You May soon be Auto Enrolled in Atal Pension Yojana

The Pension Fund Regulatory and Development Authority (PFRDA) is considering auto enrolment of all employees in the Atal Pension Yojana (APY) which was only targeted at the unorganised sector workers till now. This would mean that even workers in private sector, government and semi-government organisations may be auto enroled in the scheme. This proposed auto-enrolment in APY would be in addition to any existing subscription to a pension scheme (such as EPS or NPS) that an employee may have.

There's a looming retirement crisis in the country with a large percentage of the workforce still without adequate retirement savings or a plan in place. Both the Employees' Provident Fund (EPF) and the Employee Pension Scheme (EPS) may not be sufficient to meet the post-retirement needs of many employees.

Atal Pension Yojana (APY) was launched in June 2015 to meet the pension needs of the unorganised sector labour force. As on August 31, 2016, the total number of subscribers registered under APY were about 30 lakh.

To increase the pension coverage in the country, there could be a 'soft compulsion' for employees to join APY. For an employee, joining the APY scheme may soon become mandatory. PFRDA is considering introducing "soft compulsion", generally known as automatic enrolment, to increase the pension coverage. A concept note has, in fact, already been introduced.

And for this, PFRDA has identified the existing APY and finds it ideally suited, especially for the informal sector. In its view, auto-enrolment in APY could be considered for this purpose.

APY currently is open to all Indian citizens in the 18-40 age group. There has been a proposal to extend it to 50 years. Under APY, there is a guaranteed minimum monthly pension for the subscribers ranging between Rs 1,000 and Rs 5,000.