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NPS Lite Swavalamban Scheme Stopped Enrolments In 2015: What Options Do Subscribers Have?

Fresh enrolments in the NPS-Lite Swavalamban scheme, a social security initiative for the unorganized sector, stopped in 2015. Know the available options if you are a subscriber

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Outlook Money
September 13, 2023
NPS Equity Funds

NPS Equity Funds

The NPS-Lite-Swavalamban scheme stopped fresh enrolments in 2015. This social security scheme was launched in 2010 to provide income security in old age for the economically disadvantaged section. However, in 2015, with the launch of the Atal Pension Yojana (APY), which also caters to the unorganised sector, new enrolments in the Swavalamban scheme stopped except for the “Gramin Dak Sevaks” in the postal department.  

Although new enrolments ceased in the NPS Swavalamban scheme, existing subscribers were given the option to either continue or switch to Atal Pension Yojana (APY) with a rider.

Only those aged 18 to 40 can migrate their accounts to APY through their bank or post office savings account. Those over 40 can either continue or exit prematurely. The exit request must be placed via the NPS-Lite point-of-presence (POP) or the aggregator.  

Let’s understand more about these two schemes and the options.   

NPS-Lite-Swavalamban  

The scheme has ultra-low administration and transaction costs, ideal for small savers.  

Under the scheme, the government contributes Rs 1000 annually for five years to every Swavalamban account opened between 2010 and 2013, subject to the condition that the subscriber contributes Rs 1,000 to Rs 12,000 yearly.   

A part of the contribution is invested in the equity market for higher returns. Fifty-five per cent of the funds are invested in government securities and up to 40 per cent in corporate bonds.  

Atal Pension Yojana (APY)   

APY also targets the unorganised sector. Launched in 2015, the scheme completed eight years in May 2023, with a subscriber base of 52.5 million. Unlike NPS, APY offers guaranteed pensions, which can be between Rs 1,000 and Rs 5000 after reaching 60.  

Those 18 to 40 years old can join the scheme. The same age rule applies to those who want to switch from the Swavalamban scheme to APY. They can open an APY account in the post office or bank and can contribute on a monthly, quarterly, or half-yearly basis.

They need to have a savings account in a bank or post office before opening the APY account. From October 01, 2022, a person who is or has been an income-tax payer under the Income Tax Act, as of the date of account application is not eligible to open a new APY account.

In APY, if the subscriber dies, the spouse gets the pension, and after her spouse’s death, the nominee is entitles to get the pension amount accumulated till age 60 of the subscriber. One can check the APY and NPS-Lite details and the transaction statement here https://npslite-nsdl.com/CRAlite/EPranAPYOnloadAction.do 

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