In an effort to enrol more subscribers to the Atal Pension Yojana (APY), the Finance Ministry intends to appoint private agents. At present, only banks sell this scheme.

Atal Pension Yojana is one of three social security schemes (the other two are Pradhan Mantri Jeevan Jyoti Bima Yojana or PMJJBY and Pradhan Mantri Suraksha Bima Yojana or PMSBY) that was launched by Prime Minister Narendra Modi on May 9, after an announcement in the Budget. In an interview to BusinessLine , Financial Services Secretary Hasmukh Adhia had said that the life and non-life insurances schemes were running fine, but the third one had not picked up. APY provides a minimum guaranteed monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000 or ₹5,000 to people in the age group of 18-40 years.

“Pension is a push product and the problem is that the channel of distribution is limited. So, we need to increase the channels of distribution. Bank branches may not have time to explain APY. So, we will have to go to non-bank channels, private entrepreneurs, private individuals, who can be given an attractive commission to push the product. Other than banks, we need to appoint private agents,” he said.

At present, the government pays ₹120-150 for every new account and subsequently ₹100 per account every year for persistence as incentive, promotion and development charges on the pattern of the earlier social security scheme, Swavalamban. However, despite this payment structure and 50 per cent contribution by the government for subscribers joining before December 31, the response was not encouraging.

Change in terms Meanwhile, the Finance Ministry on Thursday announced flexibility in the contribution payment to APY by subscribers and also in the terms related to premature withdrawal. Now, a subscriber can contribute on a quarterly and half-yearly basis apart from the current monthly provision. Based on the suggestions received, the government has also provided some relaxation in premature withdrawals.

Now, the account will not be de-activated and closed till the account balance with self-contribution minus the government co-contribution becomes zero due to deduction of account maintenance charges and fees. Also, the penalty on delayed payment has been simplified to Re 1 for contribution of ₹100, or part thereof, for each delayed monthly payment, instead of different slabs earlier.

Similarly, the modified provision permits the subscriber to voluntarily exit with the condition that he will only be refunded the contributions made by him to APY, along with the net actual interest earned on his contributions (after deducting the account maintenance charges).