Atal Pension Yojana is a government-backed pension scheme that will guarantee the subscriber a maximum of Rs 5,000 as pension per month till his/her death from the age of 60 onwards.
The pension can also be kept at Rs. 1,000; Rs. 2,000; Rs. 3,000; or Rs. 4,000 per month. This depends on the subscription amount, which is currently between Rs 42 and Rs 1,454. The age of the subscriber should be between 18 and 40 years.
While the pension is still in the accumulation phase, a subscriber may decrease or increase the pension amount once per financial year.
Opting for Higher Pension Than Guaranteed Returns
The subscribers will be able to request the guaranteed minimum monthly pension or a higher monthly pension if the investment returns exceed guaranteed returns embedded in the Atal Pension Yojana. The request for drawing a higher monthly pension can be made at an affiliated bank or post office.
After a request has been successfully submitted, the subscriber will begin receiving a monthly pension based on their payments made to the scheme. The spouse (the default nominee) will receive the same monthly pension upon the death of the subscriber. In the event of demise of both the subscriber and the spouse, the nominee will be entitled to a return of the pension wealth accumulated by the subscriber till the age of 60 years.
If the subscriber passes away before turning 60 years of age, the spouse can continue to make contributions to the APY account of the subscriber. In that case, the account can be kept in the spouse’s name for the remainder of the vesting term, until the original subscriber would have turned 60 years of age.
“The spouse of the subscriber shall be entitled to receive the same pension amount as the subscriber until the death of the spouse. Such APY account and pension amount would be in addition to even if the spouse has his/her APY account and pension amount in his/her own name,” the APY website says.
Alternatively, the spouse or nominee can also receive the entire accumulated corpus under APY, without continuing with the monthly payments.
Early Withdrawal
Early withdrawal is allowed under APY for individuals below 60 years of age.
Only the subscriber’s contributions to APY, and the net real accrued income will be returned after deducting the account maintenance, and investment management etc. charges, among others. If one withdraws the funds early, he/she will not be entitled to the co-contribution amount that he/she has received during the first five years of participation in the plan.
The branches of APY service providers are tasked with collecting the “APY Account Closure Form” from the subscriber, spouse, nominee or claimant in accordance with the format specified by the Pension Fund Regulatory and Development Authority (PFRDA). The form is available on National Pension Scheme (NPS) website.
The APY service providers are to forward all exit requests to the central recordkeeping agency (CRA) along with a covering letter indicating where the request will be processed.
