost.
If I move my residence/city, how can I make contributions to APY account?
Your contributions are not affected by your residence/city since the amount is deducted automatically from your bank account.
What will happen to existing subscribers in Swavalamban Yojana?
Subscribes who were enrolled in Swavalamban Yojana have been automatically migrated to APY.
Who are the other social security schemes beneficiaries not eligible to receive Government co-contribution under APY?
Individuals who have enrolled in Employee Pension Fund or any other fund are not eligible for APY.
