1. Introduction
1.1 The Government of India is
extremely concerned about the old age income security of the working poor and
is focused on encouraging and enabling them to join the National Pension System
(NPS). To address the longevity risks among the workers in unorganised sector
and to encourage the workers in unorganised sector to voluntarily save for
their retirement, who constitute 88% of the total labour force of 47.29 crore
as per the 66th Round of NSSO Survey of 2011-12, but do not have any formal
pension provision, the Government had started the Swavalamban Scheme in
2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to
lack of guaranteed pension benefits at the age of 60.
1.2 The Government announced the
introduction of universal social security schemes in the Insurance and Pension
sectors for all Indians, specially the poor and the under-privileged, in the
Budget for the year 2015-16. Therefore, it has been announced that the
Government will launch the Atal Pension Yojana (APY), which will provide a
defined pension, depending on the contribution, and its period. The APY will be
focussed on all citizens in the unorganised sector, who join the National
Pension System (NPS) administered by the Pension Fund Regulatory and
Development Authority (PFRDA). Under the APY, the subscribers would receive the
fixed minimum 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 their contributions, which itself would be based on the age of
joining the APY. The minimum age of joining APY is 18 years and maximum age is
40 years. Therefore, minimum period of contribution by any subscriber under APY
would be 20 years or more. The benefit of guaranteed minimum pension would be
guaranteed by the Government. The APY would be introduced from 1st June, 2015.
2. Benefit of APY
2.1 The Guaranteed minimum pension for
the subscriber ranging between Rs. 1000 to Rs. 5000 would be available, if he
joins and contributes between the age of 18 years and 40
years. The contribution levels would vary and would be low if subscriber joins
early and increase if he joins late.
2.2 The benefit of minimum pension
under Atal Pension Yojana would be guaranteed by the Government in the sense
that if the actual realised returns on the pension contributions are less than
the assumed returns, for minimum guaranteed pension, over the period of
contribution, such shortfall shall be funded by the Government. On the other
hand, if the actual returns on the pension contributions are higher than the
assumed returns for minimum guaranteed pension, over the period of
contribution, such excess shall be credited to the subscriber’s account,
resulting in enhanced scheme benefits to the subscribers.
3. Eligibility for
APY
3.1 Atal Pension Yojana (APY) is open
to all bank account holders. The Central Government would also co-contribute
50% of the total contribution or Rs. 1000 per annum, whichever is lower, to
each eligible subscriber account, for a period of 5 years, i.e., from Financial
Year 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and
who are not members of any statutory social security scheme and who are not
income tax payers. However, the scheme will continue after this date but
Government Co-contribution will not be available.
3.2 The Government co-contribution is
payable to eligible PRANs by PFRDA after receiving the confirmation from
Central Record Keeping Agency at such periodicity as may be decided by PFRDA.
4. Age of joining and
contribution period
4.1 The minimum age of joining APY 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 APY would be 20 years or more.
5. Focus of APY
5.1 Mainly targeted
at unorganised sector workers.
6. Enrolment and
Subscriber Payment
6.1 All bank account holders under the
eligible category may join APY with auto-debit facility to accounts, leading to
reduction in contribution collection charges. The subscribers should keep the
required balance in their savings bank accounts on the stipulated due dates to
avoid any late payment penalty. Due dates for monthly contribution payment is arrived
based on the deposit of first contribution amount. In case of repeated defaults
for specified period, the account is liable for foreclosure and the GoI
co-contributions, if any shall be forfeited. Also any false declaration about
his/her eligibility for benefits under this scheme for whatsoever reason, the
entire government contribution shall be forfeited along with the penal
interest. For enrolment, Aadhaar would be the primary KYC 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 payment of
stipulated monthly contribution regularly. 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 once in year during the month of April. Each subscriber will be
provided with an acknowledgement slip after joining APY which would invariably
record the guaranteed pension amount, due date of contribution payment, PRAN
etc.
7. Enrolment agencies
7.1 All Points of Presence (Service
Providers) and Aggregators under Swavalamban Scheme would enrol subscribers
through architecture of National Pension System. The banks, as POP or
aggregators, may employ Business Correspondents (BCs) / existing non-banking
aggregators, Micro Finance Institutions (MFIs) as enablers for operational
activities. The banks would be paid an incentive for mobilising each subscriber
account under APY. Further, the banks may share the following incentives,
received by them from the Government, with the BCs/MFIs/Non-Bank Aggregators in
the ratio 50:50. 4
(i) Per capita
incentive @ Rs. 100
|
(ii) Incentive
payable for promotion and development of APY S. No.
|
Number
of subscribers under APY with each Bank
|
Incentives
for promotional efforts (only for new accounts opened during the year)
|
|
1.
|
Less
than 1 lakh
|
Rs.
20/-
|
|
2.
|
More
than 1 lakh and upto 3 lakh
|
Rs.
30/-
|
|
3.
|
More
than 3 lakh and upto 5 lakh
|
Rs.
40/-
|
|
4.
|
More
than 5 lakh
|
Rs.
50/-
|
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