Pradhan Mantri Atal Pension Yojana (APY)
It cannot be denied that the present government has been focused on the benefits and financial security of the common people of India. Ever since the present government has come up into power, our Prime Minister, the finance minister and the whole cabinet are really concerned about bringing an economical security throughout the country. The first step for bringing the economic security was the establishment of PMJDY. And then the launch of two insurance schemes and one pension scheme called Atal Pension Yojana again proved the government’s endeavor regarding this issue. This was the second phase of PMJDY because it was important that people opted for the mainstream banking before they were provided with the benefits. Now that being said, this article is going to focus on the different aspects of the Atal Pension Yojana. Have a Look!
What is the Atal Pension Yojana?
As the young population ages, it will become pension-less. And this is why a national Pension scheme has been formatted by the central government. This will offer the pension benefits for the people of unorganized sector. And this will help them in getting a certain secured amount per month. The scheme is applicable for those who have been working in private organization or the unorganized sectors. Since they are not offered with any benefit of pension, they will have the option of getting a certain amount after they reach the age of 60. But for that, the individual needs to make a contribution every month. The amount of contribution and the age of individual are going to determine the pension. And in any case, god forbid, the individual dies, then the spouse/parents, will be the claimant of pension. And after the death of spouse, the nominee shall be returned corpus accrued.
The primary objective of this scheme:
To enable the unorganized sector workers who do not have any social security scheme, save for the future.
To encourage the worker within unorganized sectors to save voluntarily for the retirements, for the times when they will not be able to earn any more.
What are the benefits of Atal Pension Yojana?
The Atal Pension is going to bring a security for the individuals who do not have any option of getting pension at old ages. This is going to promote a culture of savings within the lower and lower middle class society.
A great advantage of this scheme is the poorer section of our society will be really benefitted from the government. 50% of the user’s contribution will be made from the government. But this will be valid only for those who do not pay up any income tax.
Who are eligible for the Atal pension Yojana?
All Indians are eligible for the Atal pension Yojana. There is a certain age limit. But you will have the option of contributing as much amount as you want to reap the benefits of the scheme. If any bank account holder who does not have a statutory social security scheme, will also avail the scheme. The existing members of Swavlamban Yojana NPS Lite are also eligible for the Atal Pension Yojana. They will be directly migrated to the scheme since that Swavlamban Yojana is replaced by the APY.
How to Apply or enroll for APY?
If you are looking to sign up for the APY, the account holder needs to fill up the authorization form and then submit it to his/her bank. The form will need the details that include account number, spouse, and nominee details. The account holders who are signing up for this scheme, needs to make sure that every month they are able to maintain sufficient amount of balance. Because, if you are not able to do so, a certain amount of fine will be deducted. And for those who do not have a bank account, can also opt for this scheme. But before than you need to have a bank account by submitting a KYC document, Aadhar card and the APY proposal form. It must also be remembered that any individual who is under the APY, shall not be able to exit the scheme before the age of 60 years. Exiting the scheme shall only be possible under special circumstances, for instance death of a beneficiary.
The migration of APY from Swavlamban
The government has proposed that the existing subscribers of National pension scheme or aka the Swavlamban scheme will be automatically migrated to the APY. IF they do not want to opt out from the NPS scheme, it will also be done automatically. Actually there is not any difference between the two schemes. Both the schemes required a minimum contribution of Rs 1000 per month.
The enrolment features
The due dates for monthly contribution need to be maintained specifically. If there is a case of repeated defaults, then the account of APY is liable for foreclosure. Also, if there are GOI co-contributions, that will also be forfeited.
If there are any false declarations about the eligibility of the beneficiary, then the complete government contribution will be forfeited and nothing will be provided to the family of the beneficiary. The beneficiary will also be charged with interest in such cases. About the contributions, the subscriber has complete freedom for selecting the decreased or increased pension amount throughout the collection phase. But, you can switch for only once during the month of April every year. After they join the APY, they will be provided with an acknowledge slip and that will ensure they receive pension amount for every months at the age of 60.
The operational framework of APY
This is a government of India scheme which will be administered by the PFRDA government. The institutional architecture, that will be utilized for enrolling subscribers are under the APY. The offer document and even the APY shall be included within the account opening form and it will be formulated within the PFRDA.
Mode of payment of Premium under APY
It is a must for all the subscribers to have a bank account order for continuing the pension scheme. The monthly premium from pension scheme shall be auto debited from the savings bank account. The scheme is definitely best for those who work under the unorganized sectors and do not have any social security scheme. And this is why they can start investing in this scheme so that they can secure their old ages.
The operation of additional amount for the delayed payments
The APY shall be raising the due date and they shall keep on continuing the demand until and unless the amount is attained from the account of the subscriber. The due date for recovery of monthly contribution can be treated as the first day or any other day within the calendar month. But the bank has the complete legal right for retrieving the money at any date of the month. The monthly collections shall be collected on FIFO basis, because the installments shall be recovered initially from a fixed charge. Then considering the funds that can be availed, more than one month’s collection can be recovered. And this will be done along the fixed due date. This is going to be a complete internal process and the dues will be received as and when the funds are available.
The recent developments of APY
Speaking of developments within APY, the government will be extending the help for common people y letting the APY operate through the post offices all over the country. This is going to bring more people in its territory. The implementation through post offices will be helpful in rural areas especially because in such areas the banks are lesser in number.
There was the amendment of the scheme’s provisions for offering the subscribers spouse an option to continue contribution within the account for the remaining period in case of premature death of the subscriber. As stated in the recent reports, the APY contributions are also eligible for tax benefits because it was for the NPS. This also includes the deduction of an additional amount of Rs 50000 in this scheme.
To increase the outreach of the Atal Pension Yojana, through the prospective subscribers, the PFRDA will integrate the APY module in core banking system. This will help the enrolments take place through the savings bank account.
A tabular overview of Pradhan Mantri Atal pension Yojana
|SL NO||Facts to know about APY||Brief details|
|1.||Launch date||1st June 2015|
|2.||Launched By||Narendra Modi|
|2.||Target Audience||Unorganized Sector|
|2.||Minimum age||18 years|
|3.||Maximum age||40 years|
|4.||Penalty for no contribution in the scheme||No contribution for 6 months- account frozen|
No contribution for 12 months-account deactivated
No contribution for 24 months-account closed
|5.||Minimum monthly pension||Rs 1000|
|6.||Maximum monthly Pension||Rs 5000|
|7.||Check APY status||Through mobile notifications|
|8.||Total registrations till date||30 Lakh from the date of implementation|
|9.||Contribution of GOI||Rs 100 crores overall|