Government is worried about the old age income security of the working poor and keeps on encouraging and enabling them to save for their retirement. In order to deal with the longevity risks among the workers in the unorganized sector and to persuade them to save for their retirement government had launched a scheme known as Atal Pension Yojana (APY) in 2015-16 budget. The APY is focuses on all the people in the unorganized sector.
The scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA) via NPS architecture.
The scheme promises a co-contribution by Government of 50 percent of the overall prescribed contribution by a worker, up to Rs. 1000 / annum, but only to those who joined the scheme before 31st December 2015. Further, this co-contribution will be made only for five years - from 2015-16 financial year to 2019-20 in the eligible cases depending on conditions mentioned below.
Who are eligible for Atal Pension Yojana?
1. An Indian citizen
2. Have a valid bank account
3. Is in between 18 to 40 years of age.
What is the monthly contribution and mode of payment?
Atal Pension Yojana is a periodic contribution based pension scheme and promises a set monthly pension of Rs 1000 or Rs 2000 or Rs 3000 or Rs 4000 or Rs 5000. Your monthly contribution will depend upon the fixed amount of monthly pension you want & the age when you begin. Contributions will end and pension will commence at the age of 60 years. So, even if you join APY at 40 years of age you will have to pay premium for a minimum of 20 years to benefit the pension.
Benefits of APY
APY gives guaranteed pension of Rs 1,000 - 5,000 to the subscribers. The yojana also allows a subscriber to increase or decrease pension amount during the course of accumulation period, once a year.
In case of death of the member, the spouse/husband/wife shall be entitled for the same amount of pension till his / her demise. And after the death of both spouse & subscriber, the nominee will be allowed to receive the pension money that the member had collected till 60 years of age.
But if the subscriber dies before 60 then the spouse will be given a choice to either exit the scheme & claim the accumulated quantity or continue the yojana. The spouse of the subscriber will be entitled to get the same pension amount as the subscriber until death of the spouse in the latter case.
How to apply for APY?
To apply you will have to approach the bank or post office where your savings bank account is there. If you don’t have a savings account then you will have to open one such account to fill up the APY registration form.
If you are well-versed with online banking then you can easily get enrolled for the APY via your savings account directly using internet banking & select auto debit facility for making contributions. The premium will be debited from your age of enrollment till 60 years.
Which banks offer this facility?
Leading banks in India like ICICI and SBI are offering this facility via net banking. This online option is not available with all the banks and hence you will have to visit your bank to get yourself enrolled.
When you can exit?
1. On attaining the age of 60 years:
The exit from APY is allowed at the age with 100 percent annuitization of pension wealth. On exit, pension will be given to the member.
2. In case of death of the Member due to any cause:
In case of death of member pension will be given to the spouse and on the death of both, the pension amount will be returned to the nominee.
3. Exit before 60 Years:
Exit before 60 years of age is not allowed but it is permitted only in exceptional cases, i.e., in the event of the death of beneficiary / terminal disease.
What are the Penalties for non-payment?
Deduction will be made in the members account for maintenance purpose and other related charges on a periodic basis. Once the account balance in the member’s account becomes zero owing to deduction of account maintenance charges, fees & overdue interest, the account will be closed right away. If there is constant default for six months, pension account will be freezed and if there is a constant default for twelve months, account will be closed and balance will be given to subscriber.
For more details click the link given below
https://www.npscra.nsdl.co.in/scheme-details.php
