Atal Pension Yojana: How to Increase Your Monthly Pension Contribution from Rs. 2,000 to Rs. 5,000

Yes, You Can Upgrade: Atal Pension Yojana (APY) subscribers can increase their monthly pension contribution from Rs. 2,000 to Rs. 5,000, or to any other available pension slab (Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, Rs. 5,000). This flexibility is designed to help individuals adjust their retirement savings as their financial situation changes over time.

 

When and How Often: The scheme permits you to switch your selected pension amount once a year, in the accumulation stage (prior to reaching age 60). The time during which you can make this change is usually in April, but you may put the process in motion at any time, and it will be acted on within the specified timeframe.

 

How to Upgrade Your Contribution:

 

Online Process: Go to the official NPS (National Pension System) website. Log in using your PRAN (Permanent Retirement Account Number), choose the option to increase your pension amount, and request the same. You will have to submit the APY-SP form online, which you might have to fill.

 

Offline Process: Download the "Atal Pension Yojana Upgrade or Downgrade Pension Amount" form from the official NPS or APY website. Fill in your details, check the relevant boxes, and submit the form to your bank branch where your APY account is maintained. Attach the necessary documents and obtain the stamped acknowledgement for your reference.

 

Charges and Fees: Uplifting or reducing your pension sum is charged a nominal cost—usually Rs. 25 or Rs. 50, depending on the bank and whether you're making an increase or a decrease. The cost is divided between the bank and the Central Recordkeeping Agency (CRA).

 

Contribution Adjustment: If you upgrade from Rs. 2,000 to Rs. 5,000, your regular contribution will be higher according to your current age and the new target pension sum. The sooner you join or opt for higher subscription, the lower your monthly payment will be, as the longer investment period. Suppose you are 30 years old. Your monthly payment for a pension of Rs. 5,000 will be more than that for a pension of Rs. 2,000, and you will have to pay the difference amount at 8% interest per annum for the higher portion.

 

Refunds on Downgrade: In case you downgrade your pension amount, your excess contribution collected will be refunded to your associated bank account along with returns applicable.

 

Auto-Debit and Notifications: The contributions are made through auto-debit from your associated savings account. You will be notified through SMS and an annual physical statement regarding your account status, contributions, and balance.

 

No Closure of Account for Non-Payment: If you default on a contribution due to low balance, your account will not be closed. You can bring your account to order at any time by paying the default and interest due. Nonetheless, maintenance charges will still be deducted.

 

Investment and Fund Management: Your savings are invested according to PFRDA guidelines and managed by appointed pension fund managers such as SBI Pension Fund, LIC Pension Fund, and UTI Retirement Solutions.

 

Eligibility and Commitment: APY is available for all Indian citizens between 18 and 40 years of age, mainly for employees in the unorganized sector. The scheme involves a commitment for the long term—20 years of contributions if you are 40 years old when you join.

 

Step-by-Step Summary to Raise Your APY Pension Value:

Why Upgrade?

Upgrading your pension ensures higher financial security post-retirement and allows you to adjust your retirement planning as your income grows. The government’s flexibility in APY empowers you to make these changes conveniently.

 

Sources: Economic Times, Paisabazaar, Ministry of Finance, GoDigit