Atal Pension Yojana - All Your Questions Answered

In the previous article, we covered the Atal Pension Yojana in great detail. As mentioned at the end of the article, there may still be a few unanswered questions in your mind about this subject. The purpose of this article is to help you get those questions answered.

If you have any further questions on this Atal Pension Yojana, feel free to sound off in the comments section and as always, I would be more than happy to answer the same.

1. Who can Subscribe to the Atal Pension Yojana 

Anyone who is a citizen of India can join this scheme. The following are the eligibility criteria:
• Age of the subscriber should be between 18 and 40 years
• He/She should have a savings bank account
• He/She should have a mobile number (for notification purposes)

2. Is the additional contribution of Rs. 1000 from the Government of India available for everyone?

No. People who are covered under statutory social security schemes are not eligible to receive this contribution from the government. The list of schemes under which an individual, if enlisted, is not eligible for this additional grant of Rs. 1000 are:
• The Employees Provident Fund
• The Coal Mines Provident Fund
• Assam Tea Plantation Provident Fund
• Seamens Provident Fund
• Jammu Kashmir Employees Provident Fund
• Any other social security scheme

3. How are my contributions to the Atal Pension Yojana invested?

The corpus collected as part of this scheme will be invested as per the guidelines prescribed by the Finance Ministry. Don’t worry, your money is 100% safe as the Government of India provides a guarantee for your pension once you attain the age of 60.

4. Can I choose how my money is Invested? For ex: Can I opt for my money to be invested in the stock market for higher growth/returns?

No, you cannot. As the returns are guaranteed by the Government of India, the investment is also done according to the directions of the Ministry of Finance of India.

5. I don’t have an Aadhar Card. Can I still enrol in this scheme?

Yes you can. Though Aadhar is the primary KYC expectation, it is still not mandatory (since the Aadhar coverage is still not 100%). You can still open your account without the Aadhar card but you are expected to get the card soon and update your records ASAP. This is done to avoid pension payout disputes in the future.

6. I don’t have a bank account. Can I still enrol in this scheme?

No, you cannot. Having a bank account is a minimum expectation and hence you will be expected to open an account first before you can enrol in this scheme.

7. What will happen if required or 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 per month to Rs 10/- per month as shown below:
i. Re. 1 per month for contribution upto Rs. 100 per month.
ii. ii. Re. 2 per month for contribution upto Rs. 101 to 500/- per month.
iii. iii. Re 5 per month for contribution between Rs 501/- to 1000/- per month.
iv. iv. Rs 10 per month for contribution beyond Rs 1001/- per month.

Discontinuation of payments of contribution amount shall lead to following:
i. After 6 months account will be frozen.
ii. After 12 months account will be deactivated.
iii. After 24 months account will be closed.
Subscriber should ensure that the Bank account to be funded enough for auto debit of contribution amount

8. Is it required to furnish nomination while joining the scheme? 

Yes. It is mandatory to provide nominee details in APY account. The spouse details are also mandatory wherever applicable. Their aadhaar details are also to be provided.

9. How many APY accounts I can open? 

A subscriber can open only one APY account and it is unique

10. Will there be any option to increase or decrease the 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 once in year during the month of April.

11. When does the scheme mature?

The scheme ends when you reach 60 years of age wherein the entire corpus is used to subscribe to an Annuity product which will provide you with the pension – as agreed.
In case of the death of the subscriber (even if this happens before attaining 60 years age) the pension will be payable to the survivor (usually the spouse) and in case both the subscriber and his/her spouse is not alive, the corpus will be returned to the nominee.

12. How will I know the status of my contributions?

The status of your contributions will be intimated to your registered mobile number via regular SMS alerts. You will also receive a Physical Statement – which is expected once every year.

13. Are there any limitations for governmental contributions?

If you are a part of any other social security scheme and a tax payer, then you are not entitled for government contribution. For instance, members of the Social Security Schemes under the following enactments would not be eligible to receive Government co-contribution:  

1. (i) Employees’ Provident Fund and Miscellaneous Provision Act, 1952.
   
2. (ii)  The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
   
3. (iii)  Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
   
4. (iv)  Seamens’ Provident Fund Act, 1966.
   
5. (v)  Jammu Kashmir Employees’ Provident Fund and Miscellaneous Provision Act, 1961.
   (vi) Any other statutory social security scheme. 

However, you can still signup for the plan, there is nothing stopping you. 

Hope this article was able to answer your queries about the Atal Pension Yojana. If you have any further queries, do post a comment and I will try my best to answer your queries.

Atal Pension Yojana – Explained

The Atal Pension Yojana is a Pension Scheme offered by the Government of India to help Indian Citizens receive a pension in their old age. This is yet another Social Security scheme launched by our Hon’ble Prime Minister Mr. Modi. The purpose of this article is to help understand the details of this scheme.

Before we Begin – Why this scheme?

India is one of those countries that does not offer any nationwide Social Security scheme where citizens are protected in their old age. Many western countries offer this facility and our Hon’ble prime minister had promised to address this after he took charge.

The purpose of this scheme is to help the low income group working class of India who are employed in the unorganized sector and do not have any formal life savings like EPF or any other schemes.

So, what is this Atal Pension Yojana?

The Atal Pension Yojana is a Pension Scheme that is administered by the Pension Fund Regulatory and Development Authority (PFRDA) through NPS architecture. Citizens can signup for the National Pension Scheme or NPS (which has been covered in great detail in this blog – click here to know more) when they are aged between 18 and 40 years. The amount of pension they receive will be a combination of the amount they contributed and the no. of years they contributed towards their NPS account.

The Government of India would guarantee the pension that the citizens who enrol in this Atal Pension Yojana are supposed to get post retirement. The minimum monthly pension that subscribers could get would be between Rs. 1000/- and Rs. 5000/- per month.

Who is Eligible for Atal Pension Yojana?

The Atal Pension Yojana is open to all Citizens of India who hold bank accounts who are aged between 18 and 40 years. The exit age and start of the pension will be 60 years. This makes the minimum contribution period as 20 years (Assuming someone signs up at 40 years of age)

How to Subscribe to the Atal Pension Yojana?

All Points of Presence (service providers) of the NPS Swavalamban scheme would be eligible to enroll subscribers for the Atal Pension Yojana.

The amount you wish to contribute will be automatically deducted from your account. Based on the amount of pension you wish to receive (Between Rs. 1000 to Rs. 5000) and your age, the monthly contribution expected from your side will get determined. You are expected to make this contribution every month without fail. You can however choose to increase or decrease your future monthly pension amount and based on this, your monthly contributions will get adjusted automatically. A point to note here is that this change in pension amount (And contribution) can only be done Once every year during the month of April.

Are there any special benefits for signing up for the Atal Pension Yojana?

Yes, there are. As this scheme is specifically targeting the lower income groups from the unorganized sectors, the government is offering to contribute 50% of the amount contributed in a year or Rs. 1000/- (whichever is lower) every year for the first five financial years of the scheme – FY 2015-16 to FY 2019-20. This extra contributions is available for all new joiners who enrol into the scheme between 1st June 2015 and 31st December 2015 and who are not members of any statutory Social Security Scheme and who are not Income Tax Payers (People who fall below the minimum income group to fall into any tax bracket).

Atal Pension Yojana and the NPS Swavalamban Scheme

Existing Swalamban subscribers will be given an option to automatically migrate to the Atal Pension Yojana scheme. However, a key point to note here is that, the total additional Rs. 1000/- contribution each year will be limited to a maximum of 5 years. So, if someone received this Rs. 1000/- once as part of NPS Swavalamban, they will get the benefit for only 4 years under Atal Pension Yojana.

Swavalamban subscribers who are aged above 40 and those who do not wish to continue may opt out of the Swavalamban scheme by complete withdrawal of the entire corpus or may prefer to wait until they reach 60 years of age to start receiving the annuities (pension).

Missed Payments and Penalties

As with any investment scheme, the subscriber is expected to make timely contributions towards their accounts. As the amount is auto-debited from your bank account, you are expected to maintain sufficient amount in your account.

In case, the monthly payments are missed, the penalties would be as follows:

1. Rs. 1 per month for contributions up to Rs. 100 per month

2. Rs. 2 per month for contributions between Rs. 101 to Rs. 500 per month

3. Rs. 5 per month for contributions between Rs. 501 to Rs. 1000 per month

4. Rs. 10 per month for contributions above Rs. 1001 per month

By paying the penalty plus the delayed amounts, the subscriber can continue investing in the scheme. For ex: If someone paying Rs. 500 per month missed 3 monthly payments, he/she is expected to pay Rs. 1506 to revive their account.

In case the monthly contributions are missed continuously the following happens:

- After 6 months, the account gets Frozen

- After 12 months, the account gets De-activated

- After 24 months, the account gets Closed

Exit from the Scheme and Receipt of Pension Payments

Upon completing 60 years of age the subscribers will need to submit a request to the associated bank to start receiving their monthly pension.

Note: Closure of the account before achieving 60 years of age is only allowed in case of death of account holder or terminal illnesses.

Expected Monthly Contributions:

As mentioned earlier, the amount you are expected to contribute each month would vary based on your age and the amount of pension you wish to receive. As the minimum pension is Rs. 1000 and maximum Rs. 5000, the following would be the amount you are expected to contribute each month.

Age	Monthly Contribution for Pension
	Rs. 1000	Rs. 2000	Rs. 3000	Rs. 4000	Rs. 5000
18 years	42	84	126	168	210
19 years	46	92	138	184	228
20 years	50	100	150	198	248
21 years	54	108	162	215	269
22 years	59	117	177	234	292
23 years	64	127	192	254	318
24 years	70	139	208	277	346
25 years	76	151	226	301	376
26 years	82	164	246	301	376
27 years	90	178	268	356	446
28 years	97	194	292	388	485
29 years	106	212	318	423	529
30 years	116	231	347	462	577
31 years	126	252	379	504	630
32 years	138	276	414	551	689
33 years	151	302	453	602	752
34 years	165	330	495	659	824
35 years	181	362	543	722	902
36 years	198	396	594	792	990
37 years	218	436	654	870	1087
38 years	240	480	720	957	1196
39 years	264	528	792	1054	1318
40 years	291	582	873	1164	1454

Though this article covered the basics of the Atal Pension Yojana, you may still have a few open questions on this topic. The next article will be helpful in answering all your Questions on this subject.