- Atal Pension Yojana gave more than 11% returns in last one year
- APY for workers in the unorganised sector has performed far better than most pension plans
- LIC Pension Funds gave 10.94% returns in the last one year
The Atal Pension Yojana or also knows as the APY is a minimum guaranteed pension scheme by the government and has specially performed far better for the workers in the unorganised sector than most of the other pension plans.
The scheme has given a return of more than 11% in the last one year. On the other hand LIC Pension Fund has given 10.94% in the last one year, SBI Pension Fund has generated a return of 11.24% and UTI Retirement Solutions has given 11.01% in the same time period, as per the data from Value Research.
However, there are some questions which remain like What does it mean for a subscriber? Will he receive a higher pension amount?
The APY provides a minimum pension which ranges from Rs 1,000 to Rs 5,000 on attaining the age of 60. However, if your contributions earn more than the assumed rate of return for the minimum guaranteed pension, the excess sum earned would be given to you as an additional benefit.
The Pension Fund Regulatory and Development Authority (PFRDA), said, “If the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscriber’s account, resulting in enhanced scheme benefits to the subscribers,”.
Having said this, if the actual realised returns on the pension contributions are less than the assumed returns for the minimum guaranteed pension, over the period of contribution, such shortfall shall be funded by the Government.
The Atal Pension Yojana completed its five years of implementation in May 2020 and enjoys over 2 crore workers under its ambit. This scheme was launched back in the year 2015 by the Prime Minister of India Narendra Modi to deliver old age income security particularly to the workers who belong from the unorganised sector of the economy.
The APY also aims to provide a guarantee of minimum pension after 60 years of age.
Any Indian citizen who is between the age of 18 and 40 years can subscribe to the Atal Pension Yojana. The amount of pension is guaranteed for a lifetime to the spouse on the death of the subscriber.
Lastly, in the event of the death of both the subscriber and the spouse, the entire pension corpus is paid to the nominee.
Back in April, the PFRDA had temporarily stopped auto-debiting savings account of the subscribers for APY contribution until 30th of June. This was done to protect the subscribers from the financial burden which were already taking a toll given the Coronavirus crisis. The auto debit for APY contributions resumed from the 1st of July.
Any pending contributions towards the scheme, for April 2020 to August 2020 can be paid by September 30 and no penalty would be levied on the subscriber.