Winning Bizness Desk

Mumbai.The Centre’s social security scheme Atal Pension Yojana (APY) has completed 11 years on May 9. Launched in May 2015, the scheme was designed to provide guaranteed pension support to people working mainly in the unorganised sector after the age of 60. Under the scheme, subscribers can receive a fixed monthly pension ranging from Rs 1,000 to Rs 5,000 depending on their contribution amount and age at the time of joining.

Who can invest in pension scheme

Any Indian citizen between 18 and 40 years of age can join the Atal Pension Yojana. However, the subscriber must continue investing for at least 20 years to become eligible for pension benefits after turning 60. The scheme is linked with a savings bank account and the contribution amount gets auto-debited directly from the account.

The amount invested depends on two key factors:

• The age at which a person joins the scheme
• The monthly pension amount the subscriber wants after retirement

Higher contribution leads to higher pension benefits after retirement.

Monthly investment depends on chosen pension

A person joining the scheme at 18 years of age can secure a pension of up to Rs 5,000 by contributing only Rs 210 every month. Those opting for a lower pension amount need to contribute less.

For 18-year-old subscribers:

• Rs 42 monthly contribution gives Rs 1,000 pension
• Rs 84 monthly contribution gives Rs 2,000 pension
• Rs 126 monthly contribution gives Rs 3,000 pension
• Rs 168 monthly contribution gives Rs 4,000 pension
• Rs 210 monthly contribution gives Rs 5,000 pension

The contribution amount rises with age because the investment period becomes shorter before retirement.

Higher age means bigger contribution amount

Subscribers joining the scheme at 40 years of age have to contribute much more every month to receive the same pension amount after retirement. Since they invest for fewer years, the monthly instalment becomes higher.

For 40-year-old subscribers:

• Rs 291 monthly contribution gives Rs 1,000 pension
• Rs 582 monthly contribution gives Rs 2,000 pension
• Rs 873 monthly contribution gives Rs 3,000 pension
• Rs 1,164 monthly contribution gives Rs 4,000 pension
• Rs 1,454 monthly contribution gives Rs 5,000 pension

People between 19 and 39 years of age also have separate contribution slabs, which can be checked online or through banks.

Flexible payment options for subscribers

The government has allowed flexible payment modes under the Atal Pension Yojana to make it easier for subscribers from different income groups. Investors can deposit money every month, every three months or every six months according to their convenience.

Important features of the scheme:

• Auto-debit facility from bank accounts
• Pension starts after 60 years of age
• Guaranteed pension amount fixed at entry stage
• Long-term social security support for families

The scheme has emerged as one of the Centre’s biggest pension programmes for low and middle-income groups over the last decade.

Spouse gets benefit after subscriber’s death

The scheme also provides financial protection to the family after the subscriber’s death. If the subscriber dies after retirement, the spouse continues to receive the same pension amount. After the death of both subscriber and spouse, the accumulated pension corpus is returned to the nominee.

In case the subscriber dies before turning 60, the spouse can either continue contributing to the APY account or withdraw the accumulated amount. The government has also clarified that income taxpayers cannot join the scheme. This rule came into effect from October 1, 2022, making non-taxpayers the primary beneficiaries of the pension programme.