India modifies pension plan to include NRI workers

This post was originally published on 17 February 2017.

After discarding the Mahatma Gandhi Pravasi Suraksha Yojana, India Government has modified another pension plan to include NRI workers.

The Atal Pension Yojana, which currently caters to workers in the unorganised sector in India, is now open to low-income NRI workers.

Many contours of the two pension policies are similar, including the contribution made by the government of India.

The existing pension scheme run by the country’s pension regulator is now set to fill the void, Khaleej Times reported citing officials.

How the scheme works

  • The Atal scheme is a pure pension policy without life insurance.
  • Subscribers would receive a fixed minimum pension of Rs 1,000 per month, Rs 2,000 per month, Rs 3,000 per month, Rs 4,000 per month or Rs 5,000 per month, at the age of 60 years, depending on their contributions.
  • The minimum age of joining the scheme is 18 years and maximum age is 40 years.
  • The Government of India would also co-contribute 50 per cent of the total contribution, or Rs 1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of five years.

Managed by the pension fund regulator, it guarantees monthly pension payments after 60 years of age.

The policy has drawn 4.4 million members since its launch in June 2015. It is linked to the individual’s bank account and voluntary in nature, with provisions for monthly, quarterly and annual premium payments.

“This can serve as the right alternative for all workers engaged in the unorganised sector as well as low-income non-resident Indian workers,” a senior official at the Pension Fund Regulatory and Development Authority (PFRDA) told the daily.

The regulator is in touch with the Ministry of External Affairs for effectively promoting and implementing the scheme through its missions abroad, the report added.

Contributions from existing Mahatma Gandhi scheme subscribers to the Atal scheme will not be affected and necessary arrangements will be in place to ensure migration, a senior official added.

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