Atal Pension Yojana: You might have heard about Atal Pension Yojana on the news. But are you actually aware of this initiative of the Government?
Previously known as Swavalamban Yojana, the Atal Pension Yojana is a pension scheme in India which is supported by the government and it is targeted at the un-organized sector. It was first mentioned in the Budget Speech of 2015 by the Finance Minister, Arun Jaitley. It was thus launched by Prime Minister Narendra Modi in Kolkata. This scheme was introduced because, until 2015, only 20% of India’s population had any kind of pension scheme, and this scheme aimed to increase this number.
Atal Pension Yojana
As per Atal Pension Yojana, Central Government would co-contribute 50% of the total contribution or Rs.1, 000 per annum, whichever is lower, for every contribution made to the pension fund, to each eligible subscriber account, for a span of five years. The minimum age of joining this scheme is 18 years and maximum age of joining is 40 years. Naturally, the age of exit and the start of pension services would be at 60 years of age. This is why a minimum period of contribution under APY by the subscriber would be 20 years or more.
The Aadhaar Card’s ID number is the primary “Know Your Customer or KYC” document for identification of beneficiaries, first relations, spouses, and nominees to avoid disputes related to entitlement in the long-term. For proof of address, an individual needs to submit a copy of his or her ration card or bank passbook.
The subscribers of this Yojana are required to opt for a monthly pension from Rs.1000 to Rs.5000 and they have to ensure the payment of the stipulated monthly contribution regularly. As per the available monthly pension amount she subscribers can also opt to decrease or increase pension amount during the course of the accumulation phase. But, the option to switch is only provided once in a year – during the month of April.
Pradhan Mantri Jan Dhan Yojana
This scheme is linked to the accounts opened via the Pradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically from there. Recently, the Centre has allowed even the small finance Banks to offer APY.
Looking back, Swavalamban Yojana was also a pension scheme targeted at the unorganized sector in India and was government-backed. This scheme administered by the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013was applicable to all citizens in the unorganized sector whoever joined the National Pension Scheme (NPS).
Under this scheme, the Government of India contributed Rs.1000 per year to each NPS account opened in the span of 2010-11 and for the next three years too. The benefit of this Yojana was available only to people who joined the NPS with a minimum contribution of Rs.1000 and a maximum contribution of Rs.12, 000 per year. The Finance Minister announced this scheme in Budget 2010-11. It was funded by the Government of India grants.
Today, this scheme has been replaced with Atal Pension Yojana. To sum up, in APY all subscribing workers below the age of 40 are eligible for a pension of up to Rs.5000 per month upon the attainment of 60 years of age. (Atal Pension Yojana)