APY Vs PM-SYM: Which Pension Scheme Offers Higher Monthly Pension After 60?

The Atal Pension Yojana (APY) and Pradhan Mantri Shram Yogi Maandhan ( PM-SYM ) both require long-term contributions. Their eligibility rules, contribution structures and pension benefits, however, are different.

For those comparing a government pension scheme for retirement planning , the pension amount alone should not be the deciding factor. Age, employment status and income eligibility can play an equally important role.

APY offers pension options up to Rs 5,000

The Atal Pension Yojana is available to eligible individuals between the ages of 18 and 40. Under the scheme, subscribers can choose a fixed monthly pension ranging from Rs 1,000 to Rs 5,000 after reaching the age of 60.

The monthly contribution depends on two key factors: the subscriber's age at entry and the pension amount selected. Joining at a younger age generally means a lower monthly contribution for the same pension benefit.

There is also an important eligibility restriction. Since October 1, 2022, individuals who are taxpayers or have previously paid income tax cannot open a new APY account.

The scheme also provides protection for the family under its applicable rules. If the subscriber dies, the spouse can continue receiving the same pension, while the accumulated pension wealth is payable to the nominee after the death of both spouses.

What does it take to receive Rs 5,000 under APY?

An individual joining the scheme at the age of 18 and selecting the maximum APY pension of Rs 5,000 would need to contribute around Rs 210 every month.

That works out to Rs 2,520 a year. Over 42 years, the total contribution would be roughly Rs 1.06 lakh, based on the stated contribution structure.

The calculation changes significantly for those who join later. A 30-year-old opting for a Rs 5,000 monthly pension would need to contribute around Rs 577 per month, or Rs 6,924 annually.

Over the period from age 30 to 60, the total contribution would be approximately Rs 2.08 lakh. This highlights why the age at which a person begins retirement planning can have a substantial effect on the amount they need to contribute.

PM-SYM is aimed at unorganised sector workers

Pradhan Mantri Shram Yogi Maandhan has been designed for eligible workers in the unorganised sector. The scheme is open to individuals aged between 18 and 40 whose monthly income is Rs 15,000 or less, subject to the prescribed conditions.

Applicants should not be covered under the Employees' Provident Fund Organisation, Employees' State Insurance Corporation or National Pension System. They must also not be income taxpayers.

Under PM-SYM, the subscriber is entitled to a fixed monthly pension of Rs 3,000 after attaining the age of 60. A key feature is that the government contributes an amount equal to the subscriber's contribution.

For example, a person joining at the age of 30 would contribute Rs 105 per month. This equals Rs 1,260 annually, while the government makes a matching contribution.

Over 30 years, the subscriber's own contribution would amount to around Rs 37,800. The pension benefit at age 60 would be Rs 3,000 per month, subject to the scheme's conditions.

Which pension scheme should you choose?

For eligible individuals seeking a higher fixed monthly pension, APY provides an option of up to Rs 5,000 after the age of 60. It may particularly appeal to those who can start contributing at a younger age and meet the eligibility requirements.

PM-SYM, on the other hand, is specifically targeted at eligible unorganised sector workers with a monthly income of Rs 15,000 or less. The matching government contribution is an important feature for subscribers who qualify under the scheme.

Both options require a long-term commitment, making it important to check eligibility before enrolling. The right choice will depend on the subscriber's age, income, employment status and the level of monthly pension they hope to receive during retirement.

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