This scheme is specially designed for workers in the unorganised sector. This scheme helps workers in the unorganised sector to save for their retirement. You contribute to this scheme while working and your contributions generate return after your retirement. The scheme extends old age protection to house-helps, gardeners, drivers, and other people from the unorganised sector. This scheme is named after the ex-Prime Minister Atal Bihari Vajpayee and was officially launched on 1st June 2015. APY scheme replaced the other social security scheme, the Swavalamban Scheme which wasn’t popular amongst the masses. This scheme is for all the people who join the National Pension System which is supervised and regulated by the PFRDA
(Pension Fund Regulatory and Development Authority). The subscribers of this will receive a fixed minimum pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs.4000, and Rs. 5000 as the pension fund is based on the subscriber’s contributions and the period of contribution.
Anyone working in the unorganised sector between the age of 18 to 40 can become a subscriber of this scheme.The only condition on entry age being that minimum contribution for 20 years is required under the scheme. The central government also plays a major role in this scheme by making contributions. The central government co-contributes about 50% of the total contributions prescribed by the worker or Rs. 1000 per annum whichever unit is lower. The central government can make contributions only for 5 years and for an amount up to Rs. 1000 if the worker joins the scheme before 31st December 2015. So, as per the guidelines, the contributions can only be made for a period of 5 years, i.e, from the financial year 2015-2016 to the financial year 2019-2020.
This organization is responsible for regulating Atal Pension Scheme under the National Pension System. All pension related schemes comes under the purview of PFRDA. According to PFRDA, Atal Pension Yojana has been faring well since it’s advent in 2015 and has set a target of getting 75 lakh new subscribers for the financial year 2019-2020.
A member of PFRDA tells that they have already reached a subscriber base of 1.5 crore people and aims to increase the subscriber base to 2.25 crore by the end of the next fiscal year (end march 2020). By the end of March 2018, the subscriber list of AYP contained 97 lakh people.
Since Swavalamban Yojana was not able to help the targeted audience, the government took the initiative of automatically transferring the subscribers of this scheme to Atal Pension Yojana. The government also provided subscribers with an option of opting out of the scheme if they satisfy the eligibility criteria. Subscribers migrating from the Swavalamban Yojana might not completely benefit from the government’s co-contribution to the scheme.
For example, if you have received contributions from the government for two years under the Swavalamban Yojana, then you will only be entitled to contributions from Government for three years. If the subscriber decides to opt out of the scheme during the transition period, then only till 2016/2017, were the subscriber was entitled to contributions from the government. Under the National Pension System, such subscribers can also continue with Swavalamban Yojana till maturity.
Subscribers falling in the age bracket of 18 to 40 years can opt for migration to Atal Pension Yojana. For a hassle free migration, it is important that you are lending your full support to the migration process. If you yourself want to initiate the process, then you can visit your nearest bank to shift from Swavalamban Yojana account to Atal Pension account. If you are above 40, then you can also opt out of the Swavalamban scheme withdrawing your contributions and the interest earned. Alternatively, you can continue to be a subscriber of Swavalamban Yojana and continue to earn interest till you turn 60.
You need to fulfil certain conditions before becoming a subscriber of Atal Bihari Pension Yojana:
Contributions under Atal Bihari Pension Yojana are made on a periodic basis by following a defined pension plan. The contributions are made on a monthly basis and usually range from Rs. 1000 to Rs. 5000. Your contributions to the scheme are dependent on two major factors:
For a detailed subscriber’s chart, you can either click on the link mentioned or can refer to the table.
If you are joining the scheme at the age of 18, then your monthly contributions would be less and the contribution period would be the longest. If you are becoming a subscriber at the age of 40, then your contribution period would be till you reach 60, i.e, 20 years.
If you are a part of any of the social security schemes mentioned below, then you are not entitled to receive government contributions under this scheme:
As mentioned above, if you are a part of any of these social security schemes and are a taxpayer, then you do not qualify to receive government contributions under the Atal pension scheme. The government co-contributions are only extended to those people who have valid PRANs (Permanent Retirement Account Number) issued by the PFRDA post receiving confirmation from CRA (Central Record-keeping Agency).
A prerequisite to becoming a subscriber of this scheme is that you should have a ‘savings account’. If you don’t have a savings account, then it is mandatory that you are opening a savings account to avail the benefits of this scheme. Your savings account could either be with a bank or a post office. The enrollment process started from 1st June 2015 and there is no last date to enroll in this scheme.
Alternatively you can also download the subscriber registration form online.
This is how your form would look like
It is important to note that subscribing to the AYP scheme online is an easy task but you can’t opt out of the scheme via online means. You will have to visit the home branch of your bank. Opting out of the scheme could be a tiresome process as it involves some paperwork.
If you fail to contribute towards the scheme regularly i.e. on a monthly basis, then you are in for some penalty charged by banks extending scheme registration via online means. This amount is mainly dependent on your monthly contributions to the scheme. Check the chart below to know the penalties:
|Penalty per month||Contribution per month|
|Rs. 1 p/m||Up to Rs. 100|
|Rs. 2 p/m||Between Rs. 101 to 500|
|Rs. 5 p/m||Between Rs. 501 to 1000|
|Rs. 10 p/m||Beyond Rs. 1001|
In case you fail to contribute towards the scheme, the following could happen to your account:
You can check your APY account status online. Follow the steps mentioned below to check the details of your APY account.
So, by using these two option, you can check the status of your APY (Atal Pension Yojana) along with your account statements and any other relevant details.
You can also subscribe for SMS alerts to inform you about your account balance, regular contributions and other details related to your Atal Pension Yojana account. For this, it is mandatory that you are registering a valid mobile number to stay updated about your account activities via SMS. You can also check for the due date for making payments, and get updates on the auto-debit facility.
Withdrawal procedure is different if you are withdrawing after the age of 60 than withdrawing the pension amount before the age of 60 years.
Once you have turned 60, you can put in a withdrawal request with your bank or post office. If the subscriber dies after turning 60, then his/her spouse will be entitled to the same pension amount granted on a monthly basis. And if both the subscriber and the spouse dies, then the nominee will get the returns on the pension amount accumulated by the subscriber till the age of 60.
Opting out of Atal Pension Yojana on voluntary basis is generally not permitted as per the notification dated 2nd May 2015 which is available on the Pension Fund Regulatory and Development Authority (PFRDA) website. However, it allows early withdrawals for exceptional cases like terminal illness and if the subscriber dies before turning 60. You will have to submit an ‘account closing application’ to your respective bank for closing your account.
You can find account closing form the official government website.
Check the image of the form below for reference purposes.
If you are exiting from the pension scheme voluntarily and you have received Government’s co-contribution in the scheme, then you will only be liable to receive a refund of contributions you have made to the scheme. Along with this, you will receive net actual income generated on your contributions after deducting the account maintenance charges. You will not receive Government’s contribution to the scheme and the amount generated on these contributions.
|Atal Pension Yojana||National Pension Scheme|
|People between the age of 18 to 40 years can join this scheme.||Anyone up to the age of 65 years can join this scheme.|
|NRIs cannot subscribe for this scheme.||NRIs can subscribe for this scheme.|
|Withdrawal before maturity is only allowed in exceptional cases.||Subscriber can withdraw money before maturity under this pension scheme.|
|A unique PRAN number is not a necessity under this scheme.||A unique PRAN number is allotted under this scheme for accessibility.|
|There are five pension slabs under Atal Pension Yojana, i.e, Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, and Rs. 5000.||Post-retirement pension is dependent on the Pension fund manager. Half of the pension amount is given at the time of retirement and the remaining amount is disbursed on a monthly basis.|
|There is only one type of account under Atal Pension Yojana.||There are two types of account under this scheme: Tier I and Tier II accounts.|
|No tax benefits are extended under this scheme.||One can claim a rebate of up to Rs. 2 lakh under this scheme.|
|If the accounts are opened before 31st December 2015, you receive a contribution of Rs. 1000 or 50% of your contribution from the government.||Subscribers of this scheme receive no contributions from the government.|
|Atal Pension Scheme only covers the pension of an individual.||National Pension Scheme covers extensive areas like returns on investment over a long time, old age security and its extension,low investment risks, and provisional income during old age.|
|You don’t have a special pension fund manager under this scheme.||Under this scheme, there are several pension fund managers like LIC pension fund Ltd, UTI retirement solutions Ltd, HDFC pension management Co.Ltd, and others.|
PFRDA (Pension Fund Regulatory and Development Authority) has put in two suggestions regarding the Atal Pension Scheme. These requests are pending with the government. PFRDA was hopeful that government would announce the changes in the interim budget but these suggestions haven’t been acted upon yet. Changes recommended by the PFRDA were:
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