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PFRDA Suggests Govt To Increase Guaranteed Pension In Atal Pension Yojana
Administered by PFRDA, APY seeks to institute a broad social security scheme for unorganised sector labourers.
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The Pension Fund Regulatory and Development Authority (PFRDA) has urged the government to raise the guaranteed pension amount under the Atal Pension Yojana (APY). The current sum may not entice potential subscribers to join the scheme.
PFRDA Chairman, Deepak Mohanty, stated, "We have requested the government to raise the limit. In the case of guaranteed pensions, the government has to make budgetary proposals. If the pension amount is increased, the funding must also be increased. The promise has to be backed by actual money. So, we have sent a proposal to increase the limit, as the current amount may not retain the same value after 20 years. That’s the feedback we have received.”
Administered by PFRDA, APY is a contributory scheme aimed at establishing a universal social security system for workers in the unorganised sector.
Currently, subscribers between 18 years to 40 years contribute and receive a fixed pension amount ranging from Rs 1,000 to Rs 5,000 after turning 60. As of 16 September, APY has 50 million subscribers and Rs 30,694 crore in assets under management (AUM).
Mohanty highlighted that besides APY, the NPS is also an appealing option for those in the unorganised sector as they can make annual payments, avoiding the need for monthly contributions. “Many households in rural areas and the unorganised sector have irregular income throughout the year. For them, NPS, with its flexible contributory regime, is more attractive,” Mohanty added.
Furthermore, Mohanty confirmed that the pension fund regulator will subscribe to the 50-year sovereign bond announced by the finance ministry on Tuesday.
“Since PFRDA can invest in government securities, we will be subscribing to the 50-year sovereign bonds. Also, we will be investing in sovereign green bonds as well. Last year, we invested close to Rs 312 crore in them,” he added.
Mohanty also confirmed that the Systematic Lump Sum Withdrawal (SLW) facility has been operationalised, allowing NPS subscribers to systematically withdraw their NPS corpus after retirement at monthly, quarterly, half-yearly, and annual intervals.
“The SLW is expected to be implemented in the coming month of October,” he added. Mohanty expressed optimism that NPS assets will reach Rs 12 trillion by the end of March 2024. As of September 16, NPS’ AUM (including APY) stood at Rs 10.22 trillion, up 27 per cent year-on-year. “PFRDA is taking steps to bring more corporations and individual citizens on board. This year we expect 1.3 million new subscribers from both corporates and all citizen categories. Last year, we added 1 million new subscribers,” he said.