Summary of this article
Government rules out any hike in APY pensions
Pension slabs and contributions to remain unchanged
Over 8.4 crore subscribers get policy certainty
The government has dismissed speculations about raising pension benefits under the Atal Pension Yojana (APY), stating that the scheme will continue with the same terms and conditions. Minister of State for Finance, Pankaj Chaudhary, has informed the Parliament that there is no proposal to increase the monthly pension or the corresponding contribution amount.
This announcement comes as the government discusses whether the pension slabs, which have been unchanged since the launch of the pension scheme, should be adjusted in light of the increasing living standards. This government has made sure that the pensioners are not burdened immediately regarding the change in the contributions.
Under Atal Pension Yojana, the minimum pension payable per month ranges from Rs. 1,000 to Rs. 5,000 based on the contribution made by the subscriber to the pension fund. With no hike planned, monthly contributions required to maintain the chosen pension amount will also remain unchanged.
It gives comfort to existing subscribers, particularly in the unorganised sector, who need predictability in contribution rates in order to save in the long term or even in retirement.
What Is Atal Pension Yojana
APY, introduced as part of the Union Budget 2015-16, is a social security program designed for unorganised sector workers to provide them with social security coverage and financial security after retirement by paying them a fixed pension amount after they attain 60 years of age.
The program operates on a voluntary basis and promotes disciplined saving for the future among individuals who may not be able to join formal retirement programs. Members and their spouses qualify to derive benefits from the pension program.
Pension Benefit Explanation
The pension payable is based on the monthly subscription contributed and the age at which one joins the scheme. The younger the subscriber is, the less the contribution he/she has to make in order to get the pension. The monthly pension they can earn is either Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, or Rs 5,000.
Contributions will continue until the subscriber reaches the age of 60. When the subscriber passes away, the spouse is entitled to the same pension for the rest of his/her life. When both the subscriber and the spouse die, the pension fund amount is payable to the nominee.
Scheme Management
APY is administered by the Pension Fund Regulatory and Development Authority (PFRDA). Contributions are invested as per regulatory guidelines to ensure returns that sustain guaranteed pension payouts.
Subscriber Base
According to the government data presented in the Parliament, more than 8.4 crores members are subscribed to the APY scheme currently. This rising number of subscribers indicates the significance of this scheme in securing the financial future of the unorganised sector workers and educating the young generation towards retirement planning.
Eligibility Criteria
The APY is open to Indian citizens aged between 18 and 40. The applicant must hold a functional savings bank or post office account linked with their Aadhaar number and a working mobile number. A minimum period of contributions is 20 years. Individuals who were part of the Swavalamban Scheme and migrated to APY are also eligible.
Income taxpayers, however, are not entitled to enrol in the program. This prohibition took effect on October 1, 2022.
How To Apply
Interested individuals can apply by contacting participating bank branches or post offices. Also, the application form is available offline and online, in multiple languages. Applicants need to present their personal details, Aadhaar number, bank account details, and spouse details if applicable. Nominee details also need to be provided, and the Pension amount needs to be chosen.
Once the form is submitted and processed, an SMS confirmation is sent to the applicant. The online registration facility is also provided by the NPS Trust website, providing an easy and accessible method.
