The Narendra Modi government's key social security scheme, Atal Pension Yojana (APY), will replace the previous government's Swavalamban Yojana NPS Lite, which did not find much acceptance among people.
The scheme will be launched on June 1 and focus on the unorganised sector. All subscribing workers below the age of 40 would be eligible for pension of up to Rs 5,000 per month on attainment of 60 years of age, Department of Financial Services Secretary Hasmukh Adhia told PTI in an interview.
It will be a simple product open to all bank account holders, who are not members of any statutory social security scheme.
"To make the the pension scheme more attractive, it has been decided that the government would co-contribute 50 per cent of a subscriber's contribution or Rs 1,000 per annum, whichever is lower to each eligible subscriber account for a period of of 5 years from 2015-16 to 2019-20," he said.
The existing scheme was not getting adequate response and therefore a need was felt to revamp the scheme and make it more attractive, simple with a guaranteed returns, he added.
Adhia said: "The new pension scheme with better features would replace the existing pension scheme (Swavalamban Yojana NPS Lite) which is targeted at workers of the unorganised sector".
The benefit of government's co-contribution can be availed by those who subscribe to the scheme before December 31, 2015.
Existing subscribers of Swavalamban Scheme would be automatically migrated to Atal Pension Yojana, unless they opt out, Adhia said.
Under the scheme, the subscriber would receive the fixed pension of in the range Rs 1,000-Rs 5,000 per month on attainment of 60 years, depending on contribution which would vary at the age of joining, he said.
The minimum age of joining the scheme is 18 years and maximum age is 40 years, he said. The minimum period of contribution by the subscriber under the scheme would be 20 years.