Atal Pension Yojana: It’s Purpose, Features, Procedures and Benefits

What Is Atal Pension Yojana?

Atal Pension Yojana is a program which was launched in 2015–16. Its implementation was motivated by the need to offer pension benefits to people working in the unorganised sector. The Pension Funds Regulatory Authority of India (PFRDA) oversees and controls this program. It replaces the formerly established Swavalamban Pension Yojana, which the general public did not favour, and is an expansion of the acknowledged National Pension Scheme. All accounts created in the program’s initial year, or in 2015, were qualified for co-contributions from the Indian government for a period of five years.

An ongoing source of income for all Indian residents after the age of 60 is intended by the Atal Pension Yojana, a social security programme started by the Indian government. That is to say, it is a pension programme that primarily serves those who work in the unorganised sector, including maids, delivery boys, gardeners, etc. The scheme’s main objective is to provide Indian citizens a sense of security by ensuring that they don’t have to worry about unexpected sickness, accidents, or chronic ailments as they age. Employees in the private sector or those working for an organisation that does not offer pension benefits are also eligible to apply for the programme, thus it is not just limited to the unorganised sector.

What Purpose Does the Atal Pension Yojana Serve?

By promoting early savings, this pension programme aims to lessen the fundamental financial requirements that arise for people throughout their retirement period. An individual’s age and monthly contribution choice will directly affect the amount of pension they will get.

The accumulated corpus of Atal Pension Yojana (APY) beneficiaries would be paid to them in the form of monthly payments. If a beneficiary passes away, their spouse will continue to receive pension payments; if both of them pass away, the beneficiary’s nominee will get the money in one lump sum.

Details and Features of Atal Pension Yojana

The following is a discussion of the APY scheme’s features:

Electronic debit

The Atal Pension Yojana’s automated debit feature is one of its main benefits. A beneficiary’s bank account is connected to his or her pension funds, and the monthly payments are deducted directly from those accounts. Therefore, those who have signed up for this plan must make sure their account has enough money in it to accommodate such an automatic debit; otherwise, they risk being penalized.

Possibility of raising contributions

As previously stated, a person’s contributions affect the pension amount they are eligible to receive when they turn 60. There are various contributions, which translate into various pension sums.

And it’s possible that people will choose to boost their pension account contributions as a result of increasing financial capability in order to obtain a better pension amount later on in the scheme’s life. To help with this need, the government offers the option to adjust the corpus amount by increasing or even decreasing one’s payments once a year.

Assured pension

Depending on their monthly payments, program participants have the option of receiving a periodic pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000.

Retraction procedures of Atal Pension Yojana

After terminating the program with the appropriate bank, a beneficiary who has reached the age of 60 may be able to annuitize the whole corpus amount, i.e., receive monthly pensions.
The only ways to leave this system before turning 60 are through death or serious illness.
A beneficiary’s spouse is eligible to receive a pension in the event that the beneficiary passes away before turning 60. As a result, the spouse has the choice of leaving the pension plan with the corpus or continuing to receive benefits.
Individuals will only receive a reimbursement for their total payments and any interest earned if they decide to leave the programme before turning 60.

Late Payment Penalties of Atal Pension Yojana

The following (APY) penalty fees will be applied monthly in the event of late payments:
A penalty of Rs. 1 will be imposed for donations up to Rs. 100 each month.
There will be a Rs. 2 penalty applied if your monthly payment is in the range of Rs. 101 and Rs. 500.
There is a penalty of Rs. 5 for donations between Rs. 500 and Rs. 1,000 every month.
A Rs.10 penalty will be applied if your monthly payment is more than Rs. 1,000.

Benefits of Atal Pension Yojana

The following is a list of some of the scheme’s main benefits:

After turning 60, people are given a reliable stream of income, which enables them to afford necessities like pharmaceuticals, which are quite prevalent as people age.
The Pension Funds Regulatory Authority of India (PFRDA) oversees this pension plan, which is supported by the Indian government. People are therefore at no risk of losing money since the government would provide their pension.

The primary goal of the program is to ease the financial concerns of those working in the unorganized sector, allowing them to become financially independent in