The majority of APY subscribers belong to the lower strata of the society, and are expected to suffer the most during and after the lockdown.
In such scenario, it may be difficult for them to keep contributing to the scheme regularly during such period, Pension Fund Regulatory and Development Authority of India (PFRDA) said in a circular.
The outbreak of COVID-19 pandemic has impacted adversely to all the sections of the society. However, it is known fact that the disadvantaged and poor are most vulnerable to the economic effects of the said disease, it added.
"Therefore, it has been decided by the competent authority to stop auto-debiting savings account of the subscribers for APY contribution till 30th June 2020.
"Also no penal interest will be charged to the APY subscribers if they regularize their APY accounts by depositing such non-deducted APY contributions along with regular APY contributions between 1st July, 20th and 30th Sept, 2020," PFRDA said.
The regulator said that the modalities of payment of the allowed non-deducted APY contributions along with regular contributions will be out in due course.
"Keeping in view the above, all APY-SPs (service providers) are advised to stop auto-debiting the savings account of the subscribers for APY contribution amount with immediate effect till 30th June 20," it added.
APY is a self contributory government guaranteed pension product which mainly caters to the people employed in the unorganised sector in India.
Apart from APY, PFRDA runs the National Pension System (NPS) scheme which is for those employed in the organised sector and caters to people in the central and state government, autonomous bodies, corporate offices as well as salaried or self employed/business individuals.
Last week, for the NPS subscribers, the pension fund agency has allowed for withdrawal to a certain limit from their accruals for Covid-19 related emergencies.
As on March 31, 2020, the total number of subscribers under NPS and APY stood at 3.46 crore. Of this, the number of APY subscribers were 2.11 crore, as per PFRDA data.
The total asset under management under these schemes stood at over Rs 4.17 lakh crore at the end of March 2020. Of this, the APY corpus was of Rs 10,526 crore. KPM KPM BALBAL