In the past, the lower incomes groups of the society did not have access to an effective pension scheme that guaranteed them access to monthly pension to manage post retirement life. Since most of these workers come from the unorganized sectors, employer provided pension was hardly on the cards. However, the government is trying to bridge the gap by providing affordable pension services to the lower rung to help them manage a respectable life after retirement. Most of the citizens falling in this class are unable to afford a private pension plan.
With a view to extend benefits of financial inclusion to every Indian citizen, the Government of India rolled out an ambitious scheme aimed at providing pension services to the workers in the unorganized sectors of the society. It proposes to promote savings habit among the lower sections of the society by providing them a pension scheme that comes at minimal costs to the subscriber.
Administered by the Pension Fund Regulatory and Development Authority (PFRDA), this pension scheme is open to all the citizens between the age group of 18-60 years. A first of its kind in India, the Atal Pension Yojana is a social security scheme that guarantees a fixed monthly pension after superannuation on the basis of the subscribed amount. This scheme was unveiled during the annual budget of 2015 and came into effect from June 1, 2015. Citizens from the private and unorganized sectors who are not otherwise covered by other pension schemes qualify to apply for the APY.
One can easily subscribe to this scheme by filling the Subscriber Atal Pension Yojana Form that is available online and at the branches of participating banks. The duly filled form needs to be submitted to the bank who then facilitate opening of the account. They also act as agents to facilitate monthly payments and disbursal of pension after reaching the required retirement age.
Benefits of Atal Pension Yojana
- Regular monthly pension is paid out after the subscriber attains 60 years of age.
- The subscriber is free to opt for a pension amount of their choice ranging from Rs.1,000 to Rs.5,000 with increases in slabs of Rs.1,000.
- The government will contribute 50 percent of the subscriber's contribution or Rs.1,000 for 5 continuous years as an incentive to the pensioner’s account.
- If the contributor dies during an active scheme, the monthly pension is paid out to the spouse and to the nominee as a lump sum after death of the spouse.
- The monthly contribution is minimal and is not burdensome on the subscriber.
Eligibility for the Atal Pension Yojana is quite simple. One need not worry about elaborate conditions to fulfill the requirement.
Atal Pension Yojana Eligibility
Before applying for this government provided pension scheme, the following Atal Pension Yojana eligibility conditions have to be met.
- The subscriber should be in the age band of 18-40 years to qualify. This implies the minimum period of contribution is 20 years post which the subscriber will be able to draw pension on a monthly basis.
- The subscriber must have a KYC compliant active bank account to facilitate monthly contributions & should maintain the minimum balance in the bank account, sufficient enough to facilitate monthly debit of their contribution.
- Should not be a beneficiary of any other social security scheme of similar kind.
- The aspirant should not be member of company provided scheme or any other program that guarantees monthly pension after retirement.
- Should ensure uninterrupted monthly contribution until attainment of the retirement age. Any breaks in remitting monthly payments can result in closure of the account.
- Active members of the Swavalamban Yojana NPS Lite will be migrated to the Atal Pension Yojana Scheme.
To open a pension account under the Atal Pension Yojana, one can approach the nearest bank or other enrolment agencies appointed by the PFRDA as an aggregator. Nearly, all major banks and microfinance institutions are registered to provide APY related services in the country.
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