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APY Is A Voluntary, Periodic Contribution Based Pension System: Supratim Bandyopadhyay, WTM Finance, PFRDA

In an interview with BW Businessworld, Supratim Bandyopadhyay, WTM Finance, PFRDA, talks about Atal Pension Yojana and more

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Tell us a little bit about the structure of the APY (Atal Pension Yojana). What are some of its advantages and drawbacks?

The Government  of  India  has  introduced  a  pension  scheme  called  the  Atal  Pension  Yojana (APY), with effect from 1st June, 2015, pursuant to the announcement in the budget for 2015-16 on creating a universal social security system for all Indians, especially  the poor, the under-privileged and the workers in the unorganised sector. APY  is   administered  by  the  Pension  Fund  Regulatory  and  Development  Authority  (PFRDA)  under  the  overall administrative and institutional architecture of the National Pension System (NPS). APY  is open to all citizens of India who have a savings bank account. The minimum age of joining APY is 18 years and maximum age is 40 years. 

Benefits under APY :

APY is a voluntary, periodic contribution based pension system, under which the subscriber would receive the following benefits: 

(i) Central Government guaranteed minimum pension amount: 

Each subscriber under APY shall receive a Central Government guaranteed minimum pension of Rs. 1000 per month or Rs. 2000 per month or Rs. 3000 per month or Rs.4000 per month or Rs. 5000 per month, after the age of 60 years until death.

(ii) Central Government guaranteed minimum pension amount to the spouse: 

After the subscriber’s demise during the deaccumulation phase , 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. 

(iii) Return of the pension wealth to the nominee of the subscriber: 

After the demise of both the subscriber and the spouse, the nominee of the subsc

riber shall be entitled to receive the pension wealth, as accumulated till age 60 of the subscriber

What returns can investors expect from their investments in the APY? What does the effective IRR (Internal Rate of Return) work out to during the entire investment and withdrawal period, combined?

APY is minimum Guaranteed Pension Scheme, hence irrespective of the return of the scheme, subscriber shall get guaranteed minimum pension of Rs. 1000 per month or Rs. 2000 per month or Rs. 3000 per month or Rs.4000 per month or Rs. 5000 per month depending upon the Pension Slab chosen by the subscribers. However, the return on the investment as on 31/08/2019 is 9.56%.

Please tell us about a few recent trends in the APY. Has it grown in popularity over the years?

As on 30th Sept 2019, the number of subscriber enrolled under APY has crossed 1.85 crore mark. The response to APY in this financial year is overwhelming and on an average, 15,000-20,000 APY accounts are being added every working day indicating a growth of 60% in comparison to the last financial year. More than 1.85 lakhs APY accounts are sourced during this Financial Year. 

Year on Year the APY coverage is increasing, the same is evident from the table give below:

Increasing APY coverage on Year on Year basis.

March 31, 2016

March 31, 2017

March 31, 2018

March 31, 2019

Additions from April 1, 2019 to  September 30, 2019

As on date (September 30, 2019)







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