Government extended by 3 months, the timeline for its co-contribution facility under the Atal Pension Yojana (APY) in a move aimed at benefiting the unorganised sector.
A guaranteed pension scheme, APY provides monthly pension ranging from 1,000 to 5,000 rupees to the subscribers.
Scheme was announced 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.
Under the scheme the government co-contributes 50 per cent of the subscriber’s contribution for a period of 5 years, if the subscriber has joined before 31st December 2015.
The government has now extended its co-contribution plan for subscribers who join APY by 31st March 2016.
This measure is likely to benefit substantial number of people who have not been able to join APY.
The scheme will however continue for new subscriptions beyond March 2016, but without the benefit of 50% government co-contribution.
As per finance ministry’s data the number of subscribers under APY have increased to 1.8 crore till January 16, 2016.
Atal pension yojana:
Atal Pension Yojana is a government-backed pension scheme in India targeted at the unorganised sector.
Till the launch of this scheme only 11% of India’s population has any kind of pension scheme, this scheme aims to increase the number .
In Atal Pension Yojana, for every contribution made to the pension fund, The Central Government would also co-contribute 50% of the total contribution or ₹1,000 (US$15) per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years , from Financial Year 2015-16 to 2019-20, who join the NPS between the period 1st June, 2015 and 31st March, 2016 and who are not members of any statutory social security scheme and who are not income tax payers.
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.
Aadhaar would be the primary KYC document.
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.
This scheme will be linked to the bank accounts opened under thePradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically.
Recently Modified provisions under APY:
Subscribers were provided with an option to make the contribution on a monthly, quarterly, half yearly basis instead of only monthly basis earlier.
The account was not be deactivated and closed till the account balance with self-contributions minus the government co-contributions become zero due to deduction of account maintenance charges and fees.
The penalty on delayed payment was also simplified to Rs 1 per month for contribution of Rs 100 for each delayed monthly payment instead of different slabs given earlier.
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