PFRDA conducts valuation to weigh up doubling of pension limit to 10K

Pension fund regulator PFRDA is doing actuarial valuation of its portfolio to gauge the feasibility of raising the pension limit to up to Rs 10,000 per month under the Atal Pension Yojana (APY), a top official said.

A proposal was made in the past to raise the pension under APY to double the limit from the existing slab of up to Rs 5,000.

"Since it is a guaranteed pension scheme, there is an obligation to honour the guarantee on the government. So, for that, on what kind of obligation would be required on the government (part), 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," PFRDA Chairman Hemant G Contractor told PTI.

The process is expected to be complete by December.

Contractor said once clear on the idea, the government may like to increase the scope of the scheme.

On asked how soon the scheme, if feasible, can be a reality, he said as the actuarial examination will be over by December, anything concrete on the proposal can be seen by February or March next year.

In June this year, the Finance Ministry had said that there was a need to increase the pension amount under APY and a proposal sent by the Pension Fund Regulatory and Development Authority of India (PFRDA) to raise the amount was under examination of the government.

"As of now, we have five slabs of pension, from Rs 1,000 to 5,000 per month. There have been a lot of feedback from the market asking for higher pension amounts because many people feel that Rs 5,000 at the age of 60 years, 20-30 years from now, will not be sufficient," Contractor had said in June.

The PFRDA has added almost 28 lakh new subscribers under APY in the first eight months of the current fiscal so far and hopes to close the current fiscal ending March 2019 with 1.50 crore accounts.