Atal Pension Yojana (previously known as Swavalamban Yojana) is a government-backed pension scheme in India targeted at the unorganised sector. It was mentioned in the 2015 by Finance Minister Arun Jaitely. It was launched by Prime Minister Narendra Modi on 9 May in Kolkata. As of May 2015, only 20% of India's population has any kind of pension scheme.
Swavalamban Yojana was a government-backed pension scheme targeted at the unorganised sector in India. It was applicable to all citizens in the unorganised sector who joined the National Pension Scheme (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA) Act 2013.
Under the scheme, the Government of India contributed ₹1,000 (US$14) per year to each NPS account opened in the year 2010-11 and for the next three years, that is, 2011-12, 2012-13 and 2013-14. The benefit was available only to people who joined the NPS with a minimum contribution of ₹1,000 (US$14) and maximum contribution of ₹12,000 (US$170) per annum. The scheme was announced by the Finance Minister in Budget 2010-11. It was funded by grants from the Government of India.
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$14) per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years. The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and the start of pension would be 60 years. Therefore, a minimum period of contribution by the subscriber under APY would be 20 years or more.
This scheme will be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme and the contributions will be deducted automatically. Most of these accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes.
Features of Atal Pension Yojana :-
- Existing Swavalamban Scheme Subscribers between the age group of 18-40 years would be migrated to APY automatically unless they opt out.
- Government co-contribution is available for 5 years i.e. from 2015-16 to 2019-20 for the Subscribers who join the scheme between 1st June, 2015 to 31st December, 2015.
- The existing Swavalamban subscriber, if eligible, may be automatically migrated to APY with an option to opt out. However, the benefit of five years of Government Co-contribution under APY would be available only to the extent availed by the Swavalamban subscriber already. This would imply that if, as a Swavalamban beneficiary, he has received the benefit of government Co-Contribution of 1 year, then the Government co-contribution under APY would be available only for 4 years and so on. Existing Swavalamban beneficiaries opting out from the APY will be given Government co-contribution till 2016-17, if eligible, and the NPS Swavalamban continued till such people attain the age of exit under that scheme.
- The management of funds under APY is as per the investment pattern specified by GoI.
- Individual Subscribers will not be having any option for choice of investment or select Pension Funds.
