The Atal Pension Yojana (APY) is a government-backed social security scheme designed to provide old-age income security, primarily targeting workers in the unorganised sector who lack formal retirement benefits. It is a voluntary, periodic contribution-based pension system administered by the Pension Fund Regulatory and Development Authority (PFRDA) under the overall architecture of the National Pension System (NPS).
The APY was launched by Prime Minister Narendra Modi on May 9, 2015, and became operational from June 1, 2015, to address the challenges of longevity risks and lack of retirement security among India's vast unorganised workforce. It replaced the earlier government-backed pension scheme, the Swavalamban Yojana.
The scheme is open to all Indian citizens between the ages of 18 and 40 years who have a savings bank or post office account, requiring a minimum contribution period of 20 years. Subscribers must choose a fixed monthly pension amount of either ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000, which they will receive upon attaining 60 years of age. The monthly contribution varies based on the entry age and the chosen pension amount, with the amount being auto-debited from the subscriber's linked account. The Central Government guarantees the minimum pension amount, and if the accumulated corpus is insufficient, the government covers the shortfall.
A significant recent change, effective from October 1, 2022, is that any citizen who is or has been an income tax payer under the Income Tax Act, 1961, is no longer eligible to join the APY. If a subscriber dies before age 60, the spouse can continue the scheme or receive the accumulated corpus; if the subscriber dies after age 60, the spouse receives the same guaranteed pension for life, and the corpus is returned to the nominee after the death of both. The Union Cabinet approved the continuation of the APY until the Financial Year 2030-31.