Now Atal Pension Yojana (APY) subscribers have the flexibility to increase or decrease the pension amount anytime during the year with effect from July 1, 2020. Earlier this facility was available only during the month of April every year.
However, this change in the pension amount can be done only once in a year. The PFRDA, which regulates pension funds, has asked all banks to process pension amount change requests throughout the year.
However, this change in the pension amount can be done only once in a year. The PFRDA, which regulates pension funds, has asked all banks to process pension amount change requests throughout the year.
The latest change in APY rule gives its subscribers the flexibility to either increase or decrease the targeted pension amount anytime during the year depending on the change in his/her income.
Under the APY scheme, a subscriber has the option to receive a minimum guaranteed pension of Rs.1000 to Rs.5000 per month after attaining the age of 60 years. Depending on the pension amount the monthly contribution is calculated.
How it works
Suppose you have opted for the APY scheme when you were 30 to receive Rs 1,000 monthly pension starting from the age of 60. Now you are 34 years old and want to increase the pension amount to Rs 4,000 per month when you turn 60 as your income has increased. This is possible in case of APY. Your revised contribution amount is decided based on the pension amount. Similarly, a reduction in pension amount is also allowed in case you feel that you are not able to continue the required monthly contribution.
With the latest mandate from PFRDA, you can now make a change in pension amount once in a financial year in any month.
In case of an upgrade or downgrade, you need to intimate your bank by filling up a form and giving authorisation to the bank to deduct the additional required contribution from your bank account. In case of a reduction in pension amount, the differential amount would be refunded to the subscriber through direct credit to his bank account. All the contributions into the APY are made either monthly, quarterly or half-yearly through the auto-debit facility from the savings bank account of the subscriber.
In APY, spouse of the subscriber continues to get the same amount of pension after the death of the subscriber. Once the spouse dies, the accumulated pension wealth till the age of 60 years of the subscriber would be returned to the nominee.
