This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at [email protected]
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
88% of India’s total labour force of 47.29 crore belongs to the unorganised sector, in which the workers do not have any formal provision of getting a regular pension payment on retirement. Moreover, due to increasing labour wages and better medical facilities, these people also face a risk of increasing longevity. So, this work force would require some kind of assured income guarantee to sustain itself in the coming years.
Launching Atal Pension Yojana (APY) from June 1, 2015
To encourage workers in the unorganised sector to voluntarily save for their retirement, the government of India will be launching a new scheme, called Atal Pension Yojana (APY), from 1st June, 2015. Finance Minister Arun Jaitley announced this scheme in his budget speech on February 28th.
This scheme will replace the UPA government’s Swavalamban Yojana – NPS Lite and will be administered by the Pension Fund Regulatory and Development Authority (PFRDA). The benefits of this scheme in terms of fixed pension will be guaranteed by the government and the government will also make contribution to these accounts on behalf of its subscribers.
Under this scheme, a subscriber would receive a minimum fixed pension of Rs. 1,000 per month and in multiples of Rs. 1,000 per month thereafter, up to a maximum of Rs. 5,000 per month, depending on the subscriber’s contribution, which itself would vary on the age of joining this scheme.
The minimum age of joining this scheme is 18 years and maximum age is 40 years. Pension payment will start at the age of 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.
The Central Government would also co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and who are not income tax payers. The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.
Who is eligible for Atal Pension Yojana?
Any Citizen of India, aged between 18 years and 40 years, who has his/her savings bank account opened and also possesses a mobile number, would be eligible to subscribe to this scheme.
Government Funding – Indian Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or Rs. 1,000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.
Who is eligible for Government Co-Contribution in Atal Pension Yojana?
Subscribers of this scheme, who are not covered under any other statutory social security scheme and are not income tax payers, would be eligible for the government’s co-contribution of up to Rs. 1,000 per annum.
Social Security Schemes which are not eligible for Government Co-Contribution
- Employees’ Provident Fund (EPF) & Miscellaneous Provision Act, 1952
- The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948
- Assam Tea PlantationProvident Fund and Miscellaneous Provision, 1955
- Seamens’ Provident Fund Act, 1966
- Jammu Kashmir Employees’ Provident Fund & Miscellaneous Provision Act, 1961
- Any other statutory social security scheme
Minimum/Maximum Pension Payable – This scheme will pay a minimum pension of Rs. 1,000 per month and a maximum pension of Rs. 5,000 per month, depending on the subscriber’s own contribution per month.
Minimum/Maximum Period of Contribution – As the minimum age of joining APY is 18 years and maximum age is 40 years, minimum period of contribution by the subscriber under this scheme would be 20 years and maximum period of contribution would be 42 years.
Atal Pension Yojana – Contribution Period, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the Nominees of Subscribers
Internal Rate of Return (IRR) – Thanks to the government funding of Rs. 1,000 per annum per subscriber account for 5 years, your account would generate an IRR of approximately 0.66% per month or 8% per annum. This pension amount per month is fixed and the government has made it clear that if the actual returns on the pension contributions are higher than the assumed returns, such excess return will be credited to the subscribers’ accounts, resulting in enhanced pension payment to the subscribers.
Minimum Contribution – A subscriber aged 18 years will have to contribute a minimum of Rs. 42 per month in order to get Rs. 1,000 pension per month starting 60 years of age. For a 40 years old subscriber, his/her minimum contribution would be Rs. 291 per month. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.
Maximum Contribution – A subscriber aged 40 years will have to contribute Rs. 1,454 per month in order to get Rs. 5,000 pension per month starting 60 years of age. For a 18 years old subscriber, his/her contribution for Rs. 5,000 monthly pension would be Rs. 210 per month.
Can I increase or decrease my monthly contribution for higher or lower pension amount?
The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided only once in a year during the month of April.
What will happen if sufficient amount is not maintained in the savings bank account for contribution on the due date?
