Pension fund regulator PFRDA has asked subscribers of NPS Swavalamban scheme to join the Atal pension yojana (APY), which offers guaranteed minimum monthly pension of Rs 1,000-5,000 to the subscriber after 60 years.
NPS Swabhalamban scheme has significant amount of subscribers and if all them opt for newly launched Atal pension yojana, it will help PFRDA reach the 2-crore subscriber target for this year. NPS Lite and Swavalamban schemes combined have about 45 lakh subscribers with assets under management of over Rs 1,700 crore.
Both Swavalamban and APY schemes are quite similar in certain aspects. The NPS-Swavalamban model is designed to ensure ultra-low administrative and transactional costs, so as to make small investments viable.
Like the recently-launched Atal pension yojana, in Swavalamban also government contributes Rs 1000 per year to each account for five years. A Swavalamban account opened in the period 2013-2014 to 2016-2017 for example get the Swavalamban benefit up to 2016-17.
In the APY, the government would co-contribute 50 per cent of the total contribution or Rs 1000 per annum, whichever is lower, to eligible subscribers. Government co-contribution is available for five years, i.e. from 2015-16 to 2019-20 for the subscribers who join the scheme during the period from 1st June, 2015 to 31st December, 2015 and who are not covered by any statutory social security schemes and are not income tax payers.
“All subscribers of Swavalamban scheme between 18-40 years of age can opt to migrate to Atal Pension Yojana through their bank account,” PFRDA said in a communique. “(Such) subscribers between 18 to 40 years of age may approach their bank branches to submit the APY application along with PRAN (permanent retirement account number) card for migration to Atal pension yojana.
The subscribers’ PRAN issued under Swavalamban scheme would continue to be retained in APY and new PRAN will not be issued,” the pension fund regulator said. Swavalamban scheme subscribers without bank account will have to open a bank account and simultaneously submit the request for migration from Swavalamban to the Atal pension yojana to the bank, it added.