APY Subscribers can make half-yearly, quarterly payments

To increase the subscription of the Atal Pension Yojana (APY) among informal sector workers and make the scheme more viable, the government has modified the flagship programme to give subscribers an option to make contributions on a monthly, quarterly or half-yearly basis, instead of only on a monthly basis earlier.

Also, the provision related to the discontinuation of payment of contribution has been substantially modified in favour of the subscriber, the finance ministry said in a statement on Thursday.

“The account will not be deactivated and closed till the account balance with self-contributions, minus the government co-contributions, becomes zero due to the deduction of account maintenance charges and fees,” it said.
Besides, the penalty on delayed payment has been simplified to just R1 per month for contribution of Rs 100, or part thereof, for each delayed monthly payment instead of different slabs given earlier.

Similarly, a premature exit from the scheme before 60 years of age was not permitted earlier except in exceptional circumstances, — in the event of the death of the beneficiary or terminal disease. Now the modified provision permits the subscriber to voluntarily exit with the condition that he shall only be refunded the contributions made by him to APY, along with the net actual interest earned on his contributions (after deducting the account maintenance charges).

The other condition enabling voluntary exit is that the government co-contribution, and the interest earned on the government co-contribution, shall not be returned to such subscribers.

The APY was launched by Prime Minister Narendra Modi on May 9.

http://www.financialexpress.com/article/industry/companies/apy-subscribers-can-make-half-yearly-quarterly-payments/122968/

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Pensions regulator PFRDA asks banks to process APY contributions quickly

Pensions regulator PFRDA has flayed banks for not adhering to timelines for processing contributions to recently launched Atal pension yojana (APY), which is among the key social security schemes launched by prime minister Narendra Modi in May.

The regulator has a daunting task of getting two crore subscribers for Atal pension yojana by this year end and as of now it has about five lakh subscribers enrolled. And tardy processing of contributions isn’t helping its cause much either. Pension Fund Regulatory and Development Authority (PFRDA) administers the scheme and the institutional architecture of NPS is being utilised to enroll subscribers under Atal pension yojana.

In June 2015, there were several instances where subscriber contributions were delayed. PFRDA has warned that any overdue interest or subscriber compensation due to delay in processing may have to be borne by the concerned bank.

Under the schemes’ rules, banks are required to collect additional amount for delayed payments, such amount will vary from minimum Rs. 1 per month to Rs 10 per month.

Banks get an incentive for mobilising new accounts under Atal pension yojana and for promotion and development of the scheme as well. Under this particular scheme, a minimum pension amount is guaranteed by the government on the premise that certain parametres are met as per the guidelines. This is why timely remittance of funds and investment are crucial.

“It was observed that during June 2015, there were several instances where these timelines were not adhered by the banks. It may be noted that the delayed upload of contribution had also an adverse impact by way of overdue interest or increased monthly contribution for the subscribers due to change of age during the period of delay,” PFRDA said.

For example, a guaranteed Rs 5,000 monthly pension for a 35-year-old will require monthly investment of Rs 902. However, if the subscriber turns 36 during the period of delay, he/she will have to pay Rs 990 per month. PFRDA directed all the banks to adopt measures that will "streamline the process of contribution upload as per timelines."

Banks are required to generate the Permanent Retirement Account Number (PRAN) immediately after submission of applications and the subscribers are to be provided with acknowledgment slip indicating the pension amount opted and PRAN.

PFRDA directed banks to upload files containing subscriber’s data and remittance of funds collected on the second day of PRAN generation. By the fourth day, contributions should be matched and booked and units need to be allotted.

http://www.mydigitalfc.com/news/pfrda-asks-banks-process-apy-contributions-quickly-554

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