Lok Sabha Question No. 4138 (UNSTARRED), answered on 2018-08-10
Subject: Flexible Pension Contribution
Ministry: FINANCE
Asked by: RAJESHBHAI NARANBHAI CHUDASAMA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

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## LOK SABHA UN STARRED QUESTION NO. 4138 TO BE ANSWERED ON AUGUST 10, 2018/SHRAVANA 19, 1940 (SAKA) FLEXIBLE PENSION CONTRIBUTION

## 4138. Shri Rajeshbhai Chudasama

Will the Minister of FINANCE be pleased to state

- (a) whether the Government proposes for flexible pension contribution for the informal workers in the country and if so, the details of proposal therein;
- (b) if  not,  the  proposal  of  Government  for  the  people  with  irregular  incomes  and  particularly  the  women  of  the country who have no regular incomes; and
- (c) the details of the report of the Pension Fund Regulatory and Development Authority (PFRDA) and Credit Rating Information Services of India Limited (CRISIL) on the pension proposal towards elderly women empowerment?

## ANSWER

## The Minister of State in the Ministry of Finance

(Shri Shiv Pratap Shukla)

(a) &( b) The Atal Pension Yojana (APY) was launched in May, 2015 and is operational from 1st June, 2015. The APY is primarily focussed on all citizens in the unorganised sector, who are not covered by any pension scheme. All citizens of the country in the eligible category may join the scheme. As on 06.08.2018, the total number of subscribers under APY is 1,09,66,981, out of which, 43,87,993 subscribers are women. The salient features of the Atal Pension Yojana are as under:

-  Indian Citizens between the age group of 18 to 40 years eligible to join APY through their savings bank account or post office savings bank account.
-  APY is based on defined benefit for providing guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 at the age of 60 years based on pension amount chosen.
-  The Central Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who have joined the APY before 31st March, 2016, and who are not members of any statutory social security scheme and who are not income tax payers.
-  In case of premature death of Subscriber (death before 60 years of age), spouse of the subscriber has been given an option to continue contributing to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age 60 years.
-  In case of death of both subscriber and spouse, the entire pension corpus would be returned to the nominee.
-  If  the  accumulated  corpus  based  on  contributions  earns  a  lower  than  estimated  return  on  investment  and  is inadequate  to  provide  the  minimum  guaranteed  pension,  the  Central  Government  would  fund  such  inadequacy. Alternatively, if the actual returns during the accumulation phase  are higher than the assumed returns for minimum guaranteed pension, such excess will be passed on to the  subscriber.

With a view to provide flexibility to the subscribers of APY with seasonal or irregular income, besides the monthly mode of payment, quarterly and half yearly mode of payment of contributions have been provided in the Scheme. Further in case of default in payment of contribution, a subscriber may regularize the account by paying the overdue amount along with a minimal charge to obtain the guaranteed pension.

(c)  The Pension Fund Regulatory and Development Authority (PFRDA) has informed that the report of PFRDA and CRISIL on 'Financial security for India's elderly' has, inter-alia, mentioned designing of a pension policy exclusively for women where contributions could be from the women's families. Some tax relief to the savings held in the form of pension has also been mentioned.

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