PFRDA suggests auto-enrollment under Atal Pension Yojana
The PFRDA has made a important proposal regarding the existing central govt. pension scheme APY. It has made the proposal of auto – enrollment of beneficiaries under the pension scheme. PFRDA is the regulatory body of the pension policies laid by the govt. in India. The central govt. to push further number of beneficiaries applying for the APY scheme has gave clear indications to make this a automatic enrollment scheme which means whenever an employer recruits an employee, this APY scheme will be compulsory for the employee.
However, there is also procedure to opt out of the APY pension policy at any stage. And the final decision will still be in the hands of the beneficiaries of APY, whether they want to continue with the pension policy or leave it. Apart from the govt. and semi govt. organizations, the emphasis of auto – enrollment of employees to the APY scheme will be on working members of the private sectors, small scale industries, Aanganwadis, NGOs, Asha, Village Panchayats, etc.
Guidelines of the auto inclusion of APY for employees
Whenever there will be a relation of employer and employee, the APY scheme for the employee will be automatically enabled so that after retirement, the employee’s future will get secured. This will be applicable not only for the formal employments but also for the informal employments. Hence, the employers will have to ensure that all their employees have been registered under the central government’s APY scheme. This policy will result in more pension security to the all the employees. The govt. is also planning to increase the pension coverage of APY so that more participation from the employees can be seen. PFRDA has also indicated that the employers might be penalized and necessary actions will be taken against those which will not adopt the automatic enrollment procedure of APY, for their employees. The govt. will also push for mass awareness regarding this policy.
Some important criteria regarding the policy
All the enrollments to the APY pension policy must be done for all existing as well as new employee recruitments. The minimum age to join APY is 18 years where as the maximum age limit is 40 years. However, the central govt. is planning to raise the upper age limit to 50 years. The PFRDA in its suggestions has clearly indicated that the auto – inclusion in the APY is mandatory for the employers. However, for the employees, it is their personal decision whether to stay in the pension scheme or opt out of it. If the employees are willing to stay in the APY scheme, they will get direct tax benefits out of it. The pension benefits are planned to be raised further with more pension cover after more active participation from the employees and the employers to the APY scheme.