Atal Pension Yojana
Atal Pension Yojana is a government-backed pension scheme in India. The new initiative, motivated by the Government’s concern for old age income security for the working poor, particularly in the unorganized sector, was announced in the budget proposals 2015-16 and was formally launched from 1st June, 2015. The scheme is to raise the living standard of the uninsured workers in the unorganized sector by inspiring and motivating them to come under National Pension System (NPS). The scheme will be run under the supervision of Pension Fund Regulatory and Development Authority (PFRDA).The scheme has been implemented after taking into consideration the shocking fact that as of May 2015 only 11% of India’s population has any kind of pension scheme. Atal Pension Yojana intends to bring more and more workers from unorganized sector into pension network. In order to achieve the goal of universal social security system, especially for the poor and the under- privileged, Atal Pension Yojana comes as boon. It ensures safety net, financial security and long term sustenance to families when the earning family member retires. The following table explains the nitty-gritty of this social security scheme.
|Atal Pension Yojana
The scheme has the sole objective of persuading workers in unorganized sector constituting 88% of total workforce, to voluntarily decide to save for the future needs after the retirement. The predecessor of Atal Pension Yojana was Swavalamban scheme which had been launched in 2010-11, but was ended as there was confusion in the scheme about pension benefits after completing the age of 60. Atal Pension Yojana – the improved version of erstwhile Swavalamban scheme-provides for the fixed pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on the contributions made by the subscriber before his retirement. As per the scheme the Government would co-contribute 50% of the subscriber’s contribution or Rs. 1000 per annum, whichever is lower, to eligible subscribers. The minimum age of joining this scheme is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under the scheme would be 20 years or more. The scheme is open to all bank account holders who are not members of any statutory social security scheme.
As per the guidelines Aadhaar would be the primary Know Your Customer document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term. The subscribers are required to opt for a monthly pension from Rs. 1000 – Rs. 5000 and ensure that the payment of stipulated monthly contribution is made regularly. The subscribers has the full freedom to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option can be availed of by the subscriber once in year during the month of April.
This scheme has been linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions are deducted automatically by the bank from the subscriber’s account. Most of these accounts had initially been opened with zero balance but now the government has sped up the process of reducing the number of such zero balance accounts by using this and other related schemes.