Non-maintenance of required balance in the savings bank account for contribution on the specified date will be considered as default. Banks are required to collect additional amount for delayed payments, such amount will vary from minimum Re. 1 to Rs. 10 per month as shown below:
(i) Re. 1 per month for contribution upto Rs. 100 per month
(ii) Rs. 2 per month for contribution upto Rs. 101 to 500 per month
(iii) Rs. 5 per month for contribution between Rs. 501 to 1,000 per month
(iv) Rs. 10 per month for contribution beyond Rs. 1,001 per month.
Discontinuation of payments of contribution amount shall lead to following:
After 6 months account will be frozen.
After 12 months account will be deactivated.
After 24 months account will be closed.
Subscriber should ensure that the Bank account to be funded enough for auto debit of contribution amount. The fixed amount of interest/penalty will remain as part of the pension corpus of the subscriber.
Post-Retirement Rate of Return – Considering a retirement corpus of Rs. 1.7 lakh and monthly pension of Rs. 1,000, this scheme is going to generate a return of 0.59% per month or 7.1% per annum for its subscribers. I think this return is also on a lower side.
Nomination Facility – This scheme will also provide the nomination facility to its subscribers. In case of the subscriber’s death after attaining 60 years of age, the whole corpus generating the pension income to the subscriber would be returned back to the nominee of the subscriber. In case of untimely death of the subscriber before 60 years of age, the balance would be returned back to the nominee of the subscriber.
Where to open APY Accounts – You need to approach points of presence (PoPs) and aggregators under existing Swavalamban Scheme. These agencies would enrol you through architecture of National Pension System (NPS).
Points of Presence & Aggregators
Application Form – Here you have the links to the application form for subscribing to Atal Pension Yojana – Application Form in English – Application Form in Hindi
I think a subscriber should opt for a minimum monthly contribution of around Rs. 167 or so, which would make it approximately Rs. 2,000 annual contribution. 50% of Rs. 2,000 i.e. Rs. 1,000 would be contributed by the government as well. So, the subscriber will get the maximum benefit of government funding.
As mentioned above, the scheme would start from June 1, 2015. So, interested people will have to wait till then to open an account. If you have any other query regarding this scheme, please share it here.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
how government contribute 1000 rs. ? it is not clear
Government contribution would get reflected in your account statement, whenever it is done.
sir.im a nps lite holder (with state govt. contribution) 2013. can I migrated fron that to apy.
Yes Biplab, you can migrate your account to APY.
its biplab kukreja sir.lm going to my sbi branch but they told me that they are unable to link the nps lite ac with my sb account. its only done by Nsdl . plz sir kindly help me I want to link sb account through electronic money transfer system as monthly basis.
Hi Biplab,
You should approach NSDL then and ask for the procedure.
sir
ami bujta parce na ja montly koto taka deta hoba joma .are kon bank a r account lagba
No one nationalized banks known about APY
Here is the link to the list of servicing POP – SP where these accounts are getting opened – https://npscra.nsdl.co.in/pop-sp.php
Hi Shiv,
Answering to so many questions regarding the scheme I guess you now can be the official consultant for the scheme 🙂
Hi Ketan,
If any such official proposal comes my way, I would be more than happy to be called the official consultant for this scheme or SSY. 🙂
Dear Sir,
Me and wife both are having one joint account, can we both apply for this Pension scheme with that joint account.
or I can go for other account which I am also having and my wife can go with this joint account.
Which one will be better.
Hi Dharmveer,
Only the first bank account holder can apply for this scheme. The other account holder will have to apply from some other bank account.
Hi Sir,
Sorry I didn’t understand this sentence –> “Only the first bank account holder can apply for this scheme”.
Kindly once clarify this.
Hi Dharmveer,
If yours is a joint savings bank account, then only the first bank account holder can apply for this scheme linking the joint bank account to this scheme. The other account holder will have to apply from some other bank account.
Hi Sir,
Suppose if a person is not paying for more than 2 year then I know that his account will be closed but I want to know that what will happen to his/her money which he/she has deposited till that time. Will he get that money or if yes then will he get any interest also for that.
Hi Sonu,
It is still not clear what will happen in this case.
Hello sir, I’m a house wife n I am not a tax payer, if I join the scheme, to get a pension of 5000 pm after 60, do I get the benefit of government funding?
Hi Nandini,
It seems that you are eligible for the government contribution.
Iam state government employee. And NPS account holder.am I eligible for atal pension yojana
Yes, you are eligible. But, you won’t get the government contribution of up to Rs. 1,000 per annum.
Hello Sir,
Thank you for the article . My question is if I opt for Rs 5000/month pension plan then as per my age I have to pay Rs 485/months, Will this premium amount increase yearly ? or will it remain same 485 till the account gets matured at my age of 40?
Hi Varun,
Rs. 485 monthly contribution will remain fixed throughout this contribution period. But, it will not mature as you turn 40, it will mature when you are 60.
Is it possible to apply for this online. I will turn 40 in July, I am eligible to apply.
No Sunitha, it is still not possible to open this account online.
Modi government.
Atal Yojana retirement pension.
A calculation.
@@@@@@@@@@@@@@@@@@@@@@@@
Arrive age. – 18
Years of paying – 42
Rupee paying Rs42 / =
Atal retirement pension Yojana
By project
Get a payment of – 17000.00
Monthly pension. – 1000.00
@@@@@@@@@@@@@@@@@@@@@@@@@
Calculation of the Post Office.
Arrive age. – 18
Years of paying – 42
Rupee paying Rs42 / =
Pay at the post office
interest of 8.4% per annum (quarterly
compounded) and recive a amount Rs 193673.00
The sixty-year-old senior at Rs 193673.00
Citizen interest rate of 9.3% per annum.
According to its availability of
Rs through interest
Monthly income 1500.00 / =
??????????????????????????????
Maximum age is 40 years. what about less than 41, i.e. if some is 40 years 6 months on June 30, 2015, will he be eligible?
Hi Mr. Dilip,
Yes, a person with such an age would be eligible for this scheme.
Dear Sir, APY enrollment form ki declaration me ek line aise likhi hui hai,
“Further, I do not hold any pre-existing account under NPS.”
Is line se to yahi samajh aa raha hai ki NPS vaale jinke paas PRAN hai, ve is yojna ko nahi le sakte. Sir, Kya aisa hai?
I am 20 yrs ,
sir whether i need to pay any initial amount other than contribution amount to join in this scheme ,if yes means how much sir?
Hi Prabudev,
You need not deposit any extra amount other than the monthly contribution.
Hello,
There is a loop hole in this scheme,,,amount is decided as per ur age and not by month,,,i should better start when i reach 29 years and 11 months,,,by this 11 month amount would be saved…m i rite ??
Hi Vaibhav,
It seems so, as per the information provided by Mr. Ramprasad.
sir aggar 5000 rs wali pension le rahe hai to atal pension yijna ke according nominee ko 850000 rs milenge After Death . kya 850000 Rs 60 years Ke Baad turant mil sakte hai jo pension Ka permium bhar raha hai
ir aggar 5000 rs wali pension le rahe hai to atal pension yijna ke according nominee ko 850000 rs milenge after death. kya 850000 rs 60 years Ke Baad turant mil sakte hai jo persion Ka permium bhar raha hai
sir aggar 5000 rs wali pension le rahe hai to atal pension yijna ke according nominee ko 850000 rs milenge after death kya 850000 rs after 60 years turant mil sakte hai jo persion permium bhar raha hai pension ke liye
Hi Puneet,
Rs. 8.50 lakh corpus amount sirf nominee ko milega after you and your life partner.
Dear sir
I am 35 (raning)yers old. I am a privet company contract employee So i am opening for Atal Pension Yojna secheme?
1/Monthaly 362 *12 month=4344 pear years 4344*25 years=108600 after 60 years whate amount will be return and monthaly penson
2/Question hai ki yadi mai 5 or 10 year tak plan chalane ke baad kise karan se plan nahi complite kar paata to mera jama rupaya milega yaa naheen.
3/Question hai ki ma kon Bank may apy opening karo,Bank yala moja kiya documant daga.
Regards
Bishal neogi
Hi Bishal,
1. 60 saal ke baad, Rs. 3.40 lakh corpus amount hoga and Rs. 2,000 pension amount.
2. Is query ka answer mujhe nahin pata.
3. Bank aapko ek statement issue karega.