Pension fund regulator, Pension Fund Regulatory and Development Authority,, (PFRDA) is carrying out an actuarial valuation of its portfolio to gauge the feasibility of raising the pension limit to up to INR10,000 ($140) per month under the Atal Pension Yojana (APY), a top official has said.
APY is a government-backed pension scheme in India targeted at the unorganised sector. The current limit is INR5,000.
PFRDA chairman Hemant G Contractor told Press Trust of India, "Since it is a guaranteed pension scheme, there is an obligation to honour the guarantee by the government. So, for that—what kind of obligation would be required of the government—we are doing an actuarial valuation of the portfolio that will show us whether the government really needs to do something to honour the guarantee or whether the guarantee will really not be required."
The process is expected to be completed by December. Any change could be seen by February or March next year, he said.
There has been a lot of feedback from the market asking for higher pension amounts because many people feel that INR5,000 at the age of 60 years, 20-30 years from now, will not be sufficient to fund retirement, Mr Contractor had previously said.
APY, launched in 2015 for workers in the unorganised sector like personal maids, drivers, gardeners etc, is open to those aged between 18 and 40 years of age.
APY is a periodic contribution based pension plan which pays out a fixed monthly pension of INR1,000 to INR5,000 (in INR1,000 increments). The monthly contribution depends on the fixed amount of monthly pension the subscriber wishes to receive and the age when he or she starts making contributions .