Atal Pension Yojana: Higher Guaranteed Pension Under Consideration As PFRDA Pushes For Reform

The number of subscribers in the government’s Atal Pension Yojana (APY) has grown to more than 90 million. The guaranteed pension scheme’s gross enrolment recorded an addition of 13.50 million subscribers in the financial year 2025-26. By May 18, 2026, this number stood at 91 million, the Pension Fund Regulatory and Development Authority (PFRDA) has said.

On May 20, 2026, PFRDA held its annual felicitation programme to celebrate the achievements of APY in FY2025-26. The scheme has crossed Rs 54,000 crore now, compared to Rs 51,416.19 crore reported at the end of March 2026. Banks have been the primary drivers in spreading awareness about the scheme, with the State Bank of India (SBI) leading among public sector banks with 116 per cent achievement of its target. Jharkhand Rajya Gramin Bank came on top, achieving 288 per cent of its annual target.

The data shows a significant rise in youth participation, with 45.68 per cent of total enrolments being individuals in the 18-25 year age group. PFRDA chairperson S. Ramann said this reflected a growing awareness among the youth regarding long-term financial security. Further, women’s participation reached a record 55.14 per cent during the year, signalling a major shift in gender-inclusive financial planning. 

Despite these gains, the challenges remain. According to the data, 86.91 per cent of subscribers are enrolled in the minimum Rs 1,000 pension slab, and overall persistence remained at 50.10 per cent as of March 31, 2026. 

While noting the growth in the number of APY subscribers and the scheme’s asset under management (AUM), M Nagaraju, Secretary, Department of Financial Services, added that most of the subscribers are in the Rs 1,000 pension category. He said this was concerning as it denoted an ‘overwhelming concentration’ in the Rs 1,000 pension slab. He also expressed concern whether such a small amount would provide “adequate protection” in 20 or 30 years. He urged banking partners to nudge individuals towards higher pension tiers with growth in income. This would ensure that their pension would remain adequate for future needs and current affordability.

He also encouraged banks to target the urban informal workforce, especially street vendors, delivery partners, and domestic helpers. 

Ramann added that DFS is planning to re-examine the APY scheme to determine if a higher pension, potentially exceeding the Rs 5,000 cap, can be provided to beat the inflationary challenges.

Incidentally, PFRDA had received feedback from subscribers that even the highest bracket (Rs 5,000 monthly pension) under APY may not be enough after 15-20 years, according to a PTI report. Accordingly, PFRDA plans to engage with the DFS on the matter and provide a detailed report on the matter. However, Ramann clarified it will take time, and it is premature to reach any conclusion at this stage.

Incidentally, in an interview to Z Business earlier, Ramann had said that APY’s reach has increased significantly; people know about the scheme, and most importantly, find the concept of guaranteed pension appealing. However, around 80 per cent of the subscribers are in the lowest pension bracket (Rs 1,000), and thus, PFRDA aims to transition these individuals to the Rs 5,000 bracket to ensure better savings over time.

He further said that ‘pension adequacy’ is a critical factor because the value of the rupee will decline and may be significantly lower in 20 years due to inflation. He added that redesigning the scheme will require time and extensive research, particularly because it has a government guarantee component. The scheme has shown an 18 per cent steady annual growth, said Ramann, adding that efforts will be made to reach 22 per cent annual growth. 

APY is a guaranteed pension scheme, which offers a fixed pension ranging from Rs 1,000 to Rs 5,000 per month. This is for unorganised sector workers who are not income-tax payers. Subscribers need to contribute to the scheme per month, and in return, they will receive a pension after they turn 60. The same amount of pension will be offered to the subscribers’ spouse after their demise.