India enters into an agreement with Canada to better pension benefits for people contributions, who have lived and worked in both countries. This agreement will come into effect from August 1, 2015.
This move will help coordinate the operation of Canada’s Old Age Security and Canada Pension Plan programs with certain comparable pension programs of India. Further, this agreement will also facilitate increased commercial and economic co-operation between the two countries.
How will this pension deal benefit both India and China?
See: India and China make legal provisions for old-age pensions
Making this recent announcement on agreement between India and China, The Honourable Pierre Poilievre, Minister of Employment and Social Development, Canada said: “Our Government is committed to ensuring the retirement security of Canadians whether they have lived or worked in Canada or abroad. This agreement demonstrates the continued spirit of partnership and collaboration between our two countries and recognizes the valuable contribution of Indo-Canadians in making Canada stronger.”
The thrust on this agreement to be brought into force was initiated by Narendra Modi, Prime Minister of India, during his recent official visit to Canada in April 2015.
In India, the government is extremely concerned about the old age income security of the working poor and is focused on encouraging and enabling them to join the National Pension System (NPS). Hence in 2015-16, the Finance Minister announced a new initiative called Atal Pension Yojana (APY).
The APY will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA) and who are not members of any statutory social security scheme.
Under the APY, the subscribers would receive the fixed pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY.
The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more. The benefit of fixed pension would be guaranteed by the Government. Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme.
All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges. This social security agreement between both countries India and Canada will provide for better social security of the retired workforce, who has made significant contributions to both countries during their career span.
Also read: Pension Basics for HR Professionals
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