The Government of India is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS).  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, who constitute 88% of the total labour force of 47.29 crore as per the 66^th Round of NSSO Survey of 2011-12, but do not have any formal pension provision, the Government had started the Swavalamban Scheme in 2010-11. However, coverage under Swavalamban Scheme is inadequate mainly due to lack of clarity of pension benefits at the age after 60.

2.       The Finance Minister has, therefore, announced a new initiative called Atal Pension Yojana (APY) in his Budget Speech for 2015-16. The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA) and who are not members of any statutory social security scheme. Under the APY, the subscribers would receive the fixed pension of    Rs. 1000 per month, ₹ 2000 per month, ₹ 3000 per month, ₹ 4000 per month, ₹ 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more. The benefit of fixed pension would be guaranteed by the Government. The Central Government would also co-contribute 50% of the subscriber’s contribution or ₹ 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to      2019-20, who join the NPS before 31^st December, 2015 and who are not income tax payers. The APY would be launched from 1^st June, 2015. The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.

3.       A copy of the Note on APY is enclosed.  

Note on Atal Pension Yojana  

Benefit of APY:   Fixed pension for the subscribers ranging between ₹ 1000 to ₹ 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.

Eligibility for APY:       Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme. 

Age of joining and contribution period:   The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Focus of APY:     Mainly targeted at unorganised sector workers.

Enrolment and Subscriber Payment:       All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.

Enrolment agencies:    All Points of Presence (Service Providers) and Aggregators under Swavalamban Scheme would enrol subscribers through architecture of National Pension System.  

Operational Framework of APY:   It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY.

Funding of APY: Government would provide (i) fixed pension guarantee for the subscribers; (ii) would co-contribute 50% of the subscriber contribution or ₹ 1000 per annum, whichever is lower, to eligible subscribers; and (iii) would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

Age of Joining, Contribution Levels, Fixed Monthly Pension and Return of Corpus to the nominee of subscribers

The Table of contribution levels, fixed monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below. For example, to get a fixed monthly pension between   Rs. 1,000 per month and ₹ 5,000 per month, the subscriber has to contribute on monthly basis between ₹ 42 and ₹ 210, if he joins at the age of 18 years. For the same fixed pension levels, the contribution would range between        Rs. 291 and ₹ 1,454, if the subscriber joins at the age of 40 years. 

 Table of contribution levels, fixed monthly pension of ₹ 1,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining	Years of Contribution	Indicative Monthly Contribution (in Rs.)	Monthly Pension to the subscribers and his spouse (in Rs.)	Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18	42	42	1,000	1.7 Lakh
20	40	50	1,000	1.7 Lakh
25	35	76	1,000	1.7 Lakh
30	30	116	1,000	1.7 Lakh
35	25	181	1,000	1.7 Lakh
40	20	291	1,000	1.7 Lakh

Table of contribution levels, fixed monthly pension of ₹ 2,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana  

Age of Joining	Years of Contribution	Indicative Monthly Contribution (in Rs.)	Monthly Pension to the subscribers and his spouse (in Rs.)	Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18	42	84	2,000	3.4 lakh
20	40	100	2,000	3.4 lakh
25	35	151	2,000	3.4 lakh
30	30	231	2,000	3.4 lakh
35	25	362	2,000	3.4 lakh
40	20	582	2,000	3.4 lakh

 Table of contribution levels, fixed monthly pension of ₹ 3,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana  

Age of Joining	Years of Contribution	Indicative Monthly Contribution (in Rs.)	Monthly Pension to the subscribers and his spouse (in Rs.)	Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18	42	126	3,000	5.1 Lakh
20	40	150	3,000	5.1 Lakh
25	35	226	3,000	5.1 Lakh
30	30	347	3,000	5.1 Lakh
35	25	543	3,000	5.1 Lakh
40	20	873	3,000	5.1 Lakh

Table of contribution levels, fixed monthly pension of ₹ 4,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining	Years of Contribution	Indicative Monthly Contribution (in Rs.)	Monthly Pension to the subscribers and his spouse (in Rs.)	Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18	42	168	4,000	6.8 Lakh
20	40	198	4,000	6.8 Lakh
25	35	301	4,000	6.8 Lakh
30	30	462	4,000	6.8 Lakh
35	25	722	4,000	6.8 Lakh
40	20	1164	4,000	6.8 Lakh

Table of contribution levels, fixed monthly pension of ₹ 5,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining	Years of Contribution	Indicative Monthly Contribution (in Rs.)	Monthly Pension to the subscribers and his spouse (in Rs.)	Indicative Return of Corpus to the nominee of the subscribers         (in Rs.)
18	42	210	5,000	8.5 Lakh
20	40	248	5,000	8.5 Lakh
25	35	376	5,000	8.5 Lakh
30	30	577	5,000	8.5 Lakh
35	25	902	5,000	8.5 Lakh
40	20	1,454	5,000	8.5 Lakh

Fixed pension guarantee for unorganised sector workers under a new government administered pension scheme enabling NPS enrolment. The Atal Pension Yojana establishes a government backed retirement scheme for unorganised sector workers joining NPS, providing a fixed pension guarantee for defined pension slabs with a minimum contribution period of twenty years for entrants aged eighteen to forty. The Government will provide a limited period co contribution to eligible non taxpaying subscribers who join within the initial window, reimburse promotional costs, and use NPS architecture, Points of Presence, and auto debit collection to enrol subscribers and administer benefits.