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Government simplifies contribution and exit rules for Atal Pension Yojana

Economic Times:  August, 2015

New Delhi: The Centre on Thursday eased norms for its flagship Atal Pension Yojana (APY) to attract a bigger subscriber base.

Under the changes, subscribers can now contribute on monthly, quarterly, or half yearly basis instead of monthly basis earlier.

The modified provision allows subscribers to voluntarily exit with the condition that they shall only be refunded the contributions made to APY, along with the net actual interest earned on contributions (after deducting the account maintenance charges) and government co-contribution, and the interest earned on it, shall not be returned to such subscribers.

Also, the penalty on delayed payment has been simplified to Re 1 per month for contribution of Rs 100, or part thereof, for each delayed monthly payment instead of different slabs given earlier.

Similarly, premature exit from the scheme before sixty years of age was not permitted earlier except in exceptional circumstances, which is in the event of the death of the beneficiary or terminal disease.

Launched by PM Narendra Modi in May, APY provides a minimum guaranteed pension of Rs 1000 per month to Rs 5000 per month in the age group of 18-40 years.

"Certain suggestions have been received, including from the state governments, regarding providing certain relaxations for informal sector workers, having intermittent incomes, from the provision of mandatory monthly contributions under the scheme of APY and also removing the penal provisions for non-contribution under APY to make the Scheme more viable," the finance ministry said in a statement.

As per the modifications, "Discontinuation of payment of contribution provision has been substantially modified in favour of the subscriber. The account will not be deactivated and closed till the account balance with self-contributions minus the government co-contributions becomes zero due to deduction of account maintenance charges and fees."