March 10, 2015

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Atal Pension Yojana – Income Security of Unorganised Sector Workers

In the Union Budget 2015, the Government announced to launch Atal Pension Yojana (APY) on June 1st focusing people in the unorganised sector providing them a maximum pension up to Rs 5000 every month after the age of 60 years. 
As per the scheme the present users of Swavalamban Yojana would directly shifted to APY except they decides to opt out.
Let’s check how the scheme going to look in the coming period

What is Atal Pension Yojana (APY) 
In order to resolve the endurance risks among the people working in the unorganised sector or to motivate them to save voluntarily for their retirement Government has decided to start Atal Pension Yojana.

Although Swavalamban Scheme was there to address this need but its coverage was not adequate because of non-transparency in the pension benefits for 60+ people.

The Atal Pension Yojana will focus on all citizens working in unorganized sector, NPS Subscribers and people who are not a part of any statutory social security scheme. 
Target: Unorganised sector workers constituting roughly 88% of task force (labour) of 47.29 crore (NSSO Survey of 2011-12).

Features of APY:  
  1. The account holders would get a fixed pension of minimum Rs 1000 to maximum Rs 5000 every month as per their contributions which again varies depending on their age of APY joining.
  2. Fixed Pension benefits are guaranteed by the government.
  3. The subscriber has to contribute for a minimum period of 20 years or more.
  4.  There will also a co-contribution by Central Government of 50% of subscriber’s contribution or Rs 1000 every year , whichever is less, in every account holder account in case someone who will adopt NPS before 31st December, 2015 as well as not an income tax payer.
  •   Minimum 18 years of age and maximum 40 years of age.
  •  Those who are not eligible for any statutory social security scheme.        
     Subscriber payment:  Those who are eligible for APY can join with auto-debit facility to accounts making a deduction in collection charges (contribution).   
     Administrative framework of APY: It comes under Indian Government scheme which is taken care by the Pension Fund Regulatory and Development Authority.

     Enrolment Agencies:  Aggregators under Swavalamban Yojana and all the service providers can enroll the account holders with architecture of National Pension System.   

     We are providing here a table showing contribution levels with Rs 1,000 fixed monthly pension for the subscribers under Atal Pension Yojana (Illustrative)

Age of Joining
Years of contribution
Monthly Contribution(Indicative) in Rs.
Subscribers monthly pension in Rs.
APY return to the subscriber or the nominees in Rs.
18 Years
1.7 Lakh
20 Years
1.7 Lakh
25 Years
1.7 Lakh
30 Years
1.7 Lakh
35 Years
1.7 Lakh
40 Years
1.7 Lakh


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