The Atal Pension Yojana (APY) is a government-administered pension scheme run by the Pension Fund Regulatory and Development Authority (PFRDA). The government established the pension scheme in 2015-16 budget to give income stability to those in the unorganised sector as they grow older.
Any Indian citizen between 18 and 40 who has a bank account and works in the unorganised sector is eligible to invest in APY. The pension scheme is administered by the PFRDA through National Pension Scheme (NPS) architecture.
It provides a guaranteed minimum monthly pension ranging from Rs 1,000 to Rs 5,000 for the subscribers. 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 and the age of subscribers joining the scheme.
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, the minimum period of contribution by the subscriber under APY would be 20 years or more. The benefit of fixed minimum pension is guaranteed by the government.
The monthly contribution to an APY account is determined by the investor’s monthly pension choice and the age of the subscriber at time of the opening of account. An APY chart from the PFRDA explains monthly contributions that must be made by a subscriber. According to the chart, if an 18-year-old investor chooses a Rs 5,000 monthly annuity after retirement, he or she will have to deposit Rs 210 each month.
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APY subscribers must have an Aadhar-linked bank account or post office account as well as a valid mobile number. Premature payment of pensions and withdrawal from the APY are not permitted, unless in exceptional circumstances such as terminal illness or death of the account holder. In case of death of subscriber, the pension would be given to the spouse and on the death of both of them (subscriber and spouse), the pension corpus would be returned to his nominee.
It is to be noted that more than one members of a family can apply for the PFRA pension scheme. Married couples under the age of 39 can apply separately for the plan. After the pair reaches the age of 60, they would receive a monthly pension of Rs 10,000. Husband and wife under the age of 30 can each make a monthly contribution of Rs 577 to their individual APY accounts. If the couple is 35 years old, the monthly contribution to their respective APY accounts increases to Rs 902.
It is to be noted that contributions made under APY get the same benefits as those under NPS. For contributions made under APY, income tax benefits under Section 80CCD(1b) of the Income Tax Act can be availed.
