A to Z of Atal Pension Yojna - APY

The Atal Pension Yojna scheme, administered by the pension fund regulatory and development authority (PFRDA) through NPS (New Pension Scheme) architecture.

Depending on your contributions and tenure, you will receive the fixed minimum monthly pension of Rs. 1000, Rs. 2000, Rs. 3000,Rs. 4000, Rs. 5,000 from the age of 60 years

TERM..!

It is open to all bank account holders. People aged 18 to 40 years are eligible. The contributor will start getting pension from the age of 60 years.

The minimum period of contribution by the subscriber under APY will be 20 years and the maximum will be 42 years.

PAYMENT..!

To get a fixed monthly pension between Rs. 1,000 per month and Rs. 5,000 per month, a subscriber has to contribute on a monthly basis between Rs. 42 and Rs. 210, if he joins at the age of 18 years.

For the same pension, the contribution will range between Rs. 291 and Rs. 1,454, if the subscriber joins at the age of 40 years.

CO-PAYMENT..!

The central government will co-contribute 50% of the total contribution or Rs. 1,000 per annum, whichever is lower, to each eligible subscriber account, for five years from FY15-16 to FY19-20.

However, this is only for those who join APY between June 1 and December 31.

Importantly, co-contribution is for those who are not members of any statutory social security scheme and who are not income tax payers.

MODE OF PAYMENT...!

The payment is via auto debit from a bank account. 

Aadhaar will be the primary KYC document for beneficiaries, spouse and nominees.

SWITCH..!

Subscribers can decrease or increase the pension amount during the course of the accumulation phase, as per the available monthly pension amounts.

However, the switching option shall be provided once in a year during April.

EXIT..!

At 60 years, the pension amount opted is payable. On the death of subscriber, the amount will go to the spouse.

The nominee will be eligible for return of pension wealth upon the death of both the subscriber and the spouse. Exit before 60 years of age is not permitted.

However, in the event of a terminal disease or the death of the beneficiary, the amount of pension wealth in the APY account will be paid to the spouse, who is the default nominee or the nominee selected by the subscriber.

The indicative return of corpus to the nominee of the subscriber is Rs 1.7 lakh for a monthly pension of Rs. 1,000, Rs. 3.4 lakh (Rs. 2,000), Rs. 5.1 lakh (Rs. 3,000), Rs. 6.8 lakh (Rs. 4,000) and Rs. 8.5 lakh (Rs 5,000).

VERDICT..!

Subscriber has no option to choose either the investment pattern or /pension fund. With inflation, the Rs. 1000, Rs.2,000, Rs.3000, Rs.4000 or Rs 5000 one will get will not have the same purchasing power as now.

However, it still can be considered given the low costs

Src: Mr. B. Krishna Mohan, FC

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