The government is planning to allow subscribers of the Atal Pension Yojana (APY) for a partial withdrawal from employees’ contribution as the current lockdown to battle Covid-19 has crippled the monetary power of workers in the unorganised sector. The government circular would be out in a day or two for adding Covid-19 as one of the conditions for partial withdrawal from pension fund by APY susbscribers, Pension Fund Regulatory and Development Authority of India (PFRDA) Chairman Supratim Bandyopadhyay told PTI.
“In our regulation, we already have an enabling provision of partial withdrawal for specific purposes such as life threatening kind of emergency, or some kind of critical illness and the likes. There we have done a classification that it should include Covid-19 also,” Bandyopadhyay said. He said PFRDA has requested the finance ministry for enabling this provision.
“May be today or tomorrow this circular will be out,” said the chairman of the pension fund regulatory body.
He said as in case of other contingencies of partial withdrawal, the limit of withdrawal has been kept same at 25 per cent of the fund accrued of employee’s contribution of the pension amount.
As on March 31, 2019, the number of APY subscribers was 2.11 crore. The total number of subscribers under APY and NPS stood at 3.47 crore. PFRDA runs two flagship pension schemes — APY and NPS (National Pension System).
While the NPS caters to the central and state governments alongside autonomous bodies as well as individual taxpayers, APY is largely targeted for workers in the unorganised sector.
India’s majority workforce is employed with this sector which is facing hardship due to the lockdown.
Bandyopadhyay said there is unlikely to be any disruption in terms of PF contribution from NPS subscribers. With regard to large and medium corporates also PFRDA is not seeing any kind of disruption, however, there may be some challenges with respect to small corporates.
But, he also clarified that since the PFRDA schemes are flexible in nature as there are no due dates to make contributions, one can add funds to pension accounts at any time during a fiscal year. Individuals, salaried or self employed, can also subscribe to the NPS scheme wherein investment of up to Rs 50,000 a year is allowed tax free.