To make the Atal Pension Yojana (APY) more attractive, the Pension Fund Regulatory and Development Authority (PFRDA) has sought the government’s nod to double the guaranteed minimum pension under the scheme to Rs 10,000/ month and increase the upper age limit for entering APY to 50 from 40 now.
Officials reckon that such a move would attract more unorganised sector workers into the retirement plan. The APY has enrolled 1.18 subscribers till now since it’s roll-out in FY16.
The PFRDA is hopeful that the scheme’s subscribers would touch 1.5 crore by the end of FY19.
“These changes are required due to increase in longevity of life as well as cost of living,” PFRDA chairman Hemant G Contractor told FE.
The proposed changes and the recent permission to subscribers to contribute till the age of 70 instead of 60, would have profound impact on the scheme in coming years, he added.
Currently, to get a fixed monthly pension between Rs 1,000/month and Rs 5,000/month, the subscriber has to contribute on monthly basis between Rs 42 and Rs 210, if she joins at the age of 18 years. For the same fixed pension levels, the contribution would range between Rs 291 and Rs 1,454, if the subscriber joins at the age of 40 years. To get a pension of Rs 10,000, the subscriber may have to pay Rs 420/month if she is enrolled at the age of 18. For subscribers above the age of 18-year, the monthly contributions would rise depending on the age bracket at the time of enrollment.
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.
Contributions under APY are eligible for tax benefit under Sec. 80 CCD. In case of death of the subscriber, pension would be available to the spouse and in case of death of the subscriber and the spouse both, then the pension corpus would be returned to the nominee.