Atal Pension Yojana Amended

Named after the former prime minister of India, Atal Bihari Vajpayee, Atal Pension Yojana also known as APY Scheme was launched in continuation to the Jan Dhan Yojana Scheme to bring those employed in rural and unorganised sector under the ambit of Pension Schemes. The idea of the scheme is to provide a definite pension to all Indians.

However, in order to get pension during your old age, you need to contribute accordingly. The more you can contribute the more pensions you would get during old age. The scheme is backed by Ministry of Finance, Government of India. The scheme would mostly touch those working under unorganised sector.

Atal Pension Yojana (APY) has been amended to give an option to the spouse to continue to contribute for balance period on premature death of the subscriber.

After the death of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age of 60 years of the subscriber.

Amendments done based on feedback received:

These changes were done after the feedback was received from various quarters. The feedback indicated that the present provision under Atal Pension Yojana (APY) of handing-over lump sum amount to spouse on premature death of the subscriber is not preferred by many subscribers.

It has also highlighted the fact that there is growing demand to give an option to the spouse to continue contribution after the death of subscriber to enable him / her to draw pension when the deceased subscriber would have turned 60 years of age.

Therefore, after considering the feedback, the Government has decided to give an option to the spouse of the subscriber to continue contributing to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age of 60 years instead of present provision of handing-over lump-sum amount to spouse on the premature death (death before 60 years of age) of the subscriber.

The spouse of the subscriber shall be entitled to receive the same pension amount as that of the subscriber until the death of the spouse. After the death of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age of 60 years of the subscriber.

What was the provision earlier:

Earlier 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, the Government had launched a new initiative called Atal Pension Yojana (APY) with effect from 1st June, 2015.

Under APY, each subscriber, on completion of 60 years of age, will get the guaranteed minimum monthly pension, or higher monthly pension, if the investment returns are higher than the assumed returns for minimum guaranteed pension, over the period of contribution.

After the subscriber's death, the spouse of the subscriber shall be entitled to receive the same pension amount as that of the subscriber until the death of the spouse. After the death of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age of 60 years of the subscriber.

In exceptional circumstances, that is, in the event of the death of beneficiary or specified illness, as mentioned in the PFRDA (Exit and withdrawals under the National Pension System) Regulations, 2015, before the age of 60 years, the accumulated pension wealth till date would be given to the nominee or the subscriber as the case may be.