Thinking to join Atal Pension Yojna or not? One thing that may be stopping you from subscribing to this Central Government’s flagship pension scheme is the popular notion that only Rs 5000 is the maximum amount one can get as a monthly pension. This is not true. The maximum pension one can get under APY could be more than Rs 5000. But there is a condition: the subscribers’ contribution should return more than the assumed return during the subscription period.
When someone joins the scheme, a minimum pension of Rs 1,000 or 2,000 or 3,000- or 4,000 or 5,000 is guaranteed on the basis of an assumed return. The contributions to APY are invested as per the PFRDA guidelines. If the actual return will be more than the assumed return, then the subscriber would be eligible for the excess amount. In case the actual return is lower than the assumed return, the government will pay the balance amount to provide the guaranteed minimum pension.
Atal Pension Yojana is focused on the unorganised sector workers. It guarantees a minimum pension of Rs 1,000 or 2,000 or 3,000- or 4,000 or 5,000 per month from the age of 60 years depending on the contributions made by the subscribers. The APY scheme is open to all citizens of India between the age of 18-40 years. For opening the APY account, a subscriber should have a savings bank account/post office savings bank account. PFRDA says, "The prospective applicant may provide Aadhaar and mobile number to the bank during registration to facilitate receipt of periodic updates on APY account. However, Aadhaar is not mandatory for enrolment."
PFRDA on how pension is guaranteed
The biggest benefit of joining APY is that the scheme guarantees pension amount. According to PFRDA, the benefit of minimum pension is guaranteed by the Government in the sense that "if the actual realised returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, over the period of contribution, such shortfall shall be funded by the Government."
Also, subscribers can get more than the guaranteed minimum pension if the actual return on their contribution better than the assumed return. "if the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscriber's account, resulting in enhanced scheme benefits to the subscribers," says the regulator.
Subscribers’ contribution to APY are invested as per the guidelines prescribed by the PFRDA. After the completion of 60 years, subscribers can submit the request to the associated bank for drawing the guaranteed minimum monthly pension or higher monthly pension, if investment returns are higher than the guaranteed returns embedded in APY.
More women join APY
A new trend has been witnessed in Prime Minister Narendra Modi’s flagship APY scheme. The number of women subscribers of the scheme has gone up to 43 per cent in last three years. "Enrolment percentage of women with respect to total enrolments under Atal Pension Yojana has witnessed an increase from 37% to 43% in the last 3 years. It is a positive change to ensure equal gender participation in APY," PFRDA tweeted today.