• The Atal Pension Yojana (APY) was launched on May 2015 to create a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganised sector.
• APY aimed at providing a steady stream of income after the age of 60 to all citizens of India.
|National Pension System (NPS)
• NPS is a voluntary, defined contribution retirement savings scheme designed to enable the subscribers to make optimum decisions regarding their future through systematic savings during their working life.
• The Central Government has introduced the NPS with effect from January 2004.
• NPS is being implemented and regulated by PFRDA in the country.
• NPS was made available to all Citizens of India from May 2009.
• Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years can join NPS.
• This scheme is regulated and controlled by the Pension Funds Regulatory Authority of India (PFRDA).
• It is an extension of the recognized National Pension Scheme (NPS) and replaces the previously institutionalised Swavalamban Pension Yojana which was poorly received by the general population.
• APY is open to all bank account holders in the age group of 18 to 40 years and the contributions differ, based on pension amount chosen.
• The pension will be determined based on the individual’s age and the contribution amount.
• Subscribers would receive the guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 at the age of 60 years.
• The monthly pension would be available to the subscriber, and after him to his spouse and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber.
• In case of premature death of subscriber (death before 60 years of age), spouse of the subscriber can continue contribution to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age of 60 years.
• Subscribers can make contributions to APY on monthly/ quarterly / half-yearly basis.
• Subscribers can voluntarily exit from APY subject to certain conditions, on deduction of Government co-contribution and return/interest thereon.
• The Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber, who joins the scheme during the period 1st June, 2015 to 31st March, 2016 and who is not a beneficiary of any social security scheme and is not an income tax payer. The Government co-contribution will be given for 5 years from the Financial Year 2015-16 to 2019-20.
• Source of income in old age - Individuals are provided with a steady source of income after they reach 60 years, thus financially enabling them to meet basic requirements such as medications, which is fairly common in old age.
• Government-backed pension scheme - This pension scheme is backed by the Indian government and regulated by Pension Funds Regulatory Authority of India (PFRDA). Hence, individuals carry no risk of loss as the government assures their pension.
• Enabling the unorganized sector - The scheme was launched primarily with the motive to alleviate the financial worries of individuals who are employed in the unorganised sector, thus enabling them to be financially independent in their later years.
• Nominee facility - In case of a beneficiary’s death, his/her spouse becomes entitled to the benefits of this scheme. They can either terminate their account and avail the entire corpus in a lump sum or choose to receive the same pension amount as the original beneficiary. In case of death of both the beneficiary and his/her spouse, a nominee shall be entitled to receive the entire corpus amount.
|Pension Fund Regulatory and Development Authority (PFRDA)
• The Pension Fund Regulatory and Development Authority (PFRDA) is a pension regulatory authority which was established in 2003.
• It is a statutory body established under PFRDA Act, 2003 enacted by Parliament.
• It is authorized by Ministry of Finance, Department of Financial Services.
• Headquarter - New Delhi
• It promotes old age income security by establishing, developing and regulating pension funds and protects the interests of subscribers to schemes of pension funds and related matters